Brazil's grid caps power from wind and solar, threatening renewable projects
By Leticia Fucuchima
SAO PAULO, Aug 22 (Reuters) -Wind and solar energy producers in Brazil have warned they arereconsidering future investments there after the national grid operator repeatedly capped how much energy they could deliver in the past year, which squeezed their profits.
Brazil has made big strides encouraging companies to invest in wind, solar and other renewable power generation sources, offering generous financing and subsidies. But all the electricity they generate has taxed the grid.
More than a dozen executives and industry representatives said renewable energy investments were less viable under the National Electric System Operator's (ONS) current "curtailments" policy, which temporarily caps how much power ONS accepts from wind and solar plants.
The pressure has been most acute in northeast Brazil, a hot spot for renewable energy investment. There are bottlenecks in transmission lines carrying electricity to Sao Paulo, Rio de Janeiro and elsewhere in the more populous southeast region.
ONS has managed the grid more cautiouslysince August 2023, when a power outage in the northeast spread over most of the country. That has meant more curtailments when electricity generation exceeds consumption or there is a lack of transmission capacity.
ONS has said curtailments were not excessive, and were necessary for safety. The operator said its data shows only 3% of electricity generated was lost to curtailments last month.Volt Robotics, a power sector consultancy, analyzed ONS numbers.
TheBrazilian Wind Energy Association, ABEEolica, estimated the sector had lost some 700 million reais ($128 million) in the past year. TheBrazilian Solar Association, Absolar, estimated a loss of 50 million reais in the four months through July.
"Renewable energy for the country is going to waste," said Eduardo Sattamini, chief executive officer of Engie Brasil Energia EGIE3.SA,which has been affected.
The Serra do Mel II B complex in the northeast state of Rio Grande do Norte, owned by Equatorial Energia EQTL3.SA, was hit hardest among wind generators, they found. Between January and early August, 58% of power generated was rejected by the grid.
Equatorial's renewables unit Echoenergia said in a statement the curtailments had hurtits operations and translated into higher risk pricing by investors, which could cut new investments.
"This is not an environment for decision-making about new projects," the company said.
Chinese generatorSPIC's Banabuiu complex in coastal Ceara state was the worst hit among solar generators, Volt Robotics said, losing 50% of electricity generated between January and early August.
Adriana Waltrick, chief executive of SPIC Brasil, said it was critical to resolve the grid challenges, which "could increase future energy costs and impact the competitiveness of the renewable energy sector in Brazil."
Losses can be compounded because generators often must buy electricity at market rates to honor contracts with distributors and consumers.
Voltalia VLTSA.PA, a renewable energy producer with nearly two thirds of its capacity in Brazil, expects curtailments toshave some 40 million euros ($44.48 million) from its earnings before interest, tax, depreciation and amortization this year.
CPFL Energia, a power company controlled by China's State Grid, also highlighted the issue in second quarter results, flagging losses of 21 million reais.
Some companies have sought compensation in court for the losses incurred by ONS failures. Those legal battles could take years.
Offering some relief, the federal government has held auctions for private companies to build transmission lines, but many of those projects are years away from completion.
Christiano Vieira, director of operations at ONS, said more electricity from the northeast will begin flowing into the national gridin September, when a new transmission line will start operating, which may help reduce curtailments.
($1 = 0.8993 euros)
($1 = 5.4760 reais)
Reporting by Leticia Fucuchima
Writing by Stefanie Eschenbacher
Editing by Brad Haynes and David Gregorio
Aset Terkait
Berita Terbaru
Pengungkapan: Entitas XM Group menyediakan layanan khusus eksekusi dan akses ke Fasilitas Trading Online kami, yang memungkinkan Anda untuk melihat dan/atau menggunakan konten yang tersedia pada atau melalui situs, yang tidak untuk mengubah atau memperluas, serta tidak mengubah atau memperluas hal tersebut. Akses dan penggunaan ini selalu sesuai dengan: (i) Syarat dan Ketentuan; (ii) Peringatan Risiko; dan (iii) Pengungkapan Penuh. Oleh karena itu, konten disediakan hanya sebagai informasi umum. Anda juga harus ketahui bahwa konten Fasilitas Trading Online kami bukan sebagai ajakan atau tawaran untuk untuk melakukan transaksi apa pun di pasar finansial. Trading di pasar finansial mana pun melibatkan tingkat risiko yang signifikan pada modal Anda.
Semua materi yang diterbitkan di Fasilitas Trading Online kami hanya untuk tujuan edukasi/informasi dan tidak boleh mengandung nasihat dan rekomendasi finansial, pajak investasi atau trading, catatan harga trading kami, penawaran, permintaan, transaksi dalam instrumen finansial apa pun atau promo finansial untuk Anda yang tidak diminta.
Konten pihak ketiga apa pun, serta konten yang disiapkan oleh XM, seperti opini, berita, riset, analisis, harga, informasi lain atau link ke situs pihak ketiga yang tersedia "sebagaimana adanya", sebagai komentar pasar umum dan bukan menjadi nasihat investasi. Sejauh konten apa pun ditafsirkan sebagai penelitian investasi, Anda harus memperhatikan dan menerima bahwa konten tersebut tidak dimaksudkan dan belum disiapkan sesuai dengan persyaratan hukum yang dirancang untuk mempromosikan kemandirian riset investasi dan dengan demikian akan dianggap sebagai komunikasi pemasaran di bawah hukum dan peraturan yang relevan. Mohon dipastikan bahwa Anda telah membaca dan memahami Notifikasi pada Riset Investasi Non-Independen dan Peringatan Risiko kami mengenai informasi di atas, yang dapat diakses disini.
