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After several years of negotiations, Brazil’s president, Luiz Inácio Lula da Silva, signed into law bill No 576 of 2021 in January, which provides a governmental framework for regulating offshore wind development in the country. 

The new law was drafted in 2021 and approved by the Brazilian Senate late last year following its passage through the lower house in 2023. 

It brings into force a range of regulations familiar in offshore wind development such as a “free, prior and informed consultation process” with impacted groups ahead of any developments. Provisions to protect the country’s environment, local economies and its vital tourist sector are also included in the bill. 

Brazil’s government hopes the new law can help to realise the massive interest in offshore wind shown by developers in recent years.

Roberta Cox, policy director for Brazil at the Global Wind Energy Council, told “uåX˜äŠÊ˜·³Ç: “The market is very interested in Brazil and responded positively to the approval of the legal framework.

"There are 103 licensing requests filed with Ibama [the Brazilian Institute of Environment and Renewable Natural Resources], totaling 245GW of installed capacity. The processes are awaiting the auction of areas so that they can proceed with the environmental licensing. This huge number of open processes demonstrates the immense interest of the national and international market in developing offshore wind power in Brazil.”

Major players in energy including a range of oil and gas companies that also develop offshore wind have expressed interest, including Neoenergia – a subsidy of Spanish utility Iberdrola, offshore wind specialist Ocean Winds, French oil major TotalEnergies, French utility EDF, and Norwegian oil giant Equinor. 

The rising interest in Brazil means offshore wind in South America is now emerging as a viable source of clean energy in two of the continent’s major economies, Alba Teodoro Pujol, market analyst from offshore wind intelligence company Aegir Insights, said.

“While Brazil just approved its offshore wind regulatory framework, Colombia moves forward with its first offshore wind auction," she noted. "The Colombian auction is the first of its kind in South America and the two markets remain key in driving South America’s offshore wind development.”

Brazilian President Luiz Inacio Lula da Silva (pic credit: Buda Mendes/Getty Images)

Waiting for traction

Nevertheless, a lack of clarity over key details like the design of future offshore wind auctions in Brazil could make genuine interest from developers harder to gauge and even delay new investments. 

“Several uncertainties remain, including key auction details, which require clarification to attract large-scale investment,” Réka Kékesi, a market analyst at Aegir Insights, told “uåX˜äŠÊ˜·³Ç. 

“The entry barriers are quite low, and developers may simply aim to stay prepared for when the market gains traction. This makes it difficult to determine the actual level of active interest in Brazil, especially as some developers have shifted focus from emerging markets to more mature ones,” she added. 

While it may not be a mature market for offshore wind, Brazil is the largest country in Latin America by surface area and population, and has the largest economy. 

Meanwhile, data from the International Energy Agency (IEA) shows Brazil consumes far more energy than any other Latin American country — with its usage accounting for more than 45% of the entire region’s energy consumption in 2022. 

Brazil's electricity infrastructure is already well advanced thanks in part to the prevalence of hydropower (pic credit: David Silverman/Getty Images)

The road ahead

Despite these advantages, the future of offshore wind power in the country remains dependent on the readiness of its infrastructure and the viability of offtake for the electricity produced. 

To that end, a roadmap published in 2021 by Brazil’s Energy Research Office, known as EPE, showed that development of Brazil’s ports would likely be necessary to accommodate future offshore wind farms. 

Meanwhile, the country’s grid and transmission system – the National Interconnected System, or SIN – is well-developed. This is partly due to the advanced state of hydropower in the country, which accounted for 60% of electricity generation nationwide in 2023, according to energy think tank Ember. 

“Brazil has a robust interconnected system – Brazil's electricity production and transmission system is a large-scale hydro-thermal-wind system, with a predominance of hydroelectric plants and multiple owners,” Cox pointed out. 

“The interconnection of electrical systems, through the transmission grid, enables the transfer of energy between subsystems. The integration of generation and transmission resources allows for the market to be served safely and economically.” 

With the majority of electricity demand in Brazil already met by clean power sources, addressing future demand and offtake for offshore wind remains a challenge. 

The country is exploring potential opportunities for green hydrogen as one potential option, with a legal framework for low-carbon hydrogen approved last year. The mining and energy ministry recently organised an open call for hydrogen hub proposals, receiving 70 applications and approving 12. 

Cox said this demonstrated a “national appetite” not only for hydrogen, but also for “the infrastructure for flow and transmission lines, and consumption for decarbonisation of cement, steel and fuels”, which are more reliant on energy from fossil fuels such as oil and gas at present. 

Finding space for offshore wind offtake more generally remains a formidable yet achievable task with the right application of resources. 

“The country needs a strategy to take advantage of this immense potential, directing its renewable resources to decarbonise other sectors such as maritime transport, aviation, public transport, as well as agriculture (fertilisers) and the industrial sector. Energy exports can also be profitable and a move to attract new industries that want decarbonised products is strategic, such as data centres and technology industries,” Cox said.