Joint venture between Gerdau and Shell Brazil brings solar energy to Minas Gerais state

RIO DE JANEIRO, BRAZIL – As far as Gerdau and Shell Brazil are concerned, Minas Gerais will have a solar energy joint venture. The companies announced the signing of a term of cooperation that establishes the premises for the joint discussion and constitution of a photovoltaic park in the municipality of Brasilândia de Minas, in the north of the state.

With an installed capacity of 190 MWdc, the Aquarii park will supply part of the clean energy to Gerdau’s steel production units and another part to be sold in the free market through Shell’s energy trader, starting in 2024.

The joint venture, in which both companies will have equal participation, is part of both companies’ energy transition and decarbonization strategy.

For Gerdau, it is one more step towards energy self-sufficiency and the strategic direction of entering the renewable energy generation segment, part of the portfolio of new businesses carried out through Gerdau Next.

For Shell Brasil, it represents a voluntary movement to offer more renewable and sustainable energy products and services, in total alignment with Gerdau’s search for a cleaner energy matrix.

Aquarii will also sell energy to free consumers, helping to increase the generation park in the state of Minas Gerais and contributing to the region’s energy security with more renewable energy.

“The joint venture for the development and operation of the Aquarii solar farm is part of a robust plan to invest in renewable energy in the Americas. The initiative strengthens the company’s long-term vision and commitment to the inclusion of ESG factors as fundamental pillars for the company’s strategic decisions,” says Juliano Prado, Gerdau Vice President and responsible for Gerdau Next, new business division.

“The partnership with Shell ensures expertise and cutting-edge technology in solar energy, which results in greater efficiency and an opportunity for self-production of renewable energy, reinforcing our commitment to an increasingly sustainable future.”

About three years ago, Shell Brazil began its strategy to organically develop its portfolio in solar power generation, which in the energy area adds to investments in its energy trader, Shell Energy Brazil, and the Marlim Azul thermoelectric plant. Today, the company has plans to develop solar farms in the states of Minas Gerais and Paraíba.

“This is Shell’s first solar energy project in Brazil, a milestone that further diversifies the company’s operations in the country and a manner completely aligned with our purpose of offering more energy more cleanly. The presence of a partner like Gerdau in this journey fills us with pride and is a sign of confidence in this purpose in Shell and its capacity as a developer of energy solutions for its customers,” says the director of Renewable Energy and Power Solutions of Shell Brazil, Guilherme Perdigao.

According to the National Agency of Electrical Energy (Aneel), solar energy is the fastest-growing energy source in Brazil, with a jump of 70% in the last year, equivalent to 7.5 GW or half the capacity of the Itaipu hydroelectric plant.

Currently, it represents 1.8% of the national matrix, a percentage that should increase in coming years. Brazil has solar irradiation levels among the highest in the world – the national territory receives more than 2,200 hours of insolation per year, equivalent to 15 trillion MW*, according to data from the National Institute for Space Research (INPE) – indicating the enormous potential of solar energy in the country.

WATER CRISIS IS DRIVING SOLAR INDUSTRY

Attracted by the increased demand for photovoltaic solar energy, 450 new companies launch into this market every month in the country, according to Absolar, an entity that represents the sector.

Between 2019 and 2020, the segment has an expansion of 60%. The water crisis is driving the market. Just until May 2021, the growth has already been 64%, says Rodolfo Meyer, Absolar’s advisor.

It is not only the fear of high electricity bills that stimulates demand. The fall in the price of equipment, which became 90% cheaper in the last ten years, combined with the increasing offer of financing lines, has made more people plan to generate their own energy.

With this, more and more entrepreneurs are betting on the sector. The Energy Brasil franchise ended 2020 with 300 units and reached 450 last June. The goal is to reach 600 by the end of the year.

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