Adaptations of renewable energy policies to unstable macroeconomic situations—Case study: Wind power in Brazil

Despite the massive cost reduction in the last decade, wind power generation is generally still more expensive than conventional energy sources which benefit from the exclusion of externality costs in the price structure. Support policies for renewable energies guarantee the economic viability of this type of electrical power generation in many European countries. In Latin America, Brazil has become the pioneer state for renewable energy with the implementation of the PROINFA programme that supports, among other sources, wind power development of 1100 MW. This article presents an overview of the differences between the German and Brazilian wind power promotion policies with a special focus on how PROINFA can be adapted to the unstable macroeconomic situation of Brazil. The document specifically examines the adaptation of wind power promotion policies to large inflation and interest rates in Brazil.