Cost Breakeven Point of Offshore Wind Energy in Brazil

Rodrigo Vellardo Guimarães, Milad Shadman (), Saulo Ribeiro Silva, Segen F. Estefen, Maurício Tiomno Tolmasquim and Amaro Olimpio Pereira ()
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Rodrigo Vellardo Guimarães: Energy Planning Program (PPE), COPPE, Universidade Federal do Rio de Janeiro (UFRJ), Centro de Tecnologia, bloco C, sala 211, Cidade Universitária, Ilha do Fundão, Rio de Janeiro 21941-914, Brazil
Milad Shadman: Offshore Renewable Energy Group (GERO), Ocean Engineering Program, COPPE, Universidade Federal do Rio de Janeiro, Rio de Janeiro 21941-972, Brazil
Saulo Ribeiro Silva: Energy Research Company (EPE), Praça Pio X, 54—Centro, Rio de Janeiro 20091-040, Brazil
Segen F. Estefen: Offshore Renewable Energy Group (GERO), Ocean Engineering Program, COPPE, Universidade Federal do Rio de Janeiro, Rio de Janeiro 21941-972, Brazil
Maurício Tiomno Tolmasquim: Energy Planning Program (PPE), COPPE, Universidade Federal do Rio de Janeiro (UFRJ), Centro de Tecnologia, bloco C, sala 211, Cidade Universitária, Ilha do Fundão, Rio de Janeiro 21941-914, Brazil
Amaro Olimpio Pereira: Energy Planning Program (PPE), COPPE, Universidade Federal do Rio de Janeiro (UFRJ), Centro de Tecnologia, bloco C, sala 211, Cidade Universitária, Ilha do Fundão, Rio de Janeiro 21941-914, Brazil

Energies, 2025, vol. 18, issue 9, 1-23

Abstract: Brazil has abundant natural resources and a largely renewable electricity matrix, with about 90% of its capacity from clean sources. Despite strong offshore wind potential, its economic viability remains uncertain due to the lack of a domestic supply chain and reliance on international cost estimates. This study assesses offshore wind competitiveness in Brazil using the investment decision model (IDM), which minimizes expansion and operational costs through 2031. Capacity factors (CF) from ERA5 data support monthly energy production estimates across load levels. Three scenarios were analyzed: (i) a reference case based on Brazil’s 10-Year Energy Plan (PDE 2031); (ii) mandatory addition of 500 MW/year of offshore wind to assess cost impact; and (iii) a breakeven case with gradual CAPEX and OPEX reductions until offshore wind became cost-competitive. The results indicate that offshore wind energy can become economically viable with a CAPEX range of approximately USD 1500–1550/kW and an OPEX of USD 50–55/kW·year in locations with a CF above 60%. These cost levels have already been observed in global markets and may be achievable in Brazil. However, challenges, such as the lack of a domestic supply chain and volatility in the exchange rate, remain significant barriers.

Keywords: offshore wind generation; investment decision model; optimization model; breakeven point; Brazilian energy matrix; renewables energy; energy planning (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2025
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