Ahead of Sunset On Brazil’s Solar Subsidies, Developers Race to Secure Projects

Ahead of Sunset On Brazil’s Solar Subsidies, Developers Race to Secure Projects

Brazil, which has disappointed as a market for solar so far, is preparing to bring a new law, passed in March 2021, that will end the country’s transmission network price subsidy. Since only those projects which have been registered with the electricity industry regulator ANEEL by March 2022 will benefit from the soon-to-be scrapped subsidies, many power utilities and developers are trying to secure projects as fast as they can, as per a new report by ePowerBay.

“Certainly the looming end of the subsidy has accelerated the seeking of approval for new projects by developers, primarily for the solar ones,” the consultancy said. This is evident in the fact that last September, before the passing of the law ending subsidies, had recorded requests for 8.7 GW of new renewable projects, a figure that rose to 18 GW, led by solar projects, in March upon the passing of the law. Quite tellingly, the total capacity of solar parks currently operational in Brazil is just 3.3 GW.

According to the consultancy, French global energy developer Voltalia sought ANEEL’s approval for 4 GW worth of new solar projects, followed by Spanish firmIberdrola (2.1 GW), Portugal-headquartered EDP Renewables (1.75GW), Atlas (1.2GW), EDF (1GW), and Italy’s Enel Green Power (910 MW). Major oil companies also threw in their caps with Royal Dutch Shell registering 1.5GW of solar projects, and Total Eren (owned by France´s Total succeeding in obtaining approval for 49 MW in solar projects.

Solar has finally emerged as a preferred choice  in new generation projects in Brazil on account of improvements in solar power technology, the efficiency of panels and the decrease in manufacturing costs. As a result, developers have secured 4.9GW of installed capacity in issued licenses since last September, which is almost twice of that secured for wind projects (i.e. 2.5 GW).

Of the many large-scale solar projects announced this year in Brazil, it appears from ePowerBay’s research that Voltalia, New Energies and Aurora Energia have filed the most number of requests for new solar projects. Just last month, Spain-based Powertis began construction of two solar parks in São Paulo and Minas Gerais which together come up to 225MW in capacity. Additionally, local company JKL Energy’s plans to a 1GW PV project in Piauí are underway.

Solar in Brazil, which has also pushed back strongly on global efforts to protect its giant rainforests, is still a worry for many environmentalists, as they fear yet more forest lands might be cleared for utility scale solar parks.

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Soumya Duggal

Soumya is a master's degree holder in English, with a passion for writing. It's an interest she has directed towards environmental writing recently, with a special emphasis on the progress being made in renewable energy.