World Wind Energy Conference 2003 - WWEC 2003
Call for Papers
Applicable Subject Number: 5 (5.3)
Full Title of Paper: Emission Credits and The Wind Energy Development in Brazil
Full contact details of the author: Andre Leal de Sa
Ecoinvest Assessoria Ltda.
Rua da Assembleia, 10/1202, Centro, RJ
RJ - Brazil - 20011-901
tel: +55-21-2221-4810 / fax: +55-21-3852-5286
Objectives of the work: The objective of the work concerns the question of, generically: dissemination of
wind energy projects and the Renewable Energy Certificates (REC) implementation in Brazil; and
specifically: utilization of the REC as a financial tool for wind energy projects under development in Brazil.
The objective would be to analyze the feasibility of using the REC flexibility mechanism as a financing and
development tool for the growth of wind energy projects in Brazil, providing significant benefits to the
country and an important instrument for GHG emission reduction by countries with ER commitments.
Approach: The projects I am working with in Brazil are intended to install at least 100 MW of new wind
energy capacity within the next 3 years. The projects will be located in different regions of Brazil
(Northeast and Southeast), and are a great opportunity to study the REC process and dynamics in actual
state-of-the-art projects. It is an opportunity to assess some major aspects (the REC financial impact over
the projects, additionality, baseline, verification, etc.) of a technology that could provide more than 3,000
MW of clean energy to Brazil and such amount of CER to the Annex I countries (with ER commitments).
Scientific innovation and relevance: Wind energy in Brazil is hard-pressed to compete with subsidized
fossil fuels, and even more so in the new deregulated energy market. With the energy sector restructuring
in Brazil, the country is moving from a centrally planned state-owned and regulated structure to a market-
based structure. The recent law (10.438) which introduces a wind energy Portfolio Standard (PS) system
is a very positive action, but its actual impact is still to be measured. With the introduction of the spot
market, the trend is towards an increase in natural gas based thermal power generation. The expectation
is that Brazil will move from deriving 8% of its total current energy from natural gas to 17% in 10 years. At
the moment, Brazil is not a great GHG emitter when compared to many other countries. The country
hydro energy based system and the alcohol fuel program are some of the reasons. But another reason is
always forgotten: the country historic low energy consumption. As the country grows, and given the
general trend of moving to a thermal spot market, the emissions will grow steeply, with a projected CO2
emission increase of about 40% if all the proposed thermal plants are constructed.
Results and conclusions: The results indicate that the REC would play a small role on the feasibility of a
given wind energy project, responsible for up to 300 base points on the project IRR, depending on the
assumptions and scenarios considered. This is a direct consequence of the Brazilian large-scale
renewable energy matrix. But if some proactive policies are taken, with the development of the REC
market and with the increase of the Carbon content of the Brazilian energy matrix, the financial impact of
the REC is expected to be higher. Wind will need all the creative financing it can get, be it multilateral or
carbon-linked. However, it is considered one of the cheapest of the renewable sources in Brazil, and is
predicted by some to be the cheapest of all power sources within five to ten years.
3/94 - 12/97 Energy Planning Program (PPE)
Engineering Post-Graduation Programs Coordination (COPPE)
Universidade Federal do Rio de Janeiro (UFRJ)
Master’s Degree (MSc) in Energy Planning
3/88 - 9/92 Universidade Federal Fluminense (UFF)
Economics graduate studies
- “The Embodiment of Carbon Associated with Brazilian Imports and Exports”, Energy Conversion
Management, vol. 37, numbers 6-8, 1996;
- “Wind Energy and National Electric Sector Expansion”, Gazeta Mercantil Newspaper, January, 27 1999
- “The Wind Energy Potential”, Gazeta Mercantil Newspaper, July, 27 1999 Edition
Participation in various Seminars as Speaker:
- 1 Regional Seminar on Health and Environment: Wind Energy in Brazil, Energy and its Environmental
Impacts - Wind, August, 2001, São Mateus, ES (Organization: Ministry of Health).
- MBA in Energy Management FGV-EPGE University, Energy Sources and the Energy Policy – Wind
Energy, July, 2001 (Organization: FGV-EPGE).
- The IHDP/START International Human Dimensions Workshop 2000 in Bonn, Germany, September 10-
19, 2000, CDM and Wind Energy Projects in Brazil – Group I: Industrial Transformation, Cities and
Coastal Zones (Organization: IHDP/START).
- United Nations Conference of the Parties - 05 (COP-05) in Bonn, Germany, October 29, 1999, Latin
America Business Council for Sustainable Development - Importance, Benefits and Process
(Organization: IIEC and BCSE).
- 1 Brazil-Germany Congress on Renewable Energy and Water Resource, SeaWest Commercial View
(Organization: Brazil-Germany Commercial and Industrial Chamber in São Paulo and Minister of Science
and Technology, Fortaleza, September 28-October 2, 1999).
- Brazil Energy Roundtable ’99, Wind Energy and Expansion of the National Electric Sector: New
Perspectives Created by the VN Resolution and the CDM (Organization: Institute of the Americas, Rio de
Janeiro, September 27-28, 1999).
10/00 - to present - SeaWest do Brasil PROJECT MANAGER
The company has bought Ecologica’s office and incorporated SeaWest do Brasil activities. Most of the
work for developing wind energy projects in Brazil have been continued. The responsibilities have
increased and the scope of work has concentrated in the wind business. My responsibilities cover the
entire project development, management and feasibility analysis: legal and financial analysis,
environmental assessment and climate change issues, budget structuring and follow-up, project
management. Also in charge to run the office.
11/96 – 10/00 - Ecológica International TECHNICAL ANALYST
Principal consultant in company specialized in renewable energy projects, such as wind energy, biomass,
landfill gas-to-energy and waste recycling. Ecológica represented SeaWest Winpower Inc., an American
wind energy developer. In the past Ecológica represented Enron Wind Corp., a wind energy subsidiary of
Enron Corp., in Brazil. For biomass and waste management (recycling and landfill) projects, the company
had partnerships with other American and Canadian companies, such as CommonWealth and Royal
Recycling. Ecológica was also active in the consolidation of the new energy model in Brazil, as a
proponent of incentives for renewable energy sources. I have been involved in numerous areas of project
development including evaluation of potential clients, resource availability research, equipment sourcing
and economic/financing modeling. I have worked closely with Brazilian and foreigners utilities, industries,
governmental agencies and financial and research institutions. I was in charge of analyzing the use of
emission reduction certificates, idealized by the Kyoto Protocol, for the development of wind energy
projects and other climate change issues. Because of these activities, I was invited to structure and
represent the Latin America Business Council for Sustainable Energy (LABCSE) in Brazil, which was
planned to be a NGO dedicated to the renewable energy advocating in the LA region.