Historically, developed nations in Europe have dominated the activity in the offshore wind sector. However, as the technology matured and costs fell, emerging economies in Europe, Asia, the US, and even Australia saw an increase in strategic JVs and project partnerships. Brazil is the only Latin American country with an offshore wind investment interest. According to EPE, with 7,367 kilometres of shoreline and 3.5 million sq km of maritime space, the country could host 700 GW of offshore wind projects in shallow water. Recent regulatory reforms by the country's government to encourage offshore wind construction have attracted oil majors Equinor and Shell, European utilities EDP Renewables (EDPR) and ENGIE, and private equity firms Green Investment Group (GIG) and Copenhagen Infrastructure Partners (CIP). Equinor and Petrobras are investigating a 4 GW project in the Campos basin, a major oil and gas province. Equinor has also requested environmental reviews for six projects in four Brazilian states, totaling 14.37 GW. Meanwhile, Shell has applied for licences to build six projects with a total capacity of 17 GW. Further, in June '22, GIG portfolio company Corio Generation teamed up with Servtec to build 5 GW of projects off Brazil's coast, while EDPR-ENGIE JV Ocean Winds created its OW Brasil unit to target projects in 4 states on the country's northeastern and eastern shores.
Recent growth in Brazil's offshore wind sector is due to a Jan '22 regulation that provides investors with clarity on the assignment of physical locations for offshore wind power. The Decree stipulates that Brazil's Ministry of Mines and Energy select offshore wind zones and organise auctions. A drought in 2021 affected Brazil's hydropower-based energy mix, prompting these latest developments. In 2020, hydropower accounted for 66% of the domestic energy matrix. Going forward, Enerdatics expects Brazil’s offshore wind sector to be dominated by companies that will build on their legacy energy operations in the country. O&G majors, in particular, would be able to leverage their experience operating oil and gas installations offshore Brazil, and will seek to partner with local developers and technology services providers to buildout their portfolio. Meanwhile, private equity firms that seek to acquire direct stakes in assets, such as GIG and CIP, will lead the pack of institutional investors establishing a footprint in Brazil’s offshore wind space, with other firms following suit as the market matures.