Doing Business in Brazil

Doing Business
in Brazil
Lauro Fiuza, Jr
Vice President of ABEEólica
March 2015
Top 10 Cummulative Capacity 2014
1
China
114.76
11
Sweden
5.42
2
USA
65.88
12
Portugal
4.91
3
Germany
39.16
13
Denmark
4.84
4
Spain
22.99
14
Poland
3.83
5
India
22.46
15
Australia
3.81
6
UK
12.44
16
Turkey
3.76
7
Canada
9.69
17
Romania
2.95
8
France
9.28
18
Poland
2.80
9
Italy
8.66
19
Japan
2.79
Brazil
5.96
20
Mexico
2.38
10
2012
15th
2.5 GW
2013
13th
3.4 GW
Source: GWEC/ABEEólica
2014
10th
5.9 GW
2
Top 10 New Installed Capacity 2014
4th
position
2012
8th
1.08 GW
2013
7th
0.95 GW
Source: GWEC/ABEEólica
2014
4th
2.50 GW
3
Accumulated Installed Capacity (MW)
Source: ABEEólica
4
Growth of Capacity Contracted and Forecast (MW)
Capacity
already
contracted
(16.5 GW)
Capacity Contracted
Additional Capacity (EPE)
Forecast
Source: ABEEólica/MME/EPE
Additional Capacity (Sector)
Forecast
5
Installed Capacity
Piauí
4 (88.0 MW)
Ceará
45 (1,256.3 MW)
2
Rio Grande do Norte
83 (2,345.2 MW)
1
Paraíba
13 (69.0 MW)
Pernambuco
8 (104.7 MW)
Sergipe
1 (34.5 MW)
Bahia
40 (1,049.0 MW)
4
Rio de Janeiro
1 (28.0 MW)
Paraná
1 (2.5 MW)
Santa Catarina
13 (238.5 MW)
5
Rio Grande do Sul
43 (1,148.5 MW)
80% Renewable
3
20% Nonrenewable
Able to Operate plants: 11 (310.8 MW)
Source: ABEEólica
6
Energy Auctions
Results – Auctions of 2014
Auction
Contracted
(MW)
Maximum
Price
($/MWh)
Average
Price
($/MWh)
Negative
goodwill
(%)
Investment
(in billions)
($/MWh)
57.76
58.82
51.52
2.28
1.15
0.73
551.0
769.1
A-5 2014
926.0
59.11
59.50
51.89
Total
2,246.1
--
--
--
1.10
1.43
1.58
4.11
Average
--
56.84
56.03
1.39%
--
WTG
estimative
(2MW)
Blades
Estimative
50
276
827
43
385
1,154
47
463
1,389
--
1,123
3,369
47
--
--
Updated Prices (Dec/14)
A-3 2014
LER 2014
Capacity
Factor
(%)
Exchange rate at the auction date.
Source: ABEEólica/ccee
7
Auction Results per Year
Energy Auctions (New plants)
Energy Auctions (New plants)
All Sources
Wind Energy
Year
Capacity
(GW)
Year
Capacity
(GW)
2009
1.88
2009
1.81
2010
5.95
2010
2.05
2011
5.17
2011
2.91
2012
0.57
2012
0.28
2013
7.15
2013
4.71
2014
7.61
2014
2.25
Total
28.32
Total
14.00
Annual Average
4.72
Annual Average
2.33
Atypical year
Average without 2012 =
5.5 GW/year
Atypical year
Average without 2012 =
2.7 GW/year
Wind Power representes 50% of all new PPAs (2009-2014)
Target
Source: ABEEólica/CCEE
2.0
8
Auctions - 2015
New Energy Auction (A-3)
Alternative Source Auction (LFA)
• Realization: 04/27/2015
•
Realization: 07/24/2015
• Sources:
•
Sources:
o Wind
o Wind
o Biomass
o Small Hydro
• Begin of Energy Supply (Wind): 07/01/2017
o Biomass
• PPA supply period: 20 years
o Natural Gas thermal
• Registration:
Source
Wind
Biomass
TOTAL
Number of
plants
530
40
570
Capacity (MW)
%
12,895
86.2%
2,067
13.8%
14,962
100%
•
Begin of Energy Supply (Wind): 01/01/2018
•
PPA supply period: 30 years for Small Hydro
and 20 year for all others
•
Registration :
Source
Wind
Small Hydro
Biomass
Natural Gas Thermal
TOTAL
Source: ABEEólica/MME/EPE
Number of
plants
475
15
13
18
521
Capacity (MW)
%
11,476
201
604
6,648
60.6%
1.1%
3.2%
35.1%
18,929
100%
9
Auctions - 2015
2nd Reserve Energy Auction (LER)
1st Reserve Energy Auction (LER)
• Realization: 08/14/2015
•
Realization: 11/13/2015
• Sources:
•
Sources:
o Solar
o Wind
• Begin of Energy Supply (Wind): 08/01/2017
• PPA supply period: 20 years
o Solar
•
Begin of Energy Supply (Wind): 01/11/2018
•
PPA supply period: 20 years
Source: ABEEólica/MME/EPE
10
Operating Performance
“On 11/25/2014 there was another record of wind generation at Northeast subsystem, 2,315 MW,
with 81% of capacity factor, representing 21% of total power generation.”
System Operator - ONS
Jan
Feb
Mar
Apr
May
Jun
Jul
Source: ABEEólica
Aug
Sep
Oct
Nov
Dec
11
Wind Characteristics in Brazil
Northeast
South
Wind Direction – Oct, 2013
Frequency (%)
Frequency (%)
Wind Direction – Oct, 2013
Direction
Direction
Wind Speed (m/s) – Oct, 2013
Average Speed (m/s)
Average Speed (m/s)
Wind Speed (m/s) – Oct, 2013
Time (%)
Time (%)
Source: AMA/EPE
12
Operating Performance
(Without PROINFA)
Average = 43%
Jan
Feb
Mar
Apr
May
Jun
Jul
Source: ABEEólica
Aug
Sep
Oct
Nov
Dec
13
Benefits and Indexes of Wind 2014
6 millions of
houses
supplied
monthy,
average
3 millions of
tons of CO2
avoided
US$ 6.2
billions were
invested on
wind sector
US$ 1.8
billions of
economic
charges
avoided
12 TWh of
wind
generation
Exchange rate =
US$ 2.35
Source: ABEEólica/ccee/BNEF
14
Certificate of Renewable Energy
•
Goal: foster energy market generated from renewable and encouraged sources with high performance
in terms of sustainability.
•
Types of certification:
➢
Certification of renewable energy generation plants eligible;
➢
Stamp concession facing consumers of certified energy.
Electrical
Energy
Wind
Generator
Social and
environmental
attributes
15
Advantages
•
Long Term Credit
• BNDES: competitive long terms
•
Credit Lines for Manufacturers
• FINAME from BNDES
• Tax Incentives (Federal, State and Municipal)
16
FINAME (Financing for machinery and equipment)
•
•
What is this? FINAME’s resource is earmarked for financing purchase and sales operations and
exports of Brazilian machinery and equipment, as well as imports of goods of the same nature produced
overseas.
How to get it? There are goals to be achieved gradually to register the equipment as a FINAME
equipment.
Starting
Point
• January 1st, 2013
Stage
A-2
• July 1st, 2013
Stage
A-3
• January 1st, 2014
Stage
A-4
• July 1st, 2014*
Stage
A-5
• January 1st, 2015*
Stage
A-6
* Some goals of these stages were postpone.
• January 1st, 2016
FINAME Rules
Stage A-6
Stage A-5
Stage A-4
Stage A-3
Stage A-2
Starting
Point
(Reach 3 of 4)
• Tower
Fabrication (70%)
- itself unit or third
parties
• Blades
Fabrication - itself
unit or third
parties
• Hub Assembly itself unit
• Nacell Assembly
- itself unit
• Tower
Fabrication (70%)
- itself unit or third
parties
• Hub Assembly
with national
internal
components itself unit
• Nacell Assembly
- itself unit
• Tower
Fabrication with
national internal
components itself unit or third
parties
• Blades
Fabrication (40%)
- itself unit or third
parties
• Hub Assembly
with national
internal
components itself unit
• Nacell Assembly
- itself unit
• Blades
Fabrication (50%)
- itself unit or third
parties
• Hub Assembly
with national
internal
components itself unit
• Nacell Assembly
- itself unit
• Tower
Fabrication with
60% of national
forged - itself unit
or third parties
• Blades
Fabrication (60%)
- itself unit or third
parties
• Hub Assembly
with national
internal
components itself unit
• Nacell Assembly
- itself unit
• Nacell Assembly
with national
components itself unit
Wind portfolio of BNDES - Evolution
2,000,000
1,800,000
1,600,000
Exchange rate = US$ 2.5
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
Approvals
Financing
Wind Farms
Forecast 2014: Growth of 15% compared to 2013 approvals
19
Opportunities
•
Local Content Demand
•
Consistent Growth of Wind Power within the Power Matrix
•
High Demand for Business Services and Consulting
•
Independent O&M Players
•
Training Programs for Industry Professionals
20
Challenges
•
Early Stage Industry
•
Labor Opportunities
•
Technology
• Adjustment to Brazilian wind conditions
• R&D
•
Grid
•
Infrastructure
21
Members
22
Thank You!
CONTACT:
Lauro Fiuza Junior
+ 55 11 2368-0680
fiuza@servtec.com.br
www.abeeolica.org.br
Bons Ventos Aracati
Wind Farm
23