The Torrebras wind tower manufacturing plant was officially opened in Bahia today by State Governor Jacques Wagner, providing Bahia with a full complement of wind generation equipment suppliers and consolidating its position as a key hub for the industry in Brazil.

The 120,000 m² facility established by Torrebras, part of the Spanish group Daniel Alonso, is located in the Pólo Industrial de Camaçari (an industrial complex close to the capital city, Salvador). It has involved investment of R$ 20 million (US$10 million) and will employ a staff of 300 on the production line. It has capacity for the production of 200 towers annually and all of the production capacity for 2013 has already been sold, according to the company - for projects in the State of Bahia. There are already plans to double capacity at the plant to supply the national Brazilian market.

Bahia already has three nacelle manufacturers (Gamesa, Acciona and Alstom). With the addition of Torrebras and the imminent arrival of blade manufacturer Tecsis (which confirmed last month that it would establish a plant in the state), the core supply chain for the wind sector is complete, opening opportunities for other related activities in the area, according to James Correia, Secrretary of Industry Commerce and Mining for the State of Bahia. Both Gamesa and Alstom are locatd in Camacari. Acciona's plan is also close to Salvador.

The State of Bahia has enormous potential for the generation of wind power (an estimated potential of 14.5 GW according to Correia) and is now also firmly established as one of the principal clusters for wind equipment manufacturing. Tecsis plans to invest R$ 200 million (US$ 100 million) in a new plant, also in Camacari - both for the domestic Brazilian market and for export.

Brazil's Ministry of Mines and Energy (MME) has confirmed the date for the next dedicated wind energy auction as 23 August 2013. Participants must register before 27 May to participate in the auction, which will contract energy to be supplied from 1 September 2015, with a contract for 20 years.

The MME has changed the criteria by which it will assess the ‘physical guarantee’ of projects participating in the auction. In future projects will be assessed on the ‘ P90’ criteria, which will replace the previously used ‘P50’ measure. ‘P’ values measure the ‘exceedance probabilities’ for wind energy production (P50 – also known as the Central Estimate – is the mean predicted level of generation, while P90 indicates the level of annual production that is forecast to be exceeded throughout 90% of the year – i.e. the probability of exceedance). The P90 measure is commonly used by investors for risk assessment. Higher project values (which secure more favourable loan terms) are typically accorded to projects with a lower gap between P90 and P50.

In Brazil, projects which are granted a 20 year PPA contract through the auction system are eligible for funding from Government owned development bank BNDES (subject also to criteria relating to the use of locally manufactured content). The deployment of P90 criteria by the MME should – in theory – reduce the risk inherent to BNDES from this lending (which is provided at very favourable terms).

The MME has stipulated that annual energy production certified should consider the reduction of losses, should take account of the arrangement of wind turbines, local meteorological conditions, the air density, the degradation of blades and aerodynamic losses of the park itself, the effects of wake turbulence and other parks, amongst other factors.

Research director of the EPE (the agency connected to the MME and which runs the auctions), José Carlos Miranda, quoted in Jornal da Energia, commented that the new conditions mean that project developers must invest more to ensure higher performances – and he has stated that he believes that prices of wind will increase in the August auction, although he believes that wind energy will remain competitive with other energy sources (such as biomass). Prices contracted for wind projects in Brazil had fallen significantly over the last few years.

The measure has been criticized by Sérgio Marques, President of Bioenergy, a company which was a major winner of recent auctions – at extremely low prices. However, it appears to have been widely anticipated by the market: many wind operators and equipment suppliers have expressed concern over recent months about the implications of the low prices in the auction last December. Commenting in Jornal da Energia, Brazilian Wind Energy Association (Abeeólica) President, Élbia Melo, confirmed that the changes had been anticipated by the industry.

Honda Automóveis do Brasil (HAB) is constructing a wind farm in Xangri-lá, in the Brazilian State of Rio Grande do Sul, which will generate sufficient energy to cover the needs of its car manufacturing plant in the city of Sumaré, in the State of Sao Paulo (around 1,000 km to the north). The farm, to be operated by Honda Energy do Brasil, a newly created subsidiary of HAB, will require investment of R$100 million. It is set to enter into operations in September 2014. The energy will be produced by nine 3MW turbines with installed capacity of 27 MW.

Honda Transmission Manufacturing of America, Inc., recently announced plans for two wind turbines at its plant in Russels Point, Ohio.

Gamesa has announced a contract to supply 75 G97 2MW wind turbines with combined capacity of 150 MW at five projects in Bahia. It has also signed a maintenance contract for 15 years for the projects, which are being developed by Consórcio Morrinhos (a consortium between Atlantic Energias Renováveis S.A. and Casa dos Ventos) and are located at Campo Formoso, in the State of Bahia. Installation of the turbines is scheduled to start in the second half of 2014 and end during the first half of 2015 with the creation of 870 direct and indirect jobs during the construction phase.

Gamesa established its manufacturing plant in Camaçari, close to Salvador, Bahia, less than two years ago and to date has now secured contracts for the supply of turbines with combined capacity of almost 1,000 MW, in Ceara, Bahia and Rio Grande do Sul. At year-end 2012, Gamesa had installed 96 MW of capacity in Brazil, which  Edgard Corrochano, the company's Regional Director for the Southern Cone Region, describes as one of Gamesa's "priority growth markets for the near and medium term".

In September 2012 Gamesa had confirmed an order for 129 G97-2.0 MW turbines at 10 wind farms being developed by Santa Vitória do Palmar Holding (owned by investment fund Río Bravo Energía and Eletrosul, a subsidiary of national power company Eletrobras), in the State of Rio Grande do Sul. That order was valued at R$843 million (EUR340 million). No value was provided for the Consórcio Morrinhos contract.

The State of Bahía is considered to be the operational hub of Gamesa's expansion strategy in the Mercosur region. Gamesa is present in other Latin American nations, including Mexico, Honduras, Argentine and Costa Rica, where it has installed almost 1,000 MW of turbines. Overall in 2012, Latin America accounted for 47% of its order intake and 32% of total revenue and Gamesa has confirmed that Latin America and the Southern Cone are now "the main growth driver in this business."

Alstom’s President of Renewable Energy, Jérôme Pécresse, and Carlos Mathias Becker of Renova Energia, today announced a major partnership for the supply of wind turbines. The agreement between the companies will involve the supply of turbines worth over €1 billion – with capacity of at least 1.2 GW - in the State of Bahia. Both companies are strongly established in the wind industry in the state – which has conditions described by Elbia Mello (President of the Brazilian Wind Energy Association Abeeolica) as “perhaps the best in the world for generating wind energy” - and which has contributed to the falling cost of wind to some of the lowest levels in the world.

Paris listed Alstom has a manufacturing plant in the Camaçari industrial zone next to the State Capital of Bahia, Salvador. Renova has a total project portfolio of 9.7 GW (of which 29 MW is already contracted) in the state. Equipment for its projects was previously supplied by GE.

Alstom clearly intends to establish a significant wind power equipment manufacturing hub in Brazil, where it is already firmly established a major supplier to the hydro power industry. Alstom has operated in Brazil for 55 years, providing it with an advantage over some of the ‘pure’ wind equipment suppliers who are new to the ways of the Brazilian energy market. A number of world scale wind turbine manufacturers – including Vestas and Acciona – were ‘blacklisted’ by Brazilian development bank, BNDES, last year for failing to meet with the criteria for local manufacturing (while there are no legal restrictions on the use of foreign manufactured equipment in Brazil, most projects depend upon funding from BNDES, provided at a discounted rate and contingent upon the use of locally manufactured equipment). Alstom is developing a local supply chain in addition to manufacturing facilities – and has focused on the training of local employees and development of local know-how, especially in Bahia.

Renova Energia, which is listed in São Paulo, has been one of the most successful participants in the Brazilian wind energy auctions over recent years.  Renova is a relatively new company, created in 2007. It came to the market through an IPO in 2010 and in 2011 raised funding of R$375 million from CEMIG / Light (one of the major electricity utility groups in Brazil). Last year it secured further funding through a capital increase backed by BNDESPAR (a BNDES fund).

The deal between Alstom and Renova Energia involves some 440 onshore wind turbines in the Alstom ECO 100 range, with capacities of between 2.7 MW and 3 MW, for delivery from 2015 onwards.