Brazil’s biggest wind company has set its sights on dominating the country’s nascent solar market.
CPFL Energias Renovaveis SA has 1 megawatt of solar power in operation now, a pilot project in Sao Paulo State, but has plans to build another 450 megawatts. That’s a lot in a country where there’s only 1,300 megawatts of solar panels running, compared with more than 11,000 megawatts of wind turbines spinning.
Chief Executive Officer Gustavo Sousa is taking advantage of two trends. Latin America’s largest economy is starting to recover from the worst recession in a generation. At the same time, Brazil — home to the most wind power in the region — is seeking to diversify its energy mix with more solar.
“We already have Brazil’s largest wind capacity and we want to walk the same path with solar,” Sousa said in an interview at his office in Sao Paulo. “I am sure the solar market will take off.”
He’ll get a chance to test that idea next week, when Brazil holds an auction for new power plants. It will be the first such event for solar power in two years, after weak demand for new generating capacity prompted the government to cancel two auctions for solar power in 2016.
Solar Demand
With the country’s economy on the upswing, Sousa is expecting strong demand for solar power. The government is helping, by setting a ceiling price for solar in the Dec. 18 auction that’s 17 percent higher than the opening bid for wind farms, 329 reais ($99.12) a megawatt-hour. In Brazil’s energy auctions, regulators set a ceiling and participants bid down the rates at which they’re willing to sell electricity, with the lowest offers winning long-term contracts to deliver energy.
Participants in the auction will vie for deals to supply energy from solar, hydroelectric, wind, biomass and thermoelectric plants that will need to go into service by January 2021. Brazil’s energy research agency said that developers have registered projects with a total of 47,965 megawatts of installed capacity for the event.
CPFL Renovaveis has about 2.1 gigawatts of wind farms, biomass plants and small hydroelectric dams operating across Brazil, and another 2.6 gigawatts of projects under development. It has wind, solar and hydro projects registered for the event.
The company is working to shore up its balance sheet, in anticipation of investing next year in new power projects, Sousa said. It’s also finishing some projects and will be ready to take on new ones.
“Next year, there is room to grow again,” Sousa said.
Source: Bloomberg
