The Brazilian Senate has adopted a bill regulating offshore wind licensing, development and operation. The bill also includes subsidies for coal and natural gas power plants, provisions that President Luiz Inácio Lula da Silva is expected to veto.
The bill (PL 576/2021) was first introduced in 2021 with a focus on offshore wind and other offshore renewable energy sources and establishes an approach to identifying and allocating offshore wind development areas, as well as the licensing processes, and mandates lease payments to the State.
The regulation will apply to all projects located off the Brazilian coast, including territorial waters, the continental shelf and the Exclusive Economic Zone (EEZ).
According to the incoming law, offshore wind development rights may be granted through authorisation or concession.
Through the authorisation process, the government identifies areas based on the request of an interested party and organises a public call. In the concession process, the government defines the areas identified by a relevant governmental agency and puts them up for bidding through a public tender.
During its time in the Chamber of Deputies, the lower house of Brazil’s Congress, the bill was amended to also contain provisions for fossil fuel subsidies, including coal and natural gas, which triggered debates in the Senate.
According to Senator Eduardo Girão, the changes made by the Chamber could cause an average increase of 7.5 per cent in Brazilians’ energy bills.
Senator Randolfe Rodrigues said the proposed bill was “completely distorted in the Chamber” with the inclusion of themes that are not related to the original subject of the bill. Rodrigues also announced that President Luiz Inácio Lula da Silva will veto the provisions related to fossil fuels in this bill.
On the other hand, proponents of the amendments to support coal and gas power plants emphasised the importance of energy security and economic stability in regions like southern Brazil, where coal plays a significant role. Senator Rogério Marinho said the energy matrix needs to be secure and this could only be achieved by building more gas-fired thermal plants and preserving coal-fired thermal plants.
According to a study conducted by DNV and released this summer by the World Bank Group, Brazil holds a technical offshore wind potential of over 1,200 GW and could install at least 16 GW, and as much as 96 GW, of offshore wind capacity by 2050 with offshore wind strategy and policies, permitting regulations, grid and port upgrades in place.
The country’s Institute for the Environment and Natural Resources (IBAMA) has been processing applications for environmental investigation licences for offshore wind projects since 2019 and has so far received applications for 103 proposed projects.
Commenting on the Senate’s passage of the bill, Ben Backwell , CEO of the Global Wind Energy Council (GWEC), said: “There are already around 100 applications for offshore wind projects in Brazil, which represents more than 230 GW of new, clean renewable power. Those projects demonstrate the scale of this bill for Brazil – it unlocks new jobs, rejuvenated industry and a renewed economy.”
“The development of offshore wind will help Brazil reinforce its leadership in the energy transition. Access to cheap and abundant green electrons will put Brazil in pole position to produce green products through electrification and green hydrogen, and play an important role in the global wind supply chain.”
In 2023, Brazil’s Ministry of Mining and Energy and Energy Research Office (EPE) published a new version of the country’s offshore wind roadmap following updates to the regulatory framework for energy generation in Brazil’s law on regularisation, administration, leasing and disposal of areas ( Law No. 9.636/1998 ).
NOTE: The article was updated on 16 December with information on the two types of awarding development rights as prescribed by the bill.