Vale, Pacific Hydro to Team Up for 140 MW Wind Farms
Vale, the world’s second-largest mining company, and Australian renewable energy company Pacific Hydro have announced a consortium agreement to jointly build and operate two wind farms, totaling 140 MW, in Brazil’s northeast.
Under the consortium agreement, each company will have 50 percent ownership of both wind farms, which are expected to be completed by late 2014. The projects will represent an investment of about R$650 million ($316 million). The wind farms will be Vale’s first, according to Bloomberg BusinessWeek.
The turbines will be located in Rio Grandedo Norte and have already been granted all necessary environmental permits. Vale will be the sole user of the electricity produced by the projects for a period of 20 years.
The mining company expects its demand for electricity to increase 150 percent by 2020 and has been seeking options to meet this demand in a sustainable way, using renewable sources such as hydro, wind and biomass, the company said.
Pacific Hydro said the partnership will be the first free market and self-producer commercialization model for wind farms in Brazil, and is an important step in Pacific Hydro’s strategy in the country. The project should allow the Brazilian wind market to expand well beyond the regulated energy auction market, Pacific Hydro said. The Australian company already has 58 MW of operating wind farms in the state of Paraíba, supplying utility Eletrobras.
Worldwide investment by the mining industry in renewable energy and energy conservation will reach about $8.4 billion by 2016 and nearly $20 billion by 2020, according to a report from Pike Research released in May. Under a more aggressive scenario, in which the global economy expands more rapidly and policy mandates pertaining to climate change are more robust, spending could reach $15.6 billion by 2016 and $30 billion annually by 2020, the cleantech market intelligence firm forecasts.
The growth will be driven by ever-increasing pressure from investors and consumers, the research firm said. In general, Pike expects mining’s investments in renewable energy technologies will range from 10 percent to 20 percent of total energy expenditures during the forecast period.
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