Casa dos Ventos, one of the pioneers and largest investors in the development of wind projects in Brazil, announces that it has signed a long-term energy supply contract with Vale S.A for the Folha Larga Sul wind farm, located in Campo Formoso, Bahia. With an installed capacity of 151.2 MW, the project has energy contracted for 23 years, the longest term ever secured by a wind farm in the country. Under the agreement, all investment in the plant – R$ 750 million – is the responsibility of Casa dos Ventos. Commercial operation is scheduled to begin in the first half of 2020.
The contracting model, known as a bilateral PPA (Power Purchase Agreement), allows large energy consumers to negotiate directly with generation companies. The agreement also provides for the possibility of Vale becoming a partner in the project in the future.
"We developed a tailor-made model, in which we are responsible for the construction and operation of the enterprise, with our partner having the possibility, in the future, of becoming a shareholder in the asset, generating their own energy in the self-production modality," explained Lucas Araripe, New Business Director at Casa dos Ventos.
According to Araripe, the approximation between wind generators and large consumers is a global trend, as the source has become one of the cheapest ways to generate energy and meets the growing demand from companies to ensure a sustainable energy supply. "Contracting for longer terms also guarantees predictability, which is interesting in countries like Brazil, where there is high price volatility," he adds.
For the Executive Director of Business Support, Alexandre Pereira, the partnership with Casa dos Ventos is another step in the company's strategy to achieve 100% self-production of clean electricity in Brazil by 2030. "Today, about 60% of all the energy we consume in the country is self-produced, coming from renewable sources," explains Pereira. In Brazil, Vale owns or operates in partnership ten hydroelectric plants and three small hydroelectric plants, in addition to a wind farm in Ceará.
The Folha Larga Sul project will have 36 state-of-the-art turbines from Danish Vestas, the world leader in wind turbine manufacturing. Construction begins in April this year and features one of the first financings contracted with Banco do Nordeste (BNB) for the free market. "Folha Larga Sul is the company's first project with BNB financing, demonstrating the bank's strong support for the sector and the evolution of support conditions for the new commercial reality," said Ivan Hong, Financial Director at Casa dos Ventos.
Renewable PPAs: a global trend
Although still not widespread in Brazil, countries like the United States and several others in Europe have a large number of companies that are gradually acquiring renewable energy for their operations. According to Bloomberg New Energy Finance (BNEF), by September 2018, new bilateral wind and solar PPAs totaled 8.4GW of installed capacity worldwide, representing a 70% increase compared to 2017, when 5.4GW were made viable in this modality. According to the International Renewable Energy Agency (IRENA) report, in 2018, corporate clean energy supply exceeded 465 terawatt-hours (TWh), an amount corresponding to France's total electricity demand. "In the last three years, we have inaugurated five wind complexes aimed at the regulated market, totaling 1.1 GW of installed capacity in an investment program of R$ 6.5 billion. Recently, we have sought to customize solutions and help large companies consume energy as efficiently and sustainably as possible. In addition to the Folha Larga Sul wind farm, we are structuring new partnerships based on our large portfolio of projects in the Northeast of the country," concluded Araripe, reminding that the self-production model also guarantees benefits in charge exemptions.
About Casa dos Ventos
Casa dos Ventos is one of the pioneers and largest investors in the development of wind projects in Brazil. For over ten years in the market, it is responsible for developing the largest number of projects that have commercialized energy in regulated auctions and in the free contracting environment in the country. In addition to having developed approximately 30% of all projects under implementation or operation in the country, the company holds the largest portfolio of wind projects in Brazil. The company's wind projects are located in Ceará, Rio Grande do Norte, Pernambuco, Paraíba, Bahia, and Piauí.
