Brazil
News

Transmission a potential bottleneck for renewables in northeast Brazil

Bnamericas Published: Friday, September 13, 2019

Power transmission infrastructure could be one of the main bottlenecks for the development of renewable generation projects in Brazil’s northeast in coming years.
 
Brazil has a schedule for transmission line tenders up until 2021 but could face greater challenges during the next decade as it expects a big boost in renewable generation after 2025. That is when domestic consumers will be allowed to migrate from the captive market, where they are supplied by distributors, to the free market, where they can choose electricity provider. Currently, only big consumers are allowed to migrate.
 
“The market will undergo big changes in consumption patterns. There is a worldwide trend for higher representation of renewables and consequently this will bring a need for transmission expansion,” Marcelo Gonçalves, partner at consultancy firm KPMG, told BNamericas.
 
According to Gonçalves, another subject investors need to be wary of when developing renewable generation in the northeast is the environmental licensing process, which often demands environmental and social compensation.
 
There is also an expectation that new technologies will have a big impact on the development of such projects, helping to solve some of the bottlenecks. One of the main innovations expected in the short-term is energy storage batteries, which should gain ground after the country adopts an hourly PLS [index of short-term electricity prices]. Other technological solutions such as more accurate wind generation forecasts should also help with the financing of projects, as Fitch said in a recent report.    
 
The northeast region is crucial for the development of the wind and solar power markets in the country due to its high solar irradiation and good wind speeds and steadiness. The region hosts over 80% of the country’s total wind generation capacity, and has the three top producing states: Rio Grande do Norte, Bahia and Ceará.
 
Although the states with the highest solar power capacity are in the southeast, the northeast is also important. An example is Fortaleza city in Ceará state with 11.7MW installed capacity, putting it among the top four municipalities for solar generation in the country.

“In a few years a representative share of Brazil’s power generation could come from the northeast,” Gonçalves said.

To continue reading, subscribe to BNamericas to get all the information in this article and access to related news items and reports.

Subscribe to BNamericas and gain access to thousands of project profiles, key contacts and news.

Other projects in: Electric Power (Brazil)

Get critical information about thousands of Electric Power projects in Latin America: what stages they're in, capex, related companies, contacts and more.

Other companies in: Electric Power (Brazil)

Get critical information about thousands of Electric Power companies in Latin America: their projects, contacts, shareholders, related news and more.

  • Company: Energisa S.A.  (Grupo Energisa)
  • Energisa is a Brazilian power holding company which controls 13 power distributors in the states of Paraíba, Sergipe, Minas Gerais, Rio de Janeiro, Mato Grosso, Mato Grosso do S...
  • Company: WEG S.A.  (WEG)
  • WEG S.A. is a global manufacturer and supplier of electric-electronic equipment founded in Brazil in 1961. Its clients belong mainly to the infrastructure, steel, pulp and paper...
  • Company: CPFL Energia S.A.  (CPFL Energia)
  • Brazilian holding company CPFL Energia engages in electric power generation, distribution and trading with a client portfolio of 20 million users in 569 municipalities. The grou...
  • Company: Seta Engenharia S.A.  (Seta Engenharia)
  • Seta Engenharia S.A. is a Brazilian heavy civil construction company focused on the power generation sector, bridge and viaducts, and residential, industrial, and commercial bui...