![Colombia , Chile , Mexico , Uruguay and Brazil Colombia , Chile , Mexico , Uruguay and Brazil](https://cdn-www.bnamericas.com/img/flags/ALL.jpg)
Why Colombia and Brazil are the leading LatAm offshore wind markets
![Why Colombia and Brazil are the leading LatAm offshore wind markets](https://cdnimg.bnamericas.com/wEQtqIjnLjnVWxAfBeGZQOilgwiIrTCrKqnnGUSXDCCZwfCUaknrUIXovCJXjDvO.jpg)
The offshore wind generation industry in Latin America attracts the interest of various developers due to the possibility of building large-scale projects with potential synergies with other industries, such as green hydrogen.
In the region, Brazil and Colombia are the countries that have made the most progress, although there is also interest in Chile and Uruguay. Other countries, like Argentina, have great potential that could be attractive in the future.
BNamericas spoke with Sergi Ametller, director of offshore wind at Spanish technology and engineering group Sener, and Marta González, leader of wind technology and marine energy at the same company, about the outlook for offshore wind energy in Latin America.
BNamericas: Why has Sener decided to explore offshore wind projects in this region?
Ametller: We are a company with a technological vision, our DNA is to develop innovative technology at the cutting edge. Offshore wind is a difficult discipline. It requires very broad knowledge and complex local studies, which take into account many parameters. Few companies have all the necessary capabilities to tackle these projects.
From our point of view, it is a sector in which we decided we wanted to be and in which we are investing a lot of effort. And we are doing very well. We have several business units that apply to this type of project. First is engineering, where we help designing different projects for different clients. We also carry out implementation work in any region of the world, and in Latin America we are working on that; developers ask us for help in the early works phase, in processing the permits that are needed to launch these projects.
We also carry out construction support, currently mainly in Europe, which is a mature market for offshore wind power, and there our teams support clients with the execution side. We also have our own product lines, including patents and internal developments for float and substation technologies, which we offer to the market. Sener also invests in specific projects and works as a partner with other investment companies.
Regarding South America, we are in Brazil, analyzing optimum areas and projects for that market in an initial stage. We are also in Colombia, where we explore specific projects.
BNamericas: What are the main jurisdictions that are attracting interest in the region?
González: Between Colombia and Brazil, I would say that Colombia is winning the race so far. It has published zones, it has published a key decree to manage water concessions, it is processing some projects' permitting, and for these reasons it is a little ahead of Brazil in terms of regulations, and we will see if this trend continues.
We have done an analysis of other countries at the wind resource level, but not in depth in the regulatory framework. I would be surprised if another country in South America has advanced more on this issue. In the world in general, the regulatory framework is still being defined in many countries.
Ametller: I agree that Brazil and Colombia are the countries that we see as most advanced. Perhaps Colombia will be the first to build an offshore wind facility. We also see more and more interest in Chile, we receive inquiries about it, and in Uruguay, which is planning to take advantage of its offshore wind resource [with a series of tenders next year].
Also, in the Caribbean and Central America, we receive occasional inquiries for smaller projects. But at the level of large, strategic projects, Colombia and Brazil are the main players in this sector, for now.
Some of these projects are linked to electricity production, taking advantage of the excellent wind resource and injecting energy into the grid. We also see that in some regions, developers are considering specific hydrogen projects, that is, to have the wind farm off the grid and use it as energy source to produce green hydrogen for export or for internal use.
We see the export option is generating more and more interest. Our clients also tell us that onshore wind is encountering more and more difficulties in the region in terms of permitting and environmental concerns, and they see that offshore wind can facilitate those areas, simplifying the permitting aspect.
González: It is a combination of factors. Where is the resource, where are the population centers and the demand, etc? That is part of the problem that green hydrogen comes to solve.
On the other hand, it depends on the availability of potential onshore wind projects, which are cheaper. For example, in Brazil is still a lot of availability for this type of project. Therefore, the regulation and tax rules become important, and I think they will set the tone. Countries will encourage the development of hydrogen when it is linked to offshore wind power, for example. Each country will have to look at its own considerations, and that will show us if offshore wind power in a certain region makes sense on its own, or in accordance with other technologies, such as hydrogen.
Ametller: I would add decarbonization. In many parts of the world, one of the main drivers is to seek the decarbonization of electricity production, to depend less on gas and oil. That is a very important factor.
Demand depends on the country and the area. There are areas of Brazil where the energy forecast shows needs for new generation, and there are sparsely populated areas where that offshore wind power will go toward hydrogen with a view to export.
Competition is important. In countries with large areas of onshore wind power available in the short term, our understanding is they will continue with onshore wind power due to lower cost.
BNamericas: What is happening in Mexico? Does it have potential?
González: It is not known for being the country with the best wind resource in general, although there are specific areas that do have good resources.
Ametller: Today there is not much activity. The resource is greater elsewhere in America. In Mexico, onshore wind energy production is growing, and at least in the medium term, we do not see Mexico looking significantly to the sea for wind energy. We believe it will arrive later.
BNamericas: What other logistics developments are needed for this industry to take off locally?
Ametller: An important driver is ports infrastructure. To carry out large offshore wind projects, you need a large-scale logistical base, of great depth, to carry out these construction and supply operations for everything the offshore wind project requires. For example, in the US, this is leading to large port investments, both on the East Coast and on the West Coast. In South America, we are not seeing it yet. This will become a necessity, and it could be a limitation for the implementation of these projects. If there is no logistical support from the ports, it is very difficult for these projects to materialize.
At a technological level, there will be turbine supply, which will grow in size. Right now, most projects are planned with 15MW or 16MW turbines, but soon we will start preparing them with 20MW. Regarding floating and fixed foundations, the technology will be there, but we will need manufacturing. Shipyards, workshops, ports are going to be needed, and that may require planning and a longer term effort.
It is more complex to develop that production capacity than to comply with the rest of the parameters. This factor could slow down early developments. We hope that in the short term, we will see the industry react and that these critical points get solved as the market prepares for implementation.
BNamericas: You have mentioned the development of hydrogen projects in conjunction with offshore wind. What do offshore developments offer compared to other technological alternatives?
Ametller: Offshore wind power gives you energy at a reasonable cost and with many hours of production per year. You can have 5,000, 5,500 hours in good zones, which helps ensure the electrolyzer is running at high capacity.
If you only depend on photovoltaic sources, your energy will be limited to the time of day. In addition, you can generate great power at sea with large capacity projects, and install 2GW or 3GW without taking up a lot of space.
On land, large capacity projects are not always easy, because of the impact on the environment, communities, etc. Regarding hydrogen, we are going to see technological hybrids in the medium term that seek to optimize each area's characteristics.
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