By Sudarshan Varadhan and Colleen Howe
SHANGHAI, June 3 (Reuters) – Atlas Renewable Energy, one of South America’s largest clean power generators, has put plans for $1 billion in new investments in Brazil on hold as the national grid operator has periodically rejected renewable power, CEO Carlos Barrera said.
Atlas – owned by BlackRock unit Global Infrastructure Partners – had planned the projects last year and this year, Barrera said, noting that curtailments were as high as 15%-25% for its existing projects in the June quarter.
Curtailment refers to the amount of solar or wind power that could have been produced but was pre-emptively rejected because a grid hit its limits.
“There’s at least … 1.5 gigawatts that we put on hold in Brazil, where we had planned to already start construction,” he told Reuters on the sidelines of the SNEC photovoltaic conference in Shanghai.
Despite governments being keener to adopt renewables to shield their countries from supply disruptions due to the war in Iran, renewable curtailment remains a major bottleneck to development in a wide range of countries that also include Australia, Japan, India and Chile.
MARKET DESIGN COMPOUNDS PAIN FOR STRUGGLING GENERATORS
Renewable companies in Brazil which have had their output rejected by the grid operator can end up buying the replacement power to honour contracts at more than what they contracted to sell for.
That market design has made the solar glut in the world’s fifth-largest wind and solar market more painful, Barrera said.
“You’re being curtailed, but you’re buying energy at 2x the cost … that’s what’s been problematic.”
Fitch Ratings last month assigned negative outlooks for 11 Brazilian renewable project finances, saying curtailment would continue until 2030 and impact cash flow, debt servicing and liquidity. Average curtailments in projects rated by Fitch surged to 7%-25% in 2025 from 6%-12% in 2024.
Barrera does not expect changes to the current market design to be addressed ahead of 2028 with elections due later this year, but he forecasts curtailments to fall gradually as the pace of new solar capacity additions slows and demand continues to grow.
A rapid increase in renewables without transmission line buildout keeping up has pushed renewable companies to scale back operations and cut jobs.
“The real issue is overcapacity of solar. Even if you fix all the transmission issues in Brazil, you’re still going to have overcapacity, you’re still going to have curtailment,” Barrera said.
(Reporting by Sudarshan Varadhan and Colleen Howe; Editing by Edwina Gibbs)
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