Brazil’s Ministry of Mines and Energy has postponed the reserve auction scheduled for July 29. It’s expected that it will involve more than 9GW of PV projects, making up 90% of the capacity registered for the auction. What does this mean for the Brazilian solar market?
Interview with Dr. Florian Wessendorf, managing director of Solar Promotion International, and Daniel Strowitzki, CEO of FMMi. The exhibition and conference Intersolar South America was first organized in 2012 as a small summit and soon developed into the largest solar exhibition on the South American continent. As usual in emerging markets, the market conditions in Brazil remain challenging. What does that mean for Intersolar?
Brazil's Ministry of Mines and Energy has postponed the reserve auction scheduled for July 29. It's expected that it will involve more than 9GW of PV projects, making up 90% of the capacity registered for the auction. What does this mean for the Brazilian solar market?
Florian Wessendorf: My understanding is that Brazil is currently looking to reorganize and diversify its solar auctions. Minister Coelho Filho emphasized that the solar PV segment is critical to the Brazilian energy matrix and that new ways to encourage the sector must be found so that solar implementation doesn't depend on auctions alone. This obviously means while auctions will continue, he'll also be looking at new ways to boost solar capacity.
Will this postponement have any influence on your conference?
Daniel Strowitzki: Yes, in so far that it'll be a reality check for the Brazilian solar market. What that means is we'll discuss how different market segments develop, what the shortcomings and obstacles are and what the new options are for pushing solar energy.
Funding and taxes are still the main challenges for the solar industry in Brazil. Where could the solution lie in the not-too-distant future?
Florian Wessendorf: Minister Coelho Filho recently made a statement that the ministry is considering an energy policy that would give tax equality to renewable generation plus incentives to produce equipment domestically. The impact of both is that they will strengthen the Brazilian solar industry.
The Brazilian government cannot guarantee that at least 2GW of solar PV per year will be contracted out through tenders - a figure industry players were hoping for to safeguard the return of the solar equipment makers that have already invested in Brazil - and to attract new investments. Have you received any kind of feedback from market players about this?
Florian Wessendorf: Not yet. Since the Brazilian government is adjusting its solar policies at the moment, we need to wait to see what the market will really look like and what the terms and conditions for different market players will look like. It would certainly help the industry if the government could guarantee a sufficient amount of contracted solar PV each year. Whether this happens via tenders or other tools isn't what matters.
The unemployment rate in Brazil is very high at the moment (11% in July). Florian Wessendorf: Could solar power or the renewable energy industry in general be a solution?
Florian Wessendorf: The country may be going through a fiscal and economic crisis at the moment, but the priority is still solar energy and other renewables. So in that respect, renewables will have an impact on employment, especially if Brazil establishes a robust value chain in renewables. There are plenty of opportunities for young engineers, experienced workers, and experts. Part of the picture could be foreign investors. The underdeveloped Brazilian currency is currently making projects cheaper and Brazil has stable and reliable (e.g., government-backed PPAs for 20 years).
Could education and training for installation experts help prepare the manual trades for the new employment market?
Florian Wessendorf: Without a doubt. Energy-related topics are always about quality and reliability. To be competitive, solar power has to perform strongly for 20 years or more - often in a harsh climate. Solar will only succeed if the components, installations, and maintenance meet high standards and are reliable. So inevitably, this requires a skilled workforce. Education and training are absolutely crucial for the sustainable development of solar projects. That's why we're placing such a strong focus on workshops and training at this year's event. For example, Prof. Trajano will be conducting two live training sessions to show how to work with cables, sockets, and connectors. Every attendee will receive samples so they can learn the do's and don'ts of working with components.
Chile currently dominates the Latin American solar market, but according to GTM Research's PV Playbook for Latin America, it may soon relinquish its leadership. GTM expects both Mexico and Brazil to install more PV than Chile in 2017 and they could even surpass it in cumulative installations by 2018. You've been asked a number of times why you didn't organize Intersolar South America in Chile. Do you now feel vindicated by your decision?
Daniel Strowitzki: We're constantly looking for new and emerging solar markets. But running an Intersolar exhibition and conference always follows an assessment of current conditions and future prospects. We've always believed that Brazil is an attractive market for solar energy, not only in terms of installations, but also in the context of supply chain and added value. Brazil is the biggest economy in Latin America and it has an appetite for renewables and a strong track record in manufacturing.
The Argentinian government is seeking to lower energy imports so it's moving forward with a broad-scale plan to boost renewable energy in the country. It's hoping to auction 10GW during President Mauricio Macri's term. Wouldn't Argentina be a better home for Intersolar South America?
Florian Wessendorf: Let's see what actually happens in Argentina. We'll be using our Sao Paulo event as a hub for the whole of South America. Our idea is to discuss all current trends, opportunities, and obstacles in the region. If Argentina's plans do become more concrete, we can easily set up dedicated programs in Sao Paulo - including conference sessions, workshops, and delegations - to serve their specific needs.
Intersolar South America says it's the largest exhibition for the solar industry in Latin America. Do you have evidence of this?
Daniel Strowitzki: Sure. There were more than 115 exhibitors from 11 countries at Intersolar South America in 2015. This is an increase of 60 percent versus 2014. There were more than 9,000 visitors and more than 800 conference delegates in Sao Paulo last year. This year we're expecting more than 150 exhibitors, over 10,000 visitors and more than 800 conference attendees. We're also growing significantly in terms of rented area.
What can people traveling in from abroad expect from this year's Intersolar South America?
Daniel Strowitzki: International attendees will gain detailed insights into the Brazilian solar market. They will meet leading professionals from the most influential solar regions in Brazil, Latin America overall, and the rest of the world, including many "final" decision-makers. Also, Intersolar South America is a showcase for the latest products, know-how, and developments.
With events spanning four continents, Intersolar is the world's leading exhibition series for the solar industry and its partners. It unites people and companies from around the world with the aim of increasing the share of solar power in our energy supply.
Intersolar South America is the largest exhibition and conference for the solar industry in South America. It takes place at the Expo Center Norte in São Paulo, Brazil.
The event's exhibition and conference both focus on the areas of photovoltaics, PV production technologies, energy storage systems and solar thermal technologies. Since being founded, Intersolar has become the most important industry platform for manufacturers, suppliers, distributors, service providers and partners in the global solar industry.
115 exhibitors and more than 9,000 trade visitors attended Intersolar South America in 2015. 91 speakers and more than 817 attendees discussed current industry topics and shed light on the conditions surrounding technological, market and political developments at the accompanying conference.
With 25 years of experience, Intersolar has the unique ability to bring together members of the solar industry from across the world's most influential markets. Intersolar exhibitions and conferences are held in Munich, San Francisco, Mumbai, São Paulo, and, starting in 2016, in Dubai. These global events are complemented by the Intersolar Summits, which take place in emerging and growing markets worldwide.
For more information on Intersolar South America, please visit: www.intersolar.net.br