IN DEPTH: Brazil’s local discontent

August 4, 2014

Alexandre Spatuzza – Recharge News, 8/4/2014

The national development bank, BNDES — which offers cut-rate loans to developers using accredited turbines — has brought in a long list of local-content requirements for pretty much every component of the turbine, right down to the screws that hold them together.

While much of the focus of the so-called Finame requirements has been on the four main criteria — that towers, blades, hubs and nacelles are sourced locally — there is an even bigger problem to solve — there are not enough local parts manufacturers to meet the demands of the 2GW-a-year industry.

And this is just one of the local difficulties that turbine manufacturers face in Brazil — a saturated market with relatively low power prices, expensive production, thin margins, troublesome logistics, high taxes and complex bureaucracy.

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Brazil Exports First Military Drone: Flight Technologies FT-100 Horus Heads To Unnamed African Country

August 4, 2014

Angelo Young – International Business Times, 8/4/2014

The first Brazilian-made tactical drone is headed to Africa before the end of the year, says São Paulo-based FT Sistemas S.A., one of the country’s larger producers of unmanned aerial vehicles. The company wouldn’t say which African country is buying its FT-100 Mini-UAV, or for what purposes.

“The Horus FT-100 was designed in conjunction with the Brazilian Army . . . to be used in typical applications of short range performed by platoons, companies or even battalions,” the company said in its announcement (in Portuguese) from July 28. It didn’t mention the value of the deal. Brazil is emerging as a major player in the sale of modern military equipment in emerging and developing markets that can’t afford equipment developed by major players, like Bethesda-based Lockheed Martin Corporation (NYSE:LMT) or Britain’s BAE Systems plc (LON:BA).

“The UAV market remains dominated by the US and Israeli defense contractors, but other nations have been heavily investing in the technology especially for more cost-effective, less technologically advanced solutions,” said IHS Jane’s Defence Industry.

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Brazil Development Bank to Allow Solar Imports Until 2020

August 1, 2014

Vanessa Dezem – Bloomberg, 7/31/2014

Brazil’s BNDES development bank will allow solar developers to import photovoltaic cells until 2020 as part of efforts to spur domestic solar manufacturing capacity.

From 2020, local content rules will require developers to use components produced in Brazil to qualify for its low-cost financing, Antonio Carlos Tovar, head of renewable energy development for BNDES, said in an interview in Rio de Janeiro July 29.

Brazil currently gets less than 1 percent of its electricity from solar power and has almost no domestic photovoltaic production. Banco Nacional de Desenvolvimento Economico e Social, the development bank’s formal name, used similar local-content rules to promote the wind industry.

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M-commerce in Brazil up 84 percent in a year

August 1, 2014

Angelica Mari – ZDNet, 7/31/2014

The number of Brazilians using mobile devices for purchase of products and services has skyrocketed with an 84.2 percent increase over the last 12 months, according to recent research.

In June 2013, mobile transactions represented 3.8 percent of the total e-commerce pie in Brazil — by June 2014, that number had gone up to 7 percent.

During that period, 2.89 million transactions were carried out, the equivalent to R$1.13bn ($497m), according to the report WebShoppers by consultancy firm e-Bit. The key segments are fashion and accessories with 18 percent of all sales, followed by cosmetics and health products with 16 percent and electronics with 11 percent.

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Brazil creates modern energy matrix

August 1, 2014

Élbia Melo – Recharge News, 8/1/2014

Proinfa’s objective was to make possible the contracting of “non-conventional” renewable energy — biomass, small hydro and wind — even when these sources had production costs much higher than conventional hydropower, in order to send an investment signal.

At today’s prices, wind was contracted for about R$370 ($165) per MWh in that period, while biomass and small hydro were contracted at prices above R$200/MWh, in contrast to conventional hydro prices of around R$100/MWh. This was similar to the feed-in tariff regimes used by Europe and most of the developed countries that implemented strong renewables policies from the mid-1990s.

Wind and solar have stood out strongly in the past ten years in the evolution of their technology and production costs. These factors have allowed an exponential increase in investment and brought strong competition in equipment prices.

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El Nino Rains Won’t Refill Brazil’s Key Hydropower Dams

August 1, 2014

Vanessa Dezem – Bloomberg Businessweek, 8/1/2014

The drenching El Nino rains that may replenish Brazil’s hydropower reservoirs will probably miss the nation’s most important dams, now at historic lows as the country endures its worst drought in eight decades.

The weather phenomena that’s causing floods in Brazil’s south won’t travel far enough north to help refill reservoirs in Sao Paulo, Minas Gerais, Rio de Janeiro and Espirito Santo states, where 70 percent of Brazil’s hydropower capacity is located, said weather forecasters Climatempo and Somar Meteorologia.

“There is no hope that El Nino will fill the southeastern water reservoirs,” said Thaize Baroni, a meteorologist at Sao Paulo-based Somar. “It won’t change conditions for this year and it can make it worse, as the region may have even dryer weather in the next few months.”

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Wind accounts for 58% of Brazil reserve auction submissions

July 30, 2014

Patrick Smith – Windpower Monthly, 7/30/2014

The country’s energy consenting body Empresa de Pesquisa Energética (EPE) said that wind projects accounted for 58% of the total 26.3GW proposed for October’s reserve auction.

Proposals were put forward for 626 wind projects, while solar accounted for 400 of the planned developments. There were also submissions for eight biogas projects.

The reserve auction differs from standard auctions in that it is not designed to meet the anticipated growth in demand, but rather provide energy security by creating a reserve capacity beyond that. EPE announced earlier this week that it will delay the reserve auction until 31 October, from the previously planned date of 10 October.

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Brazil farmers say GMO corn no longer resistant to pests

July 29, 2014

Caroline Stauffer – Reuters, 7/28/2014

Genetically modified corn seeds are no longer protecting Brazilian farmers from voracious tropical bugs, increasing costs as producers turn to pesticides, a farm group said on Monday.

Producers want four major manufacturers of so-called BT corn seeds to reimburse them for the cost of spraying up to three coats of pesticides this year, said Ricardo Tomczyk, president of Aprosoja farm lobby in Mato Grosso state.

“The caterpillars should die if they eat the corn, but since they didn’t die this year producers had to spend on average 120 reais ($54) per hectare … at a time that corn prices are terrible,” he said.

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Appalachian’s Energy Center will help improve life for Brazil’s catadores

July 29, 2014

ASU News, 7/28/2014

A community-based landfill gas project in Brazil piloted in 2009 by the Appalachian Energy Center located at Appalachian State University will soon become reality.

The Green Methane Committee in Fortaleza/Maracanaú, Brazil, which the Appalachian Energy Center helped form and train, will receive approximately $750,000 from the Brazilian Ministry of the Environment – National Fund on Climate Change to construct a system to collect and utilize methane gas from the Maracanaú Landfill. The Appalachian Energy Center also helped plan this landfill gas collection and utilization system.

The gas will be used at an Energy Park that will be constructed adjacent to the landfill where catadores (Brazilian waste pickers) will gather plastic and glass recyclables from the waste stream before they end up in the landfill, providing more profit for these workers.

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Brazil State to Purchase Solar Power After Failing to Lure Buyer

July 28, 2014

Vanessa Dezem – Bloomberg, 7/28/2014

Brazil’s Pernambuco state, which held the nation’s first solar-energy auction last year, said it is on the hook to buy the power after it was unable to find other bidders.

Pernambuco’s government agreed this month to buy the electricity from solar projects with the capacity to produce 96 megawatts of power, said state Secretary of Infrastructure Joao Bosco de Almeida. Contracts to build the projects were awarded in December to developers including Italy’s Enel Green Power SpA, who agreed to sell the power at an average price of 228.63 reais a megawatt-hour ($102.53) for 20 years. The contracts were only to build the projects and didn’t include buyers.

Although getting cheaper, solar power prices are still about 75 percent higher than those offered in the last wind-energy auction in June because the technology is still expensive and all of the equipment has to be imported. In addition to the high price, the duration of the contracts that Pernambuco was offering also deterred buyers, said Helena Chung, a Sao Paulo-based analyst for Bloomberg New Energy Finance. Buyers in Brazil’s wholesale market usually sign contracts for no longer than 10 years.

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