Shell eyes Brazil for renewable energy opportunities

Shell received authorization from Brazil’s power regulator Aneel to develop three solar power projects in Minas Gerais state.

With nearly 457MW Minas Gerais has Brazil's largest installed solar power capacity, due to high solar incidence and local government incentives.

The company is studying solar power investments in the country as part of its goal to reach net zero emissions by 2050.

“Brazil is a priority in terms of renewable energy investments in the Latin American market. The country has a privileged energy matrix, with geographic and climate conditions that favor different renewable projects,” Shell’s press office told BNamericas.

The company has a team in Brazil since 2018 that focuses on opportunities in this market. To reach the zero emissions target, Shell plans global renewable energy investments of US$1-2bn and pursues biofuels projects, emissions capture and increasing energy efficiency.

Shell participates in Brazil’s biofuels business through Raízen, a JV with Cosan. But the main focus is on oil and gas exploration and production. Shell has over 32 contracts, 21 of which as operator, in the Campos, Santos, Barreirinhas, Espírito Santo and Potiguar basins. March entitlement production in those concessions amounted to 353,187b/d of oil and 14Mm3/d (million cubic meters per day) of natural gas.

According to consultancy firm Wood Mackenzie, the low oil prices amid reduced consumption due to the coronavirus pandemic are unlikely to change oil firms' commitments to increase investments in renewables.

“Despite immediate cash flow constraints, Shell and its peers will emerge from this period more determined to make the shift from Big Oil to Big Energy,” the consultancy’s vice president for corporate analysis, Luke Parker, recently said in a statement.

Earlier this week, French oil major Total also announced plans to become net zero in carbon emissions by 2050. The firm already has renewable investments in Brazil through its Total Eren initiative, which has solar and wind power plants in the country.

Norway’s Equinor has been operating the Apodi solar plant in Ceará state in northeast Brazil since December 2018 and has expressed interest in more electricity projects. And last year BP formed a joint venture with Bunge for sugar and bioenergy production.