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BNamericas – Why Colombia and Brazil are the main…

Why Colombia and Brazil are LatAm's top offshore wind markets

The offshore wind industry in Latin America is attracting interest from various developers due to the possibility of building large-scale projects with potential synergies with other industries, such as green hydrogen.

In the region, Brazil and Colombia are the countries that have made the most progress, although Chile and Uruguay are also interested. Other countries, such as Argentina, have great potential which could be attractive in the future.

BNamericas spoke with Sergi Ametller, director of offshore wind at Spanish technology and engineering group Sener, and Marta González, head of wind technology and marine energy at the same company, about the prospects for offshore wind energy in Latin America.

Numerical: Why did Sener decide to explore offshore wind projects in this region?

almond: We are a company with a technological vision, our DNA is to develop cutting-edge innovative technology. Offshore wind power is a difficult discipline. It requires very broad knowledge and complex local studies, which take into account many parameters. Few companies have all the capabilities needed to tackle these projects.

From our point of view, this is a sector in which we have decided to be and in which we invest a lot of effort. And we are doing very well. We have several business units that apply to this type of project. The first is engineering, where we help design different projects for different clients. We also do implementation work in any region of the world, and in Latin America we are working on that; the promoters ask us for help in the start-up phase of the works, in the processing of the authorizations necessary to launch these projects.

We also provide construction support, currently mainly in Europe, which is a mature market for offshore wind, and there our teams support clients on the execution side. We also have our own product lines, including patents and in-house developments for float and substation technologies, which we offer to the market. Sener also invests in specific projects and works in partnership with other investment companies.

As for South America, we are in Brazil, initially analyzing the optimal areas and projects for this market. We are also in Colombia, where we are exploring specific projects.

Numerical: What are the main jurisdictions that are generating interest in the region?

Gonzalez: Between Colombia and Brazil, I would say Colombia is winning the race so far. It has published zones, it has published a key decree to manage water concessions, it deals with certain project permits, and for these reasons it is a little ahead of Brazil in terms of regulations, and we will see if this trend continues.

We did an analysis of other countries at the wind resource level, but not in depth in the regulatory framework. I would be surprised if another South American country would advance more on this issue. In the world in general, the regulatory framework is still being defined in many countries.

almond: I agree that Brazil and Colombia are the countries that we consider to be the most advanced. Perhaps Colombia will be the first to build an offshore wind installation. We are also seeing more and more interest in Chile, we are receiving requests on this subject, and in Uruguay, which is considering taking advantage of its offshore wind resource [with a series of tenders next year].

Additionally, in the Caribbean and Central America, we receive occasional requests for smaller projects. But at the level of major strategic projects, Colombia and Brazil are currently the main players in this sector.

Some of these projects are related to the production of electricity, taking advantage of the excellent wind resource and injecting energy into the grid. We are also seeing that in some regions developers are considering hydrogen projects, i.e. disconnecting the wind farm from the grid and using it as an energy source to produce green hydrogen for export or internal use.

We are seeing more and more interest in the export option. Our customers also tell us that onshore wind is increasingly challenging in the region in terms of permits and environmental concerns, and they see that offshore wind can facilitate these areas, simplifying the permitting aspect.

Gonzalez: It’s a combination of factors. Where is the resource, where are the centers of population and demand, etc.? This is part of the problem that green hydrogen solves.

On the other hand, it depends on the availability of potential onshore wind projects, which are cheaper. For example, in Brazil, there is still a lot of availability for this type of project. Therefore, regulations and tax rules become important and I think they will set the tone. Countries will promote the development of hydrogen when it is coupled with offshore wind power, for example. Each country will have to look at its own considerations, and this will show us whether offshore wind in a certain region makes sense on its own or in conjunction with other technologies, such as hydrogen.

almond: I would add decarbonization. In many parts of the world, one of the main driving forces is to seek the decarbonisation of electricity production, in order to be less dependent on gas and oil. It is a very important factor.

Demand depends on country and region. There are areas of Brazil where energy forecasts show next generation needs, and there are sparsely populated areas where this offshore wind energy will go to hydrogen for export.

Competition is important. In countries with large areas of onshore wind power available in the short term, we believe they will continue to use onshore wind power due to falling costs.

Numerical: What’s going on in Mexico? Does it have potential?

Gonzalez: It is not known to be the country with the best wind resource in general, although there are specific areas that have good resources.

almond: Today there is not much activity. The resource is more important elsewhere in America. In Mexico, onshore wind energy production is growing and, at least in the medium term, we do not see Mexico turning significantly to the sea for wind energy. We think it will come later.

Numerical: What other logistical developments are needed for this industry to take off locally?

almond: Port infrastructure is an important driver. To carry out large offshore wind projects, you need a large, deep logistics base to carry out these construction and supply operations for everything that the offshore wind project requires. For example, in the United States, this leads to major port investments, both on the east coast and on the west coast. In South America, we don’t see it yet. This will become a necessity, and this could constitute a limit for the implementation of these projects. If there is no logistical support from the ports, it is very difficult for these projects to materialize.

At the technological level, there will be turbine the offer, which will grow. At present, most projects are planned with 15 MW or 16 MW turbines, but soon we will start preparing them with 20 MW. Regarding floating and fixed foundations, the technology will be there, but we will need manufacturing. Shipyards, workshops, ports are going to be needed, and this may require longer term planning and effort.

It is more complex to develop this production capacity than to respect the rest of the parameters. This factor could slow down the first developments. We hope that in the short term we will see the industry respond and that these pain points will be resolved as the market prepares for implementation.

Numerical: You mentioned the development of hydrogen projects in connection with offshore wind power. What do offshore developments offer compared to other technological alternatives?

almond: Offshore wind gives you energy at a reasonable cost and with many hours of production per year. You can get 5,000 to 5,500 hours in good areas, which helps ensure the chlorinator is working at high capacity.

If you depend only on photovoltaic sources, your energy will be limited to the time of day. Moreover, you can generate large power at sea with large capacity projects and install 2 GW or 3 GW without taking up much space.

On land, large capacity projects are not always easy, due to the impact on the environment, communities, etc. Regarding hydrogen, we will see technological hybrids in the medium term that seek to optimize the characteristics of each area.

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