Renewable Challenges: Brazil's Struggles with Wind and Solar Energy

Brazil's wind and solar energy producers are reconsidering future investments due to the national grid operator's policy of capping energy deliveries, which has affected their profits. Despite incentives for renewable energy, transmission bottlenecks and curtailments have caused significant financial losses, leading to legal battles and concerns about the sector's future viability.

Brazil's wind and solar energy producers are reconsidering their future investments due to the national grid operator's repeated capping of energy deliveries, impacting their profits.

Brazil has made significant progress in encouraging renewable energy investments through generous financing and subsidies. However, transmission bottlenecks and the National Electric System Operator's (ONS) curtailments policy have made these investments less viable. Executives and industry representatives report losses totaling hundreds of millions of reais, citing curtailments that temporarily limit power acceptance from renewable plants.

The northeastern region, a hub for renewable energy, faces severe transmission constraints, especially after a significant power outage in August 2023. Some companies are pursuing legal actions, while others see higher investment risks and potential increased energy costs. Despite auctioning new transmission line projects, many are still years from completion. Relief may come in September with a new operational transmission line set to improve grid capacity.

(With inputs from agencies.)