Offshore wind power: new regulations boost investment in the sector.
- Alpha AIX
- 5 days ago
- 3 min read
The decree is far from solving all the demands, but it opens new horizons to provide comfort to the production chain, with the definition of the concepts of planned transfer and independent transfer procedures.
The market is still analyzing Decree 10.946/2022 regarding the main guidelines for the exploration of offshore wind projects in Brazil. The main point concerns the granting of rights to use physical spaces and the exploitation of natural resources for renewable energy generation.
There is a consensus that regulatory predictability is essential to unlock investments, especially for giants like Shell, Equinor, Iberdrola, and Engie, who are eyeing Brazil for its offshore wind potential and synergies with green hydrogen production.
It is worth highlighting three points: there is no perfect regulation, the drafting of the Decree was far from trivial, and the effort of the Ministry of Mines and Energy (MME) in interacting with the market in this movement, which was no longer an option but a necessity, especially in a context of economic recovery, must be acknowledged, says Fernando Flach, Executive Director of Alphainfra Energia, which operates in the development of three offshore wind projects in the South and Northeast of Brazil.
According to Fernando Flach, the Decree is far from solving all the demands, but it opens new horizons to provide comfort to the production chain, with the definition of the concepts of planned transfer and independent transfer procedures. From now on, it is essential for the Ministry of Mines and Energy (MME) to reduce the asymmetry of information in complementary regulations with speed, such as regarding the criteria for interference in the maximum limit of the extension of areas, because the greater the perceived risk of the sector's agents, the greater the "spread" priced into the cost of capital for investors. I believe that, regardless of the Decree, the issue of energy trading in specific auctions will be more viable with the integration and experience of international players from Europe and China to bring offshore technology to more competitive price levels.
According to the President of ABEEólica, Elbia Gannoum, in a sector that is taking its first steps, this security is fundamental so that companies, society, and the government know the technical criteria, requirements, mandatory studies, and the bodies that will be responsible for analyzing, approving, and formalizing the progress of each stage of the projects, which are more complex than onshore wind projects. It is worth remembering that IBAMA already has more than 80 GW of offshore wind projects under analysis, demonstrating the great interest of investors.
According to Franklin Miguel, Executive at Norte Energia and Coordinator of the MBA program at FISUL, despite the higher installation cost compared to onshore technology, offshore wind turbines have a higher capacity factor, less wind turbulence, and the possibility of installation near load centers, such as off the coast of the states of São Paulo and Rio de Janeiro. Another advantage is the development of the Brazilian shipbuilding industry, which is currently practically dependent on Petrobras. Data from the EPE roadmap estimates that the potential in locations with a depth of 50m is greater than 700GW.
Given that these are capital-intensive projects, Bruno Cassavia, Senior Trader at the energy trading arm of Banco ABC, expects that the participation of private and development banks will be fundamental to the expansion of offshore wind power in Brazil. In addition to generating jobs and income for the implementation regions, projects of this size are capable of attracting a large volume of foreign capital, which typically has the potential to access highly competitive credit lines – an important variable for the financial viability of offshore wind power.
Via Canal Energia:
