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Winds of change to the Brazilian energy industry offshore

6 / 05 / 2019

Source: NordicLight Magazine

Check out the full magazine: http://nbcc.com.br/wp-content/uploads/2019/05/Nordic-Light-Mai2019-Jul2019.pdf 

This article was written by: David Meiler (Partner), Fabiano Gallo (Partner), Bárbara Bittencourt (associate) and Flavia Cerutti (associate).

As the population grows and technology develops, the need for different sources of energy consequently increases. Fossil fuels, mainly oil, gas and coal, still represent more than 90% of the global energy.

However, worldwide discussions on climate change, corporate investors’ demands for a cleaner energy and governments’ commitment with lower carbon emissions have advocated for the immediate implementation of renewable energy projects.

Under Brazil’s perspective, although the country already has one of the cleanest energy matrices in the world, there is still a promising space for the development of different markets and technologies related to renewable energy.

In this regard, offshore wind farms appear as a good alternative to Brazil, mainly due to the great potential of winds and huge offshore areas within the Brazilian jurisdictional waters.

Aligned with the benefits of a clean energy pattern, offshore wind farms are seen not only as a means for profiting, but also as a solution for decommissioning issues faced on mature provinces – where fixed oil and gas infrastructure is being modified and turned into wind farm projects. Further, offshore wind farms have appeared as an energy solution for oil and gas infrastructures currently used by producing countries – i.e. wind farms are being used to supply power for drilling platforms and oil and gas production vessels.

Accordingly, the Brazilian energy industry already envisages the benefits of offshore wind farms. Major oil companies operating in Brazil – such as Petrobras and Equinor – have already made public their interest in implementing this kind of technology, aiming to compensate carbon emissions and comply with the Paris Agreement on climate changes.

In view of the industry’s interest to develop additional clean energy projects, Brazilian regulators and legislators are currently working on an agenda which comprises changes in the existing legal framework and/ or the creation of new rules to regulate the activities and promote the development of offshore wind farms.

The Brazilian Congress has issued the Bill of Law No. 11,247/18, which aims to expand the authority of different governmental bodies of the energy sector (such as ANEEL and EPE) for purposes of enabling energy projects to be developed within the Brazilian territorial sea (up to 22 km from the coastline) and the exclusive economic zone (up to 370 km from the coastline). Such new law intends to regulate the process for granting concessions and authorizations for the installation of offshore wind farms. The Bill of Law has been approved by the Brazilian Senate and shall now be analyzed and voted by the House of Representatives.

From an environmental standpoint, certain regulations are being planned by the Brazilian Environmental Institute (IBAMA) in regard to offshore wind farm projects. We highlight a new resolution on environmental licensing procedures, to be submitted to public consultation and expected to be implemented in the year 2020.

In light of the above, once the expected regulatory framework for offshore wind farms is in place, properly addressing the industry’s concerns and removing uncertainties for investors, Brazil will be well positioned and in the right track for a sustainable development of its offshore wind energy potential. 44 MAY – JULY 2019 Winds of change to the Brazilian Energy Industry offshore

As the population grows and technology develops, the need for different sources of energy consequently increases. Fossil fuels, mainly oil, gas and coal, still represent more than 90% of the global energy.

However, worldwide discussions on climate change, corporate investors’ demands for a cleaner energy and governments’ commitment with lower carbon emissions have advocated for the immediate implementation of renewable energy projects.

Under Brazil’s perspective, although the country already has one of the cleanest energy matrices in the world, there is still a promising space for the development of different markets and technologies related to renewable energy.

In this regard, offshore wind farms appear as a good alternative to Brazil, mainly due to the great potential of winds and huge offshore areas within the Brazilian jurisdictional waters.

Aligned with the benefits of a clean energy pattern, offshore wind farms are seen not only as a means for profiting, but also as a solution for decommissioning issues faced on mature provinces – where fixed oil and gas infrastructure is being modified and turned into wind farm projects. Further, offshore wind farms have appeared as an energy solution for oil and gas infrastructures currently used by producing countries – i.e. wind farms are being used to supply power for drilling platforms and oil and gas production vessels.

Accordingly, the Brazilian energy industry already envisages the benefits of offshore wind farms. Major oil companies operating in Brazil – such as Petrobras and Equinor – have already made public their interest in implementing this kind of technology, aiming to compensate carbon emissions and comply with the Paris Agreement on climate changes.

In view of the industry’s interest to develop additional clean energy projects, Brazilian regulators and legislators are currently working on an agenda which comprises changes in the existing legal framework and/ or the creation of new rules to regulate the activities and promote the development of offshore wind farms.

The Brazilian Congress has issued the Bill of Law No. 11,247/18, which aims to expand the authority of different governmental bodies of the energy sector (such as ANEEL and EPE) for purposes of enabling energy projects to be developed within the Brazilian territorial sea (up to 22 km from the coastline) and the exclusive economic zone (up to 370 km from the coastline). Such new law intends to regulate the process for granting concessions and authorizations for the installation of offshore wind farms. The Bill of Law has been approved by the Brazilian Senate and shall now be analyzed and voted by the House of Representatives.

From an environmental standpoint, certain regulations are being planned by the Brazilian Environmental Institute (IBAMA) in regard to offshore wind farm projects. We highlight a new resolution on environmental licensing procedures, to be submitted to public consultation and expected to be implemented in the year 2020.

In light of the above, once the expected regulatory framework for offshore wind farms is in place, properly addressing the industry’s concerns and removing uncertainties for investors, Brazil will be well positioned and in the right track for a sustainable development of its offshore wind energy potential. 44 MAY – JULY 2019 Winds of change to the Brazilian Energy Industry offshore.

 

About the NordicLight Magazine:

The Magazine is a quarterly joint publication of the Swedish-Brazilian Chamber of Commerce (SBCC) and The Norwegian-Brazilian Chamber of Commerce (NBCC).

The Chamber’s magazine NordicLight is published quarterly over three continents and circulates to all members and to business people and other opinion formers with particular interest in Sweden and Brazil.