President Lula signs law creating renewable energy generation from offshore wind turbines

President Luiz Inácio Lula da Silva signed Bill of Law No. 576 of 2021, which defines the potential for offshore energy generation. This renewable energy is harnessed through wind turbines installed on fixed or floating platforms anchored in the seabed. Offshore energy generation is regarded as a clean energy source that captures wind power, particularly in open waters, where the winds are faster, more consistent, and unobstructed, making it more productive than onshore wind turbines. Notably, the turbines installed offshore are typically larger than their onshore counterparts. The measure was published in an extra edition of the Official Gazette of the Union (Diário Oficial da União / DOU) this Friday, January 10.

The newly enacted law establishes Brazil’s regulatory framework for offshore energy production, outlining guidelines for harnessing the energy potential of areas under the Union's jurisdiction, including the territorial sea, exclusive economic zone, and continental shelf. The emphasis is on generating electricity from renewable sources.

INCENTIVES — The legislation further includes incentives to develop the national industry, create jobs, and strengthen the country's energy security by integrating economic and environmental considerations. To ensure the sustainability of related activities, it outlines requirements for the decommissioning of projects and the restoration of explored areas. It also mandates prior consultation with affected communities, fostering respect for traditional maritime practices and local culture.

REVENUES — Revenues generated from subscription bonuses, occupancy fees, and a proportional share of the energy produced will be distributed among the federal, state, and local governments. Investments must prioritize research, technological innovation, and sustainable development.

SHIFT IN STATUS — Brazil ranks sixth in the world in wind energy production. With the implementation of this new law, the country is poised to achieve a transformative shift in the generation of clean, renewable energy, which is in increasing demand. This legislation is expected to lower costs and invigorate the local industry. The energy source remains new to Brazil, with no platforms installed to date due to the absence of established regulations.

VETOES - The President's veto of Sections 22, 23, and 24 represent a course correction, eliminating provisions unrelated to offshore wind power that were absent from the original bill.

These sections did not align with the objectives of the sanctioned law; they sought to sustain more polluting, expensive, and inefficient energy matrices, such as coal and gas-based thermal power plants, while also proposing changes to tariff adjustment indices that would be less favorable to the public. In short, these measures would burden citizens financially and disrupt public accounts, with estimates indicating costs in the billions.

By enacting this law, the Presidency aims to position Brazil at the forefront of the global energy transition, aligning with key trends in renewable energy exploration and reinforcing the country’s commitment to environmental sustainability, economic development, and the reduction of regional inequalities.