The approval of Bill 576/2021 at the end of 2024 marked a fundamental milestone for the development of offshore wind energy in Brazil. With one of the largest potentials in the world, estimated at over 1,200 GW, the country now has the opportunity to consolidate a robust sector capable of transforming its energy matrix and driving a low-carbon economy. Following the enactment of the law, it is now up to the executive branch, particularly the Ministry of Mines and Energy (MME) – to regulate and prepare the first sea use concession auction, a crucial step to unlocking investments in this promising industry.

The offshore area auction, which we are working on holding later this year, is a key structuring mechanism to enable the sector’s development. Without a sea use concession title, the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) and other relevant agencies cannot grant licences for projects, preventing investors to move forward with the necessary studies. Consequently, a sector with billion-dollar potential and the capacity to generate thousands of jobs would remain stagnant.

Beyond defining areas for exploration, the auction initiates a long-term development process in which investors will need two to three years to complete feasibility studies and several more years to start constructing offshore wind farms. Given that the full development cycle can take between seven and 10 years, holding an area auction in 2025 would mean that the first offshore wind farms would only start generating energy by 2032 or 2033.

In other words, first offshore wind projects are expected to only come online in the next decade. However, clearly defining sector regulations and holding the auction in 2025 will be decisive in keeping Brazil attractive to major investors, as offshore wind requires long-term capital commitments that must be signalled in advance. Estimates suggest that each installed gigawatt (GW) of offshore wind capacity represents an investment of approximately €2.5bn in the national economy, reinforcing the sector’s strategic importance for Brazil.

Seizing the moment 
This moment presents an opportunity for Brazil to enhance its global leadership in the energy transition – especially in light of a recent US decision to scale back investments in offshore wind. With Brazil set to host the upcoming United Nations Climate Change Conference (COP) this year, advancing this agenda is essential to reaffirming environmental commitments and fostering green reindustrialisation. The growing demand for clean energy in sectors such as mining, fertilisers, green hydrogen and sustainable fuels makes offshore wind a cornerstone of the country’s future economy.

Furthermore, a well-regulated offshore wind sector will drive the development of a strong local supply chain. The shipbuilding, steel and port industries stand to benefit from the sector’s expansion, creating new jobs and strengthening national industry. Additionally, ensuring regulatory predictability and stability will enable Brazil to position itself as a key player in the global clean energy market.

This moment presents an opportunity for Brazil to enhance its global leadership in the energy transition – especially in light of recent US decision to scale back investments in offshore wind.

The implementation of offshore area concession auctions will serve as an industrial signalling mechanism for the supply chain, demonstrating a medium and long-term project development outlook in a structured and predictable manner, aligned with large-scale green reindustrialisation efforts.

Therefore, adjusting the regulatory decree and defining the ordinances that will govern sea use concession auctions are essential steps in turning offshore wind energy into reality. Rapid regulatory progress is imperative to ensuring that Brazil fully harnesses its vast potential into reality, driving the transition to a low-carbon economy and solidifying its role as a global renewable energy leader.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.

• Further reading: ‘How Brazil beats many richer nations in renewables’. Brazil looks set to be a world-leading trailblazer in adopting renewable energy. Find out how abundant natural resources, imported know-how and technology, combined with new regulation, have helped grow clean energy adoption by Latin America’s largest country.
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