SAO PAULO, Dec 12 (Reuters) - Brazil's Senate approved a wide-ranging energy bill on Thursday that establishes a regulatory framework for offshore wind energy projects while including unrelated amendments promoting polluting energy sources like coal and natural gas.

Bill 576/21 sets rules for offshore wind energy, allowing the federal government to auction maritime areas for wind farms, a step considered essential for investors looking to advance wind energy projects.

Brazil has significant offshore wind potential, with 244 GW from over 100 proposed projects still in early stages.

In a tradeoff, the text also mandates the contracting of coal-fired thermoelectric plants in government auctions, extending contracts for these plants until Dec. 31, 2050.

The bill upholds a mandate from a previous law to contract natural gas thermoelectric plants, but sets new pricing, capacity, and location parameters for these plants.

It also includes the obligation for the government to contract energy from small hydroelectric plants (PCHs), liquid hydrogen produced from ethanol in northeastern Brazil, and wind energy parks in the south.

The bill will head next to President Luiz Inacio Lula da Silva for approval. The government has said he will veto the article that includes the fossil fuel incentives - a veto Congress could override.

The provisions for gas and coal-fired plant contracts have sparked warnings from the energy sector over billions of dollars in potential new costs to energy consumers.

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https://www.reuters.com/sustainability/climate-energy/brazil-lawmakers-approve-wind-energy-bill-that-includes-fossil-fuel-incentives-2024-12-12/