• Brazil has canceled 25 solar and wind power projects it awarded in renewable energy auctions
  • This includes 16 wind power projects and 9 PV plants
  • Under Reserve Energy Disengagement Mechanism, firms express their inability to develop these projects owing to financial issues
  • Government has collected BRL 105.9 million ($33.43 million) in cancellation fees from these developers
  • Dropouts will not be allowed to participate in future renewable energy auctions for the next 2 years

Brazil’s National Electric Energy Agency (ANEEL) has canceled 557.4 MW solar and wind power capacity at the behest of concerned developers. This withdrawal was carried out under the so-called Reserve Energy Disengagement Mechanism operated by the Electric Energy Trading Chamber (CCEE).

The government will collect BRL 105.9 million ($33.43 million) in cancellation fees.

The 16 canceled wind farms represent 307.7 MW, while 9 PV plants account for 249.7 MW of installed capacity. The Ministry of Mines and Energy (MME) allowed these auction winners to cancel their capacities in the ‘cancellation round’ after they expressed their inability to build the projects due to financial constraints, according to Reuters.

Slumping demand, rising construction costs and reduced credit availability are the reasons mentioned in the Reuters article for the country’s power sector going through this period.

Although the company names of the dropouts were not published, they will be barred for 2 years from participating in any new auction round. Brazil recently announced two auctions scheduled for December 2017 of which one will include solar (see Brazil Announces PV Auction For Dec. 2017).

From the official statement it was not clear as to what the ministry’s plans are with regard to the canceled capacity.