financing renewable energy sources in …...mauricio tolmasquim (visiting senior fellow at harvard...

Mauricio Tolmasquim (Visiting Senior Fellow at Harvard Kennedy School)

FINANCING RENEWABLE ENERGY SOURCES IN BRAZIL

Mauricio T. Tolmasquim Visiting Senior Fellow

Harvard Electricity Policy Group Harvard Kennedy School

Harvard University

OECD Workshop on Financing Green Infrastructure Paris, November 3 2016


Source:Luiz Pinto and Marcos Reis, Lemann Center for Brazilian Studies Working Paper

DEVELOPMENT BANKS, USD BILLION (2013)


BNDES FINANCING (DISBOURSEMENTS) FOR GREEN ECONOMY

(BILLION USD)

Source: Sabrina Furtado, Instituto PACS


GREEN ECONOMY SHARE IN TOTAL BNDES DIBURSEMENT

Source: Sabrina Furtado, Instituto PACS and BNDES


BNDES FINANCING (DISBOURSEMENTS) FOR GREEN ECONOMY, 2014


INVESTMENT IN RENEWABLE ENERGY SOURCES

Source: Renewables 2015 Global Status Report (year base: 2014)


COMPETITIVE GENERATION

Regulated Contracting

Market

Free Contracting Market

Supply prices resulting from auctions

Supply prices freely negotiated

D CL C

D: retailers/captive consumers

CL: free consumers (above 3 MW)

C: traders

Two Contracting Markets


CALL FOR POWER PLANT PROJECTS Main technical requirements for participation

Reduction of Construction and Institutional Risks:

• A project's technical and environmental viability must be

ensured to participate in the power auction.

Source: EPE

TYPE ANEEL

REGISTRY

PRIOR

ENVIRONMENTAL

LICENSE

ELECTRICAL

CONECTION

INFORMATION

ENERGY

PRODUCTION

CERTIFICATE

LAND USE

CONTRACT

FUEL SUPPLY

CONTRACT OR

TERM OF

COMMITMENT

WATER USE

GRANT

HYDROPOWER

PLANT

(HPP and Small

Hydro) X X X X

THERMAL POWER

PLANT

(BIOMASS and

FOSSIL) X X X X X X

WIND POWER PLANT X X X X X

SOLAR PV PLANT X X X X X


The power plant investors that win the auction sign contracts with all the electricity distribution companies that have requested electricity. (The amount of energy covered by each contract is proportional to the participation of each electricity distribution company in the total power requested)

10%

50%

25%

15%

BILATERAL LONG TERM PPA

Reduction of the credit risk: Client Diversification Reduction of Market Risk: stable revenue even with an unfavorable market environment


FINANCING

10

The entrepeneur with the PPA look for financing to build the power plant

Entrepreneur Investment Bank


1) BNDES Direct Financing

2) BNDES Indirect Financing

Private Financial Institution is responsible for the credit analysis and financing condition and take non-payment risk

3) Private Financial Institutions


PROJECT FINANCE - BNDES Long Term Loan: Hydro: 30 years Wind: 20 years Solar: 15 years


FINANCING INFRASTRUCTURE HOLDINGS AND SPC’S

Holding

Government Banks/Funds may co-invest with strategic and financial investors, either directly in the SPC’s or through the holding company’s equity, taking

minority equity stake

SPC 1 SPC 2 SPC N

Bond

Equity

Bond

Equity

Brazilian Infrastructure Bonds and infrastructure investment funds – benefits for non-resident investors: (i)zero Income Tax rate (ii)zero IOF (Financial Operation Tax)

Source:BNDES


HYDRO POWER IN BRAZIL

Source: EPE


Operating and contracted

Sources: ANEEL and EPE

WIND POWER DEVELOPING IN BRAZIL

29 237 248 398 604 927 1,425

1,882 2,202

4,888

7,973

11,046

13,031

16,703

17,790

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Inst

alle

d C

apac

ity

[ M

W ]


Sources: ANEEL and MME

1,755

2,584 3,023

3,910

4,640

6,159

7,421

8,069

9,339 9,881

10,378 10,448 10,612 10,789 10,809

0

2000

4000

6000

8000

10000

12000

Inst

alle

d C

apac

ity

[MW

]

Operating and contracted

BIOMASS DEVELOPING IN BRAZIL


THE DEBUT OF SOLAR ENERGY

332 PROJECTS 10,092 MWp

TECHNICAL QUALIFICATION


RESULTS

400 PROJECTS

SUBMISSION

12,262 MWp

AVERAGE PRICE 8.8 US$ cents/kWh

1ST AUCTION OCT, 2014




RESULTS

382 PROJECTS

SUBMISSION

12,528 MWp


2ND AUCTION AUG, 2015




RESULTS

649 PROJECTS

SUBMISSION

20,953 MWp


3RD AUCTION NOV, 2015


Source: EPE

TOTAL 950 PLANTS – 78,934 MW

34 AUCTIONS

20 New Energy Auctions 3 Structural Projects Auction 8 Energy Reserve Auction 3 Alternative Source Energy Auction

HYDRO 35,642

45%

SMALL HYDRO 1,291

2%

WIND 14,626

18%

SOLAR 1,723

2%

SUGAR CANE BIOMASS

5,781 7%

OTHER BIOMASS 781 1%

NATURAL GAS 10,181

13%

COAL 2,130

3%

OIL 4,013

5%

DIESEL 871 1%

OTHER FOSSIL 490 1% URANIUM

1,405 2%

NEW RENEWABLES CONTRACTED 24,202 MW

[ 31% ]

RENEWABLE SOURCES CONTRACTED 59,843 MW

[ 76% ]

POWER AUCTIONS RESULTS 2005 - 2015


Thank you

[email protected]

[email protected]

mailto:[email protected]



financing renewable energy sources in …...mauricio tolmasquim (visiting senior fellow at harvard...

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