The only project of any note that started operations in 2004 was the 19.5 MW Jepirachi wind plant of Nordex 1.3 MW turbines in the north eastern region of the windy Caribbean Colombian coast. The wind plant, installed in late 2003 and the only one in Colombia, has an impressive capacity factor of 46%. Its 68.3 GWh of generation is sold by utility EPM through the Colombian wholesale power exchange and it sells its carbon emission credits to the World Bank's Prototype Carbon Fund. This is EPM's first serious incursion into wind power and is designed to help it evaluate the feasibility of further projects. Colombia's wind power potential is estimated at 5000 MW.
Otherwise, installed wind power capacity in the region remains at just 150 MW, mainly in single plant in Costa Rica, Brazil, and Argentina, with a small handful of turbines in Mexico and Chile.
By far the largest advance for wind power in Latin America last year came with the tender of licenses for the Brazilian government's renewable power program, Proinfa, which will finance construction of 3300 MW split equally between wind, biomass and small-scale hydroelectric power. The government expects to attract a total of BRL 8.6 billion ($3.3 billion) investments for Proinfa, and create 150,000 direct and indirect jobs.
Brazil has been talking about Proinfa for nearly a decade, so the fact that the laws were published and the contracts awarded comes as a huge relief to project developers. It has been a bumpy ride so far, not untouched by a whiff of controversy. The government, through its power firm Eletrobrás, will pay BRL 204.35/MWh ($78/MWh) for projects with a capacity factor of up to 34.2%, with the price falling gradually to BRL 180.18/MWh ($69.3) for projects with capacity factors greater than or equal to 41.9%. Critics say this punishes efficient projects, but the government has remained steadfast.
The selection process for power purchase contracts was equally controversial, as the government chose to award licenses based on a first come, first served basis. It also ruled that only 50% of projects would be awarded to companies with links to large national or international power companies, while the other 50% would go to small, independent firms, most of which would be stepping into the power business for the first time.
Through four rounds of selection, companies jockeyed for positioning to secure the most contracts. Some large names, such as Spain's Gamesa and France's EDF Energies Nouvelles, were almost completely left out in the first rounds; the Spanish firm gave up in despair. EDF's renewables unit persevered, even challenging some of Eletrobrás' decisions in court. It finally secured a 135 MW project in Rio de Janeiro state. Other winners included Enerbrasil, of Spanish utility Iberdrola, with four projects for 243.3 MW, and Enerfin, of Spain's Elecnor, with three 50 MW projects.
off the drawing board
Almost as soon as the contracts were awarded, developers panicked as the deadline for bringing projects online was December 2006. After industry lobbying, the government relented, extending the start-up deadline by two years, to the end of December 2008. With some of the pressure lifted, developers are now talking with financiers and equipment suppliers to move the projects off the drawing boards and into reality.
A number of interesting financing options have arisen, led by Brazil's national development bank, known as BNDES, and its smaller regional sister institution, the Banco do Nordeste. At the government's instigation, Brazil's largest pension funds joined forces to raise BRL 800 million ($308 million) for investing in renewables projects. The fund could raise up to BRL 1.2 billion ($361 million), according to newspaper reports.
The biggest question mark currently hangs over the suppliers. The Proinfa rules require up to 60% of equipment for the wind plants to be manufactured locally, which puts Germany's Wobben “uåX˜äŠÊ˜·³Ç, the only firm with significant local production in Brazil, in the driving seat. Spanish firms Gamesa and Ecotècnia, as well as Denmark's Vestas and American GE Energy are all reported to be interested in setting up local production facilities. But they will only do so once they are assured of a critical mass of orders, which is not the case while uncertainty over the terms and conditions for the second phase of Proinfa remains. Even with a deadline extension for completion of projects, developers could find themselves unable to buy wind turbines to meet it.
Mexico launch
In Mexico, state power firm CFE got one of its landmark projects off the ground, launching the tender for a contract to build the 100 MW La Venta 2 power plant in Oaxaca state. Four firms, Vestas, GE Energy, Mitsubishi and Gamesa Eólica, participated in the auction. The result was a major disappointment (page 12).
Iberdrola took a big step into the Mexican market with the purchase of a 98% stake in Parques Ecologicos de Mexico, which is developing a 102 MW power plant, also in Oaxaca. Iberdrola paid a reported EUR 500,000 ($638,000) to acquire the stake, which the firm said is part of its aggressive plan to expand into wind power.
The North American Development Bank (NADB), meanwhile, started wind monitoring in Tamaulipas state for a 30-40 MW wind project in partnership with the Universidad Autonoma de Tamaulipas. Power generated by the project would be for public sector use, such as street lighting, water pumps and public buildings, putting the project in the self-generation category in Mexican law. NADB also has a monitoring project in neighbouring Nuevo Leon state, where it is working on a 20-30 MW project in Cerralvo municipality. Feasibility studies for both are likely to start this year.
Progress in other countries in Latin America was unconvincing. In Argentina, Industrias Metalurgicas Pescarmona (Impsa) ruminated on the possibility of a $380 million wind and hydropower project in Santa Cruz province. Impsa is only willing to put up $100 million and wants the local government to put up the remaining $280 million. Greenpeace unveiled a plan to build 3000 MW of wind power by 2013, but it, too, wants the public sector to lead the way. The government currently has its mind on other things, however, such as trying to persuade international creditors to take a 75% hit on the $80 billion of debt on which the country defaulted in 2002.
Projects in Chile and Uruguay were taken out of their cupboards and dusted off during 2004, including a wind-diesel project for Robinson Crusoe island off Chile's Pacific Coast and a 100 MW wind plant in Uruguay to complement -- and offset -- the existing reliance on hydropower. No concrete decisions were taken on either projects. It is also safe to say that neither has wind power moved up the order of priorities for most other Latin American nations.
.png)
.png)
