Booming Brazil wind power market draws foreigners

Already blessed with huge hydro and fossil fuel resources, Brazil is seeing a wind power boom as production prices fall and government incentives lure in a growing number of foreign suppliers. The country\'s wind power sector has a current capacity of around 1,400 megawatts, and is expected to grow nearly eight-fold by 2014, according to the Brazilian Association of Wind Energy ABEEolica. And a study by IHS Emerging Energy Research says Brazil, already Latin America\'s leading wind energy market, is expected to have 31.6 gigawatts of installed capacity by 2025. At a government-organized power auction last August, developers of 44 wind farms in Brazil won 39 percent of the total capacity contracted an average price of 99.58 reals ($62.91) per megawatt-hour, offering for the first time a price below the average for two gas projects (103.26 reals) and a hydroelectric one (102 reals). Lower production prices, government incentives and Brazil\'s soaring electricity demand have attracted a number of significant foreign players. Wobben Windpower, a subsidiary of German group Enercon, set up the first wind turbine factory in Brazil in the 1990s and expects to install 22 wind farms totaling 554 MW by the end of 2012. It has since been followed by Spain\'s Gamesa, Argentina\'s Impsa, Germany\'s Siemens, Denmark\'s Vestas -- the world biggest wind turbine manufacturer -- GE Wind -- a branch of GE Energy, a subsidiary of General Electric of the United States -- and India\'s Suzlon. The latest to join was French engineering giant Alstom, which last Wednesday inaugurated a wind turbine manufacturing plant in the northeastern state of Bahia, its first in Latin America. The plant, located in the industrial complex of Camacari near Salvador, Bahia\'s state capital, will serve the domestic and export markets. Alstom says its ambition is to match its current 40 percent market share in the Brazilian hydropower plant sector, which is Brazil\'s main source of electricity generation. \"We won\'t achieve that tomorrow, but in 10-15 years we can. We are very ambitious in this (wind) sector, not only in Brazil but in the rest of Latin America,\" said Philippe Delleur, president of Alstom\'s Brazilian unit, told AFP at the inauguration ceremony. As to production costs, Delleur expressed hope that they will not drop too much further. \"We hope prices will stabilize around prices which correspond to the profitability of our investment,\" he noted. Domestic developers such as Desenvix, Dobreve, Renova and CPFL are also active and, according to industry sources, MPX, the energy division of Brazil\'s billionaire business tycoon Eike Batista is also expected to invest heavily in the wind sector. The greatest potential is in the country\'s northeast, particularly in the states of Bahia, Rio Grande do Norte and Ceara, due to fast wind speeds and low incidence of tornados or hurricanes. Most of Brazil\'s wind farms are located on land. In Bahia, Desenvix has invested $223 million in the state\'s first wind farm which will start operation in Brotas de Macaubas, some 600 kilometers (375 miles) west of Salvador, early next year. And Renova plans to begin production next July at 14 wind farms in the southwest of Bahia with a total capacity of 294 MW, which will be the biggest domestic wind farm complex. \"We have identified a potential of more than two gigawatts (in the region),\" Ney Maron de Freitas, a Renova executive, told AFP in his suburban Salvador office. \"The potential for wind in Bahia is excellent because of the quality, regularity and intensity of the winds,\" he added. Wind power is also a boon for small companies such as Teknergia, a company based in the nearby small town of Laura de Freitas which advises businesses and individuals on efficient use of renewable energy. Teknergia\'s director Gerson Sampaio showed a 2.4 KW wind turbine his company installed on the roof of a local residence at a cost of around $20,000 that can be amortized in three to four years. Sampaio said that in the not too distant future, companies and even households will be able to produce electricity for their own use and to sell whatever surplus they have to the local power grid.