Brazil working to propose offshore wind regulation by year-end – energy minister

Brazil’s federal government expects to present the national congress with a proposal to regulate offshore wind power generation by the end of this year, mines and energy minister Alexandre Silveira (pictured) told BNamericas. 

"Regarding green hydrogen, we're evaluating the details of a regulation in order to have an integrated energy policy," he said.

During the opening of the Brazil Wind Power conference, on Tuesday, Silveira highlighted that Brazil has already registered US$30bn of hydrogen projects. 

“We want to create the conditions for this progress,” the minister said, adding that the country will soon have a legal framework for carbon capture and storage. 

In the government's view, wind and solar power will be important sources not only for the development of green hydrogen but also for the production of ammonia to reduce the country's dependence on fertilizer imports.

In order to deal with the expansion of installed capacity of renewable energy in Brazil, mostly in the northeast, the government is working to solve the mismatch between power transmission and generation. 

“We’ll integrate renewable sources safely, and Brazil will be a storehouse of clean, renewable energy,” he said. 

Silveira underscored that the energy transition will require Brazil to expand production of strategic minerals such as lithium, with an eye on the country's transportation matrix.

“The new PAC [federal growth acceleration program] is along these lines, prioritizing the energy transition, with a potential investment of around 600bn reais [US$120bn],” the minister said.

The governor of Rio Grande do Norte state, Fátima Bezerra, highlighted that the northeast has a portfolio of almost 200bn reais in renewable generation investments 

"Hence the importance of the government working on expanding the transmission network," she told the conference.

Besides the approval of the offshore regulatory framework, Bezerra cited the taxation of the energy sector in the context of tax reform as an essential agenda for the sector.

Bautista Sanchez, CEO of Ocean Winds, said that offshore wind generation requires specific regulation to bring security to investors and financiers. 

"There are already well-established regulatory models in the world, such as in France, but it's not necessary [for Brazil] to follow a specific regulatory example," he told BNamericas. 

During the conference, Bautista said that the large amount of room for onshore wind growth in Brazil does not limit the expansion of offshore wind, "which tends to be an important part of the clean energy mix that Brazil will need."

A joint venture between EDP Renováeis and Engie, Ocean Winds signed an MOU on Tuesday with Prumo Logística that bolsters the companies' commitment to boosting offshore wind energy initiatives in Brazil. 

Prumo is the holding company responsible for developing Açu Port in Rio de Janeiro state.

Ocean Winds already had an MOU signed with the governments of Rio Grande do Sul and Rio de Janeiro states. 

Fernando Elias, chairman of Brazil’s wind power association Abeeólica and director of Casa dos Ventos, said that it is up to the country to create regulations for the new economy, with a view to producing steel, strategic minerals and clean energy.

He warned that the Brazilian industry faces challenges because the national content policy (BNDES' Finame) has been weakened, and there are also tax issues that need to be resolved.

Generators and distributors are also experiencing difficulties due to the oversupply of energy and the end of some incentives. 

"We need to rethink the withdrawal of incentives, considering their postponement so that Brazil can continue to be a protagonist in wind energy," Elias said.

Elbia Gannoum, CEO Abeeólica, said that investment in renewable energy will help cut emissions and also reduce inequalities. 

“We’re in the midst of an opportunity for green industrialization in Brazil, with onshore and offshore wind energy and also green hydrogen,” she told Brazil Wind Power. 

According to Ben Backwell, CEO of the Global Wind Energy Council (GWEC), there are projections that there will be a shortage of materials and equipment for the global wind industry in countries like the US and China by the middle of this decade

“Brazil has a unique opportunity because it has an abundance of steel, aluminum, copper and bauxite,” he underlined. 

Petrobras' executive director for energy transition, Maurício Tolmasquim, said that Brazil is very well positioned to be a winner in the global energy transition process. 

He cited the country's potential in terms of biomass, reforestation and renewable fuels, as well as green hydrogen as a driver for the expansion of renewable sources.

The federal oil giant intends to allocate 6% to 15% of its capex to low-carbon projects during 2024-28.

With additional reporting by Joao Montenegro