Engie Brazil Delays New Wind and Solar, Eyes Hydro M&A as Curtailment Hits Cash

Overview

• The company said grid-imposed cuts continue to reduce cash generation from its wind and solar assets, despite recent capacity additions.
• In Q3, Engie’s renewable fleet produced an average of 430 MW, but 24% of potential output was curtailed, above the National Interconnected System’s 22% average.
• Executives said new greenfield wind and solar investments will be postponed, with curtailment risk now central to screening both projects and deals.
• Management will wait for clarity from Provisional Measure 1,304 and operational steps by Aneel and the ONS before resuming expansion decisions.
• Amid scarce opportunities, Engie is targeting hydropower M&A and recently bought the Santo Antônio do Jari and Cachoeira Caldeirão plants for about R$2.9 billion, adding 612 MW under regulated contracts; nationwide, curtailment of wind and solar hit a record 37% in October, according to Volt Robotics based on ONS data.