BlackRock's Atlas invests $1 billion into renewable energy in Brazil

Atlas Renewable Energy has put on hold plans to invest $1 billion in Brazil because the Brazilian grid operator has repeatedly rejected renewable energy, said CEO Carlos Barrera.

Barrera noted that Atlas, owned by BlackRock's Global Infrastructure Partners, had planned projects for last year and this, noting that the company's existing projects were curtailed up to 15%-25% in the second quarter.

The curtailment of power is the amount that could have been generated by solar or wind but was rejected pre-emptively because a grid reached?its limit.

He said on the sidelines the SNEC Photovoltaic Conference in Shanghai that "there's at least... 1,5 gigawatts" in Brazil where we planned to already start construction".

Renewable curtailment is a major bottleneck to development for a number of countries, including Australia, Japan and India.

MARKET DESIGN COMPOUNDS PAIN FOR STRUGGLING GENERATORS

The Brazilian grid operator may reject the output of renewable companies, and they will have to buy the power in order to meet their contracts. This can cost more than the amount contracted.

Barrera stated that the market design made the solar glut more painful in the fifth largest wind and solar -market.

"You are being restricted, but you buy energy at twice the price... this is what has been problematic."

Fitch Ratings gave negative outlooks to?11 Brazilian renewable projects last month, stating that curtailments would continue until 2030, and have an impact on cash flow, debt servicing, and liquidity. Fitch's average?curtailments for projects rated in 2025 increased from 6%-12% in 2024 to 7%-25%.

Barrera doesn't expect any changes to the current "market design" before 2028, with the elections scheduled for later this year. However, he predicts that curtailments will fall slowly as the pace of adding new solar capacity slows down and demand continues its growth.

The rapid growth of renewables, without the transmission lines to support it, has forced renewable companies to reduce their operations and lay off employees.

"The real problem is solar overcapacity." Barrera stated that even if Brazil's transmission problems are resolved, there will still be overcapacity and curtailment. (Reporting and editing by Edwina G. Gibbs; Sudarshan V. Varadhan, Colleen H. Howe)

(source: Reuters)