Brazilian wind power cheaper than natural gas
"The Brazilian authorities have this week confirmed that wind power in the country currently costs less than natural gas, after a series of energy auctions saw wind farm operators undercut other forms of energy generation.
Seventy-eight wind power projects won contracts in last week's energy auctions held by Brazil's National Electric Power Agency, totalling 1,928MW and priced at approximately 99.5 reals (£37.4) per MWh.
By comparison, the average price for power generated with natural gas is currently 103 reals (£38.7) per MWh in Brazil, while the average price for energy determined through the auctions was 102.07 reals per MWh.
According to Brazil's Energy Research Company (EPE), wind power is also now trading around 19 per cent cheaper per MWh than the average price in Brazil last year, suggesting the price of the technology is becoming a more competitive.
EPE president and chief executive Mauricio Tolmasquim said the auctions show that wind and natural gas are competitive, predicting wind prices will continue to fall in Brazil.
"That wind power plants have been contracted at two digit prices, below 100 reals per MWh, showcases the energy market competition through auctions," he said. "That wind power could reach these lows versus natural gas was unimaginable until recently."
The energy auctions for a total of 92 projects were the first in Brazil for 2011, and also featured biomass, hydro-electric and natural gas projects.
Investments amounted to 11.2bn reals in total, for 3,962MW of energy that is slated to start generating in 2014.
EPE has predicted that Brazil's windpower potential of 143GW could rise to 300GW with the use of better turbine technology. However, it also expects Brazil's total power consumption to rise 60 per cent between 2010 and 2020, reflecting the country's rapid economic growth and expanding middle class.
But despite the positive outlook for wind, underpinned by tax breaks and strong wind resources, some analysts have expressed doubts that the sector can meet the government's targets.
Adriano Pires, an energy expert with the Brazilian Centre for Infrastructure, told Reuters that a 2004 scheme which offered to buy wind power at higher rates than other types of generation might have spurred a naive optimism for the sector.
"Brazil has a history of euphoria when it comes to power generation," he said. "Right now wind power is the darling of the government, but that doesn't mean it's going to be sustainable in the long run."
The migration to renewable energy will happen, without lots of outside influences, when the prices are competitive with other forms of production. If Brazil can maintain those pricing levels on wind, they will be on their way to sustainable energy.
Keep in mind that Brazil is one of the BRIC countries, so they have lots of growth to power.
What country is next?