Brazil's largest power group Eletrobras could team up with global oil supermajor Shell to build and run offshore wind farms, the company said today (Thursday).

Eletrobras told investors in an update that it “signed a technical cooperation agreement with Shell aimed at exchanging information for a possible co-investment in the development and operation of offshore wind energy projects in Brazil”.

Shell this year emerged as one of the biggest potential players in a Brazilian offshore wind sector that has been held back by lack of regulatory clarity but is now very much tipped for lift off as key enabling legislation moves forward and green hydrogen production becomes a potential new market for power produced.

The UK-based supermajor said in March that it will start environmental studies for a potential 17GW of offshore wind in South America’s largest economy, where environmental protection agency Ibama now has more than 170GW of proposals on its books.

The two partners will now seek to “identify areas for possible partnership”, said state-controlled Eletrobras, Brazil's largest electricity producer which said the move is part of its strategy to diversify its hydropower-dominated generation mix.

“Eletrobras believes that offshore wind energy has proven to be, all over the world, an expanding energy source for the generation of renewable energy, driven by the support of energy policies, in response to environmental concerns, and by technological advances.”

Other big names already pursuing offshore wind in Brazil include Shell’s fellow oil & gas groups Equinor and TotalEnergies, along with local hydrocarbons giant Petrobras and power sector players Iberdrola, Corio and Ocean Winds.

Brazil has long been seen as one of the world’s most promising new markets for offshore wind.

The country’s energy planning agency EPE as part of its Offshore Wind Roadmap in 2020 had estimated the country’s offshore wind potential as high as 700GW off its 8,000km coastline.

According to a World Bank estimate, the country has a theoretical potential of 1,200GW for wind at sea, of which 480GW is seen as bottom-fixed in depths of up to 50 metres and another 748GW as floating plant in deeper waters.