Big oil aims to exploit Brazil’s sun, wind too

Bloomberg

European oil majors are looking for more than just deepwater gushers in Brazil. They also plan to profit from the country’s abundant wind and sunshine.
Royal Dutch Shell Plc, Total SA and Equinor ASA have all pledged in recent weeks to invest in Brazilian renewables. The push could more than double wind and solar’s share of Brazil’s energy mix to 18 percent by 2026, according to the EPE, Brazil’s energy research office.
The diversification into clean energy comes as European investors express concern that oil companies will shrink as the world shifts away from fossil fuels to combat climate change. Brazil’s unique geology has already made it an oil exporter as well as the region’s largest producer of wind power. And while the sun only provides a fraction of its electricity now, Brazil averages 4.25 to 6.5 solar hours a day, among the highest levels worldwide.
Producers need to start preparing for the transition to a low carbon economy even though it will be gradual, Bassam Fattouh, director of the Oxford Institute for Energy Studies, said. “In an environment of uncertainty like this, you need to start adjusting your portfolio to hedge yourself,” he said.
“The transition to a low-carbon era has started,” said Decio Oddone, the head of Brazil’s National Petroleum Agency, known as ANP. “Brazil needs to explore its oil and gas resources right now, or we will leave the oil in the ground.”
Petroleo Brasileiro SA, Brazil’s state-controlled oil company, also known as Petrobras, is already partners with Paris-based Total at some of the country’s biggest offshore fields. The companies signed a memo of understanding in July to explore wind and solar projects.
Total’s Brazilian unit recently announced the commissioning of
its first Brazilian solar plant in
Bahia state, with a capacity for 25 megawatts from almost 78,000 panels. The company has also launched two other solar projects with the aim to produce 140 megawatts.