BlackRock's Atlas freezes $1B Brazil renewables investment

Key facts

• BlackRock's Atlas Renewable Energy paused $1 billion in new investments in Brazil.
• Curtailments for existing Brazilian renewable projects reached 15%-25% in the June quarter.
• Fitch Ratings assigned negative outlooks to 11 Brazilian renewable project finances.
• India's solar industry faces profitability concerns due to regulatory overhaul and slower grid expansion.
• New Indian rules include penalties for generators failing to meet committed supply.
• China is reportedly wasting significant amounts of wind and solar energy.
• Wasted Chinese green energy could be equivalent to France's energy needs.
• Australian wind farm developers report deteriorating economics for new projects.
• Rising construction costs and uncertain off-take markets hinder Australian wind projects.

Global renewable energy development is encountering substantial obstacles, leading to stalled investments and operational challenges. In Brazil, BlackRock's Atlas Renewable Energy has suspended $1 billion in planned new investments. This decision stems from periodic rejections of renewable power by the national grid operator and significant curtailments of existing projects, which reached 15%-25% in the June quarter. These issues have prompted Fitch Ratings to assign negative outlooks to the finances of 11 Brazilian renewable projects.

India's burgeoning solar power industry is also confronting profitability concerns. A recent regulatory overhaul, coupled with slower-than-needed grid expansion, is creating challenges for solar generators. New regulations impose penalties on generators that fail to meet their committed supply obligations. This has resulted in increased solar curtailments and raises questions about the continued rapid expansion of the renewable energy sector in the country.

Concurrently, China is reportedly wasting considerable amounts of wind and solar energy. This waste is attributed to inflexible grid management practices that prioritize coal power. The scale of this wasted green energy is significant, potentially equivalent to the energy needs of France, and occurs amidst a global energy shortage.

In Australia, wind farm developers are signaling a worsening economic landscape for new projects. They cite rising construction costs and an uncertain market for power off-take as key factors that are hindering final investment decisions. This combination of increased expenses and market ambiguity is making it more difficult to secure the necessary commitments for new wind energy developments.