(Bloomberg) -- Vestas Wind Systems A/S expects demand for wind power to rebound in Brazil, after a slowdown in Latin America’s top market prompted the turbine supplier to focus more attention elsewhere in the region.
“I see Brazil coming back in the next year,” said Marco Graziano, president at Vestas Mediterranean. “You’ve got to be patient.”
The world’s biggest turbine supplier has expanded its efforts in the growing clean-energy industries in Argentina and Mexico to compensate for a decline in Brazil.
Vestas currently has 1.9 gigawatts of wind projects under construction in Latin America, with 45 percent in Mexico. The company has 625 megawatts of wind projects under construction in Argentina, which held its first clean-energy auctions last year, and just 371 megawatts in Brazil.
With growing demand for energy and some of the most reliable winds in the world, Brazil had consistently been a major market for turbine suppliers. At least it was, until the worst recession in the country’s history dragged down power consumption. In December, the country pulled the plug on what would have been 2016’s only auction solely for wind and solar energy, and hasn’t held any since.
That presented a challenge to Vestas and other suppliers that set up turbine factories in Brazil, expecting that demand would continue to grow.
Clean Energy Slump
Instead, clean energy is slumping. New installations of wind and solar projects in Brazil will climb to 4,200 megawatts next year, the result of projects that have been in the works for years, and then plunge by 67 percent the following year, according to Bloomberg New Energy Finance.
In Mexico, installations will surge next year to 5,000 megawatts, from 700 megawatts in 2017, and Argentina is expected to reach 1,800 megawatts next year from almost nothing in 2016.
Vestas is optimistic about the long-term prospects in Brazil, Graziano said. More than 11 gigawatts of wind capacity are expected to be connected to the grid through 2026, and the government announced Monday plans for two power auctions in December, for plants that will go into service in 2021 and 2023.
“Brazil has been in a low,” Graziano said in an interview in Rio de Janeiro. “We can afford to be in the country, as we are able to compensate its current bad moment with other markets in the region. When you have a big basket, you play with it.”