Shell gauging offshore wind opportunities in Brazil

Following the news that Shell had launched Shell Energy in Brazil, saying that the business would produce and market clean electricity from solar and wind power plants, Offshore Energy – Offshore Wind contacted the company to find out if offshore wind was part of its wind power plans in the country, given its growing offshore wind portfolio in Europe and Brazil emerging as one of the new offshore wind markets to keep any eye on.

In a press release on the launch of Shell Energy Brasil on 21 September, the company said the country was one of Shell Energy’s strategic markets, following the opening of its business focused on energy transition and decarbonisation in European countries, including Turkey, and more recently in the United States and Australia. 

Opportunities for the oil and gas major’s energy business in Brazil opened up with the New Gas Law and the entry of consumers into the free electricity market, according to Guilherme Perdigão, director of Renewables and Energy Solutions at Shell Brasil and Shell Energy. In addition to electricity contracts, the company has combined packages of electricity and gas, LNG, and carbon offsets, and will provide Renewable Energy Certificates (RECs and I-RECs).

In terms of existing projects in the country, Shell Energy Brasil is part of the joint venture behind the Marlim Azul natural gas-based thermal power plant, currently under construction, and has six solar power projects with a generation capacity of more than 2 GW.

“We are also willing to make new investments in clean energy generation joint ventures”, Guilherme Perdigão said, as the company itself states that it plans to invest BRL 3 billion (around EUR 484 million) in renewable energy and other projects in Brazil until 2025.

As Shell Energy Brasil specified it would produce and market electricity generated by solar power plants and wind farms, Offshore Energy – Offshore Wind contacted the company to see if offshore wind was part of these plans, since Shell has a growing portfolio of existing projects and those under development and in planning, especially in Europe.

According to a statement from the company, Shell is currently assessing potential offshore wind opportunities in Brazil.

“Shell Brasil has a working group currently evaluating opportunities for offshore wind projects in the country, which is still pending on local regulation”, the company said, not revealing further details.

While Shell’s confirmation of investigating the possibilities for developing offshore wind projects in Brazil is undoubtedly interesting news, this is not completely unexpected as it has been somewhat anticipated.

Back in December 2020, a report from Fitch Solutions forecasted both Shell and Repsol to be looking toward offshore wind investments in the country since they are both present in Brazil and are involved in offshore wind projects in other markets.

The report highlighted Brazil as one of the key emerging markets in the Americas region, with over 16 GW of offshore capacity planned as of end-2020 and major oil and gas companies, which are already doing business in the country, entering the offshore wind market.

Brazilian oil and gas major Petrobras has already made a concrete first step in 2018 with the signing of a Memorandum of Understanding (MoU) with Equinor to jointly develop the offshore wind energy segment in Brazil.

Last year, Equinor submitted an application to the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) for an environmental impact assessment needed to further investigate the possibility of developing an offshore wind project in the country.

As of 2020, offshore wind plans in Brazil have been increasingly making headlines with both wind energy technology developers and local governments setting out to tap into the wind resource off the country’s coast.

At the beginning of the last year, SeaTwirl entered into a cooperation with Crest Consultants, aiming to identify specific areas that are suitable for offshore wind power and to develop concept products with Brazilian partners based on SeaTwirl’s technology and Crest’s engineering experience, and to eventually find commercial projects to collaborate on.

Then, the Government of the Brazilian state of Ceará signed an MoU with China’s MingYang Smart Energy in the fall of 2020, with a goal to develop an ”offshore wind complex” in the state.

Shotly after that, MingYang signed a an MoU with Pecém Industrial Complex (CIPP) to develop a pilot offshore wind project in Brazil with a plan to start building what would be Brazil’s first offshore wind project by early 2022.

The parties announced they were starting pre-feasibility studies for the pilot wind farm, which would be located off the coast of Pecém and was part of the plan to develop an offshore wind complex MingYang signed an MoU on with the Government of Ceará.

This year, the Brazilian state of Rio Grande do Norte entered into an agreement with Enterprize Energy to identify and develop opportunities for offshore wind, green hydrogen, and green ammonia projects off the country’s northern coastline.

The agreement will see the company undertaking identification and development of potential multi-gigawatt offshore wind projects, as well as assessments of potential environmental and socio-economic impacts and benefits, alongside the economic viability of co-developed desalination and green hydrogen production hubs for both local distribution and export to global markets.

According to the figures published by RenewableUK on the pipeline of global offshore wind projects in 2020, Brazil took the fourth place with 16.3 GW, with ten offshore wind projects announced since the start of the last year.

The full Brazilian coastline could support as much as 700 GW of offshore wind capacity, according to a report from Energy Research Office (EPE).