Brazil gets about 80% of its energy from hydroelectricity and is investigating the feasibility of diversifying its power supply with a record investment of 4.1 billion Real (US$2.5 billion) in wind farms this year.

This is a considerable advance on the 3.3 billion Real that Brazil’s development bank Banco Nacional de Desenvolvimento Economico e Social has approved for wind power since financing its first project in 2005. Brazil has organised three auctions in the last two years for developers of renewable energy projects to sign power- purchase agreements.

“The big benefit with wind is that you’re producing most energy during the dry season between May and Nov,” when hydro reserves may run low, Jorge Trinkenreich, director of the Rio de Janeiro-based consulting company PSR Consultoria said. Developers of wind energy projects received 69% of the contracts that were offered in two auctions last year, according to the national energy research agency Empresa de Pesquisa Energetica (EPE).

The high rate led Rio de Janeiro-based BNDES approved 1.2 billion Real for wind projects last year, more than any other energy source except large hydro power.

Developers will face stiff competition from gas plant developers in July’s power auctions. Natural gas comprised 39% of the projects registered to participate in the auctions, in terms of generation capacity, while wind accounted for 40%E. Developers signed contracts to sell 3.9 Gigawatts of wind power, or 3% of the country’s total grid capacity, in Brazil’s three last renewable energy auctions, according to electricity regulator Agencia Nacional de Energia Eletrica (ANEEL)