Renova May Become Brazil’s Biggest Wind-Power Producer by 2016

Renova Energia SA (RNEW11), the Brazilian renewable energy company, may become the nation’s biggest producer of wind power by 2016 using the proceeds from selling a 26 percent stake to the state-controlled utility Cia. Energetica de Minas Gerais.

Renova may develop as much as 1.3 gigawatts of wind farms over the next five years, Pedro Pileggi, investor relations officer for the Sao Paulo-based company, said in an interview.

The new projects may catapult it to the top spot in Brazil’s wind market, ahead of its largest competitor CPFL Energias Renovaveis SA, a joint venture formed in April that combines the renewable energy assets of utility CPFL Energia SA and developer ERSA-Energias Renovaveis SA, he said.

“Wind projects are, right now, our most competitive projects,” Pileggi said yesterday in an e-mail. “We’d be the biggest” power producer “in terms of wind electricity generation.”

Cemig’s Light SA (LIGT3) unit paid 360 million reais ($230 million) for the stake in Renova. The investment, announced July 8, included an agreement by the Rio de Janeiro-based utility to purchase electricity from 400 megawatts of planned Renova wind farms, half of which are expected to come online by 2015 and the other half in 2016, he said.

Renova’s power contracts averaged 121 reais a megawatt-hour in a government-organized auction last year for new renewable energy projects, and Pileggi said the Light agreement “was more or less in line with that signed by us in previous auctions.”

August Energy Auction

Renova registered 424 megawatts of wind farms in an auction scheduled for next month that are expected to come online by 2014, he said.

CPFL Energias Renovaveis has 210 megawatts of wind farms in operation and 296 megawatts under construction, and it’s planning another 1,472 megawatts, according to a company presentation.

It’s unlikely that CPFL Energias Renovaveis will have more than 1,300 megawatts online by 2016, Helena Chung, an analyst at Bloomberg New Energy Finance, said yesterday by phone. “It may be close, but I don’t think it will happen,” she said.

CPFL didn’t reply to an e-mail seeking comment.

Brazil has 51 wind farms amounting to about 1 gigawatt of installed capacity, up from 587 megawatts at the end of 2009, according to New Energy Finance. The national energy agency Empresa de Pesquisa Energetica expects to have 12 gigawatts online by the end of the decade.

To contact the reporter on this story: Stephan Nielsen in Sao Paulo at snielsen8@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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