Finpro presentation material in Wind Power Opportunities in Latin America seminar, Vaasa 14.02.2013

1. Opportunities in Wind Power
Technology value chain in Brazil
Seminar with Merinova
February 14th 2013
Matti Landin,
Finpro Brazil

2. 1. INTRODUCTION -
Primary Energy Sources in Brazil
2012 Other
2021
renewables
4%
Other Sugarcane
renewables 17 %
4%
Wood and
Derivatives
Sugarcane Petroleum 5% Petroleum
17 % and and
Derivatives Derivatives
Wood and Hydro
43 % 50 %
Derivatives 9%
10 %
Hydro Uranium
14 % 1% Natural Gas
Coal and Natural Coal and 12 %
Uranium Derivatives Gas Derivatives
2% 1% 9% 2%
Total: 257 106 toe Total: 565 106 toe
Apr 45 % of total energy matrix are renewables y2012
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3. Introduction
Electricity
• Share of renewable resources in electricity production will continue to increase in the next 10 years
according to the Ministry of Mines and Energy.
180 000
160 000
140 000
120 000
100 000
MW
80 000
60 000
40 000
20 000
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Renewable Non-renewable
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4. Introduction
Electricity Production by Source
• Hydroelectric power will continue to strong in terms of production capacity, but wind power is
presenting the largest relative growth.
140
120
100
80
2012
GW
2015
60 2021
40
20
0
Combustion* Hydroelectric Biomass Nuclear Wind Power
*Includes diesel oil, residual oil, natural gas and process gas being burned
to produce electricity.
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5. Wind Energy
Targets: Energy Auctions
• Wind energy is the fastest growing
9000
energy production form in Brazil. Capacity Constructed by Auction (MW)
Already 8 GW has been contracted. 8000
8046,5
• The licenses for wind farms are
7000
granted in government held auctions. 7070 7070
• Currently wind energy license 6000
auctions are held every year and will
5000
continue to be held for the next 8-10 5142
years. 4000
• The contract auction system offers
3000
long term contracts, which eases 3094
project financing. 2000
• 3-year construction period between
1288 1000
auction date and energy delivery 1013
date. 385
573
0
208 218
• Selection by lowest price: 2009 apr 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
300 RS/MWh, 2011, 120 RS/MWh, Proinfra 2° LER (A-3 2009) 2° LFA (A-3 2010)
2012 under 100 RS/MWh 3° LER (A-3 2010) 12° LEN (A-3 2011) 4° LER (A-3 2011)
12° LEN (A-5 2011)
Source: BNDES
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6. Wind Energy
Introduction (2)
• In 2011 the Brazilian Development Bank (BNDES) financed wind energy with
3.4 billion reals, noting an increase of 173% from 2010. The bank estimates an
increase of funding between 20-25% for the year 2012 making the funding
between 4 and 4.25 billion reals ie over 2 USD Billion/y.
• The investment price per megawatt has significantly decreased in the past
years due to competition and increasing local component production
capacity.
• The BNDES provides loans for wind power development and the loan conditions
have strong incentives to support local production.
• Recently funding to certain projects developed by Siemens, Fuhrlander, Vestas,
Suzlon and Acciona have been frozen due to the local manufacturing requirements
not having been met by the companies in an inspection by the BNDES.
• BNDES issued new rules to local content 60% (-70%) to be impmented
gradually until 1.1.2016.
1 BRL = 0.38 euros (Oct/2012)
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7. Wind Energy
Operators: Capacity Under Construction and Licensed
Petrobras
Enerfin
Energisa
Ventos Brasil
Eletrosul
Brennand Energia/CHESF
MPX Energia
Tracktebel
IMPSA
ContourGlobal
Serveng
Galvão
Gestamp
Dobrevê Energia
Neoenergia
SIIF
Enel
Energio
Bioenergy
CPFL
Renova
0 100 200 300 400 500 600
Under Construction (MW) Licensed (MW)
Source: ANEELCurrent production
(09/2012), Energy operators
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8. Wind Energy
Capacity by Locations
In operation
Under construction
Licensed
Source: BNDES 12/2011
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9. Wind Energy
Manufacturers
• Wobben, IMPSA, Alstom, Gamesa and Vestas
have production in Brazil
Other Siemen Acciona Sinovel • (Fuhrlander) and GE are constructing factories
4% s 2% 1% in Brazil. Several operators are planning
2% Alstom factories to Brazil.
5%
Suzlon Games • Wobben and Tecsis produce currently blades in
16 % a Brazil, while Eólice/LM and Aeris are opening
6% factories.
• Towers have several producers, with 3 major
IMPSA ones: Gestamp, Engebasa and Tecnomaq
16 % GE
16 % Wind Turbine Production Capcity (MW)
5000
Fuhrlander
Vestas
4000 Suzlon
12 % Wobbe
n 3000 Alstom
20 % 2000 GE
Vestas
1000
Gamesa
0 Weg/MTOI
2007 2008 2009 2010 2011 2012 2013
Source: BNDES / EPE
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10. Wind Energy
Manufacturers: Plants in Operation and in Construction as of 2011
Source: ABEEólica, Brasil Energia

11. Wind Energy
Nacelle Manufacturs
Source: ABDI

12. BNDES launched Dec 2012 new local
content requirements 60-70 % - Nacelle
Example
Table 2 BNDES , Phase 5 and 6 of Nacelle assembly and sourcing in Brazil;
• Starting 1.1.2015 -1.1.2016 Six components from frazil, at least 3 from col. B
• Starting 1.1.2016 – sourcing of 12 components at least one column A and 5
column B Source: ABDI
A B C
Nacelle Structure – Nacelle Cooling System Break system
casting and welding Elevator Rotor lock system
Estructural Main Axis Coupling
elements – Rotor Electrical protection panel Medium tension cables
Estructural Careen (carenagem) Hydraulic unit
elements – Stator Yaw bearing Slip ring
Inverter Main axes bearings Pulley
Transformers Structural bolts
Yaw drives External light signals
Yaw brake Anemometer (wind-gage)
Wind direction sensor
Source: BNDES

13. Wind Energy
Blade Manufacturs
Source: ABDI

14. Wind Energy
Tower Manufacturs
Source: ABDI

15. Wind Energy
Co-operation Possibilities
Key Commercial opportunities
• Sales of competitive key components to the wind mill OEMs manufacturing
in Brazil
• BNDES who finances over 90 % of the projects, has set tighter national content
rules starting to be implemented stepwise 2013-2016. In 2016 the national content
requirement will be apr 60-70 %.
• At the same time rules permit purchasing 30-40 % of imported components in
order to promote competition and development of quality among local
manufacturers.
• Companies who could have competitive scale of production in Brazil can
analyze production in Brazil. Overall cost level in manufacturing is not low in
Brazil.
• Competitive maintenance or service providers can also find attractive market
opportunities
• Industry association of operators and OEMs Abeeolica organizes supply chain
event in May 2013 in Sao Paulo
• Might be possible to organize delegation from Brazil to Finland get to know Finnish
technology, references etc might be joint with Bioenergy. .
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