Brazilian wind capacity had reached 1.5 GW by the end of 2011 according to statistics released yesterday by the Global Wind Energy Council (GWEC).

Globally, the wind industry installed just over 41 GW in 2011, bringing total installed capacity to over 238 GW, an increase of 21% during the year. Commercial wind power installations are now in place in over 75 countries worldwide. Brazil joined the growing numbers of countries with over 1 GW of installed capacity during 2011 – that ‘club’ now numbers 22 countries, according to GWEC .

Referring to the global wind market, GWEC Secretary General, Steve Sawyer, commented that:

“2011 was a tough year, as will be 2012, but the long term fundamentals of the industry remain very sound".

China, which ranks as the world's largest wind energy market, ended 2011 with cumulative capacity of over 62 GW. India had total installations of just over 16 MW by the end of the year - having added over 3 MW in 2011. EU installed capacity reached 94 GW, with newly installed capacity during 2011 of 9.6 GW.

The US bounced back from a difficult year in 2010, with new installations in 2011 of over 6.8 GW, while Canada saw a record year – and saw its total new capacity surpass the 5 GW level.

Latin America overall added over 1.2 GW in new capacity. New Brazilian installations contributed 587 MW of that, to take the Brazilian total to just over 1.5 GW.

Pedro Perrelli, Executive Director of the Brazilian Wind Energy Association (ABEEOLICA) commented that:

“Brazil reached the 1 GW milestone during 2011, and has a pipeline of more than 7,000 MW to be completed before the end of 2016.”

According to Perrelli, while Brazil has attracted significant investment in wind, much of this has been facilitated by the policies of government owned development bank, BNDES. Perelli believes that:

"a new policy framework with clear rules for the future is increasingly necessary to keep the pace of growth strong."

The full report and statistics are available from the GWEC website.

Vestas made no deliveries to Brazil in 2011. The only Latin American deliveries made by the group, according to its annual report released today, were 76 MW to Argentina and 25 MW to the Dominican Republic.

The Vestas results for 2011 were described as "disappointing" by CEO Ditlev Engel. Vestas reported 2011 revenue of €5.8 billion, 16% below the 2010 level, and a €166 million loss for the year. The final results were below the levels Vestas had predicted in January, when it issued a profit warning and announced plans for over 2,300 redundancies (some 10% of its workforce).

The poor results at Vestas have been attributed by the company to production delays and the high cost of developing its V 112 turbine, as well as competition from China. Vestas has cautioned that results could deteriorate further in 2012 if US federal subsidies expire. The company has abandoned its targets for 2015 sales of €15 billion ($19.1 million) and profit margin of 15%.

Vestas announced a decline in total order intake in 2011, to 7,397 MW, from 8,673 MW in 2010. Orders in Asia fell sharply with low order intake reported in China.

The company said the V100 turbine model has been well received in Brazil (V100 orders overall accounted for 1,784 MW - up from just 601 MW in 2010). Brazil was flagged by the group as a bright spot, with order intake of more than 600 MW. The group reports that it sees great opportunities in Latin America, citing numbers from the IHS EER Global Wind Energy Market Forecast which anticipates total new capacity in the Americas overall of 14 GW this year 2012, of which 10.7 MW in the US and 3.3 GW in Latin America. By 2013, if the US federal subsidies are not extended, Latin America is forecast by IHS EER to overtake the USA in terms of annual capacity installed - with a forecast that it will add 3.6 GW, compared to just 2.4 GW in the US next year.

According to Vestas, Latin America offers great opportunities for wind. However, to date, Vestas has delivered cumulative capacity of just 204 MW to Brazil compared to 9,669 MW in the USA and 1,875 MW in Canada - and 49,332 MW globally.

With no deliveries reported to Brazil during 2011, it appears that there has been a delay in an 86 MW order for projects in Bahia and Rio Grande do Norte, which was announced by Vestas in 2010 and was due for completion before the end of last year. Based on reported orders - and including that 86MW order - we estimate that the total order backlog for Vestas in Brazil must be over 700 MW (see the list of orders in the table below).

The company's total order backlog was reported to be 9,552 MW (up from 7,622MW in 2010) - a record high. The value of the order backlog was reported to be €9.6bn. Brazil should, on this basis, account for a significant percentage of sales for the group in 2012 and 2013 (high single digit numbers?).

Vestas is recruiting at Sebrae, Ceará, where its nacelle manufacturing plant (its first in Latin America) was completed in October last year and will enter into commercial operation in May 2012. The Maracanaú facilitiy will have the capacity to produce 400 nacelles annually and it has the potential for further expansion in the future. Vestas is also understood to be considering expanding its business in Brazil to include the manufacture of towers and blades. Even without any deliveries in 2011, Brazil remains by far the company's largest Latin America market. It is followed by Chile (117 MW delivered) and Mexico (103MW delivered).

Vestas chairman, Bent Erik Carlsen, and Deputy Chairman, Torsten Erik Rasmussen, will both step down from their roles next month, in the wake of the disappointing results. CFO Henrik Noeremark announced his resignation yesterday. Vestas' share price fell by almost 14% on the Copenhagen stock market today, closing at DKK57.5.

Vestas: Reported Brazilian Orders

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German wind equipment manufacturer, Fuhrländer, claims to be on the point of signing contracts valued at R$900m for the sale of turbines with capacity of 400 MW in Brazil. The identity of the customer(s), which will rank as the first for the company in the Brazilian market, has not been disclosed - but they are understood to be amongst the winners of contracts in last December's auction.

Fuhrländer is building a manufacturing plant, with capacity to produce 20 turbines every month, in Pecem (in the state of Ceará) at a cost of R$20m. The company is aiming to differentiate itself in the competitive Brazilian market through its technology - specifically with the use of high towers of 140 metres, which can take advantage of stronger winds.

Fuhrländer is currently focusing on business in the North East of Brazil, but is understood to be considering constructing a second plant in the south of the country - although no decisions have been made on that.

Chinese wind turbine manufacturer, Sinovel, is set to supply turbines to Brazilian projected developer Desenvix - which has reportedly secured funding of US$55m from the China Development Bank for the construction of a 34 MW project in the state of Sergipe. The project, Barra dos Coqueiros, is being built by Desenvix subsidiary, Energen, and is due to come online in July this year (it won a contract in the 2009 auction to supply power at a rate of R$152/Mh).

With the recent news that LM Wind/Eolice is to build a blade manufacturing plant in Suape, it’s clear that the Brazilian State of Pernambuco is emerging as a key cluster of manufacturing expertise for the wind industry. Leading Danish wind rotor blade manufacturer, LM Wind, is investing R$100m in a manufacturing plant for 50 metre blades in Suape (north east Brazil), through its associate company Eolice Participações e Investimentos.  Production at the 25 hectare site is scheduled to begin in mid-2013 and the plant will involve the creation of 1,500 direct jobs. LM Wind/Eolice will receive incentives under the Pernambuco Development Programme (Programa de Desenvolvimento de Pernambuco, or Prodepe), which will provide favourable credit facilities for twelve years.

Pernambuco is already a manufacturing base for wind industry companies including Impsa (generators), Iraeta (flanges) and RM Eólica (towers) – and the State claims to be the first in Brazil to be manufacturing a full range of equipment for the wind energy industry.

The LM Wind/Eolice blades will supply both domestic Brazilian demand and export demand, although the Brazilian market will be the priority according to Eolice director, Romulado de Barros. Around 40% of all blades used in Brazil are imported at present. LM currently importing blades from its plants in China and the US to meet demand.

According to the Government of Pernambuco, wind energy generation has attracted investment of R$425m to the state and has created around 3,400 jobs to date. With the aim of attracting further investment in wind generation, the state government has commissioned a number of studies to identify further wind resources. The studies will include a review of resources of wind at altitudes of between 80 and 100 metres.

Iberdrola began construction at its second wind farm in Brazil, Mel II, last month. Mel II is the first of ten projects, with a total capacity of 288 MW, which the firm will build in Brazil between 2012 and 2013. Mel II, in Rio Grande do Norte, will have capacity of 20MW and will be equipped with ten Gamesa 2MW G90 turbines. It follows on from the Río do Fogo project, also in Rio Grande do Norte, which has installed capacity of 49MW. Iberdrola’s Brazilian projects are being developed in a partnership with Neoenergia, a Brazilian holding company.  The total investment for these projects will amount to R$1.1bn (EUR480m).

CPFL Renováveis has agreed to acquire four wind parks in Palmares do Sul, Rio Grande do Sul, from Cobra Instalaciones y Servicios. The four parks, Atlântica I, II, IV and V have installed capacity of 120 MW and are expected to become operational in 2013. The parks have licenses to sell energy, awarded under the 2010 auctions, at prices of R$135 per MWh. The deal requires approval from the National Electrical Energy Agency, Aneel. When it goes ahead, it will take CPFL’s portfolio to 29 projects, of which four are already operational (in Ceará, with capacity of 210MW). The firm has 25 projects under construction in Rio Grande do Norte and Rio Grande do Sul with projected installed capacity of 670 MW by 2014.

Suzlon’s Brazilian subsidiary, Suzlon Energia Eólica do Brasil Ltda., received an order from the Servtec Group for a 24 MW wind power project in the state of Ceará in Brazil in January. The turnkey project, which is a joint venture between Servtec and Rio Bravo Investimentos, comprises twelve S95 – 2 MW wind turbines. It will be commissioned in phases and will be completed by December 2013. It is the second project in which Suzlon and Servtec are working together.