BMI View : Although the economic recession continues to affect the Brazilian non-hydroelectric renewable market in 2016 as the currency devaluation threatens multiple solar projects, reaffirmed government support and a return to positive growth in 2017 provide some upside to our outlook. The re-scheduling of the two reserve auctions to September and December in hope for an improved investment this year could reinforce the already strong project pipeline, whose major obstacles remain to be financial, as well as relate to an insufficient production chain in light of local content requirements. We currently see non-hydro capacity to grow by 9.5% in 2016, and 4.2% by 2017.
|e/f = BMI estimate/forecast. Source: EIA, national sources, BMI|
|Generation, Non-Hydropower Renewables, TWh||57.110||66.630||71.710||79.420||85.190||90.310||95.100|
|Generation, Non-Hydropower Renewables, % y-o-y||9.450||16.670||7.630||10.760||7.260||6.010||5.300|
|Capacity, Non-Hydroelectric Renewables, MW||19,887.2||22,023.5||24,120.5||27,175.0||29,462.8||30,832.0||32,325.6|
|Capacity, Non-Hydroelectric Renewables, % y-o-y||18.6||10.7||9.5||12.7||8.4||4.7||4.8|
Latest Updates And Structural Trends
For 2016, we expect overall non-hydro renewables to see a year-on-year capacity and generation growth of 10.7% and 16.7%, respectively. While capacity growth is significantly below 2015-levels, generation is increasing from last year's strong growth and the slump in domestic energy consumption levels as the wider economic downturn continues. For 2017, capacity and generation growth are forecast to fall to 9.5% and 7.6%, respectively.
Due to the political turmoil and economic uncertainty surrounding the impeachment of President Rousseff, auctions have been rescheduled. The first reserve energy auction, originally scheduled for late July, has been postponed until September 23. The second reserve auction initially planned for October 28 has been rescheduled to December 16. Also, the most recent power transmission auction, originally scheduled for September 2, 2016, has been postponed; the government had expected to attract investments of up to BRL12.6bn (USD4bn), but the Energy Ministry decided to review the terms of the auction to ensure interest from investors.
Wind capacity forecasts for 2016 and 2017 have been readjusted to include more projects entering the market by the end of 2016, rather than 2017. Solar capacity growth remains at an unchanged, lower level, due to currency pressures and delayed auctions.
During the A-5 auctions of April 2016, around 198MW of biomass, almost 263MW of small hydro and 62MW of regular hydro projects were contracted - with no wind project receiving supply contracts. The auction for solar power is scheduled for July, with projects worth 9.2GW having been registered. The next auction for wind power is scheduled for October, with another A-3 and reserve auction that would include wind power currently being considered by the government to take place before end-2016 as well.
The Brazil Renewables Report researched at source contains BMI Research's assessment of the current renewables market in Brazil. The report also contains historical data together with forecasts to end-2018 covering electricity generation (TWh) and electricity capacity (MW).
The renewables sectors covered in the report include Wind, Solar, Geothermal, Tidal and Wave, and Biomass (See Table of Contents for exact coverage). The report also features details on government green energy agendas and funding opportunities, as well as presenting a detailed list of key renewables projects currently being planned or undertaken in Brazil, their capacity, the timeframe of construction and their current status.
The report discusses the various energy policies currently in force, including targets, subsidies and the relevant infrastructure developments or limitations which might impact on renewables growth, analysing the potential effects of regulatory changes in conjunction with the background macroeconomic outlook. Finally, there is a general overview of the competitive landscape in Brazil, together with a detailed summary of the main utilities and manufacturers present and their business operations.
BMI's Brazil Renewables Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with unique independent forecasts and competitive intelligence on the Brazil renewables industry.
- Benchmark BMI's independent renewables industry forecasts for Brazil to test other views - a key input for successful budgeting and planning in the renewables market.
- Target business opportunities and risks in the Brazil renewables sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in the country.
BMI Industry View
Summary of BMI's key industry forecasts, views and trend analysis covering the renewables market in Brazil, regulatory changes, major investments and projects and significant multinational and national company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the renewables sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2010-2012) and forecasts to end-2018 for electricity generation (TWh) and electricity generating capacity (MW) for each individual renewables sector present in the country.
These in turn are broken down into:
Electricity Generation: Overall capacity (TWh), growth % change year-on-year, KWh per capita, % of Total Non-Hydropower renewables generation, % of total electricity generation.
Electricity Capacity: Overall capacity (MW), growth % change year-on-year, % of non-hydroelectric renewables capacity and % of total capacity.
These forecasts are in turn supported by explicit assumptions, in conjunction with analysis of the key risks to the main forecast.
Business Environment Rankings
BMI's Renewables Business Environment Rankings provide fully comparable Risk-Reward Rankings aimed at investors in the regional renewables market.
The rankings methodology makes sophisticated use of various industry, economic and demographic data point.