Wind energy in Brazil is among the cheapest sources of power

Enercon GmbH’s Wobben Windpower is losing contracts in Brazil after tax authorities canceled some exemptions for wind power manufacturers in the country.

The Brazil unit of Germany’s Enercon had a single customer so far this year, Mathias Moser, a vice president of Wobben, said. The company had considered leaving South America’s fastest-growing market after Brazilian tax authorities in April removed a tax incentive and required wind turbine makers such as Wobben, Spain’s Gamesa Corp., Tecnologica SA and Denmark’s Vestas Wind Systems A/S to pay back taxes for the exemption.

“This is definitely a restructuring year for us in Brazil,” said Mathias, who came to the country in April amid a management change.

Enercon, based in Aurich, Germany, decided to stay in Brazil last month after filing an appeal on the tax incentive ruling, according to Mathias. He didn’t disclose how much the company owes in back taxes. Brazil is seeking the previous five fiscal years of back taxes for the exemption.

“We have always produced in Brazil, so we have had the benefit for many years,” Mathias said. “It is a lot of money.”

Wobben started manufacturing wind turbines in Brazil in 1995, the first wind turbine maker to install a facility in the country. It has four facilities in the country, and has the capacity to produce as many as 200 wind turbines at its Sorocaba plant in Sao Paulo state. In its sole contract this year, the company delivered 23 wind turbines for Elecnor SA of Spain’s wind farm in southern Brazil.