Clean-up operation

Renova Energia is a 100 percent Brazilian company with broad expertise in electric power generation using renewable sources. Since its foundation in 2000, Renova has developed a portfolio of alternative renewable energy projects including 2,205.7MW of wind farm capacity and 1,467.5MW in small hydroelectric power plants (SHPPs) in several Brazilian states such as Bahia, Minas Gerais, Mato Grosso, Maranhão, Goiás, Tocantins, and Paraná.

The company was the biggest winner in Brazil’s first wind energy auction, held in December 2009. In this auction, the company sold 270MW of installed capacity across 14 wind farms. Renova Energia sold an additional 153MW of capacity installed in six wind farms in the second reserve energy auction carried out in Brazil in August 2010.

The company’s outstanding performance in energy auctions can be explained by its integrated engagement in exploring, developing, implementing and operating projects. These features account for an unparalleled operating efficiency with Renova’s wind energy projects having  capacity factors of over 50 percent, a much higher rate than averages seen in both domestic and international markets. Among the competitive advantages of Renova are the synergies captured across its portfolio projects, combined with the privileged geography of its farms and employment of leading-edge technology.

Over its 11 years of operation, Renova has invested in training and developing the skills of a solid team comprising highly-skilled subject-matter specialists in the areas of engineering, geology, environment, law, and other fields.

In June 2010 the company completed an IPO and earned its way to Level II Corporate Governance of BM&F BOVESPA (São Paulo Stock Exchange), with its stock trading under the RNEW11 ticker code. Renova thus became Brazil’s first alternative energy company with stock traded in a capital market. The amount raised in the IPO was R$162m and will be used to support the company’s expanding operations.

Renova’s stock increased approximately 130 percent in value between the IPO and April 2011. Today, the company has a market value of R$1.605bn.

Brazil’s installed wind power capacity should experience an annual aggregate growth of 55 percent between 2013 and 2025, raising from 5 GW to 33 GW according to IHS – Emerging Energy Latin America Wind Power Markets & Strategies 2010. Current trends indicate Renova will keep up with the growth of wind power in Brazil.

Among the company’s shareholders are funds InfraBrasil and FIP Ambiental, both independently managed by Banco Santander, and Renova’s founders, Ricardo Delneri and Renato Amaral.

Out of 20 wind farms already included in auctions, 14 have commenced the building work last February and are on their way to becoming Brazil’s largest wind power complex. This endeavour is expected to receive R$1.17bn in investments, with facilities being built in the municipalities of Caetité, Guanambi and Igaporã, in upcountry locations of the State of Bahia, Brazil. The annual output of the facility will reach 1,100GWh/y (Gigawatt-hours per year), equivalent to the power consumption of 650,000 households. Estimates say 2,000 direct and indirect job posts will be created at the peak of the project’s works.

Additionally, Renova’s business model should assist and empower local economies and encourage settlement of small farm owners in country areas. Renova’s model is based on land lease arrangements, which allow small farmers to continue working on their lands but now earning some additional income.  

Initially a total of 184 wind turbines will be deployed, each one standing 80m tall (the same height as a 27-storey building) and with a blade length of 42m. This equipment was procured from GE, and each generator has a nameplate output of 1.6MW. The civil works for the wind farms have been commissioned to a joint venture formed by renowned Brazilian contractors such as Queiroz Galvão-Mercurius. Electric and electronic installations will be carried out by ABB, a global leader in power and automation technology. The energy production will be distributed by a Shared Generation Facility (SGF) to be built by Companhia Hidro Elétrica do São Francisco (Chesf). 

The complex is scheduled to start up commercial operations in July 1, 2012. The term of power purchase and sale contracts entered into with the Electric Power Trading Chamber (EPTC) is 20 years. The EPTC is the Brazilian body responsible for managing and overseeing trading of both regulated and free electric power contracts within the National Interconnected System.

Expertise and competitiveness
In Brazil, power purchase and sale contracts traded in auctions are based on an annual power delivery average in megawatt-hour units. As a result of this structure, the company believes that the successful performance of its projects will enable it to charge a lower rate compared to its competitor wind farms.

In view of this scenario and an increasingly favorable outlook for the Brazilian wind power market, Renova Energia banks on the synergies of its projects, especially in terms of access, transmission infrastructure and management intelligence, as a competitiveness strategy to consolidate itself in the market and participate in upcoming power auctions that will take place in Brazil.

It is worth mentioning that the company is accredited to trade in carbon credit markets owing to the cleanliness of the energy generated through wind farms and SHPPs and the corresponding reduction in fossil fuel dependency. This form of electric power generation is eligible to earn carbon credits, and the company intends to derive additional revenues with the trading of such credits.

Renova believes that one of Brazil’s biggest challenges remains in developing new energy sources without causing major impact on the environment. In this sense, it is the responsibility of society to discuss and understand the complexity of their current energy system, so that good decisions will be made toward building a future that is based on environmental sustainability without overlooking an ever-increasing need for electric power, the critical asset ensuring social and economic development of all nations.

For more information: renova@renovaenergia.com.br; www.renovaenergia.com.br; Tel: 55 11 3569-6746