Brazilian Auction Awards 861 MW Capacity

A-5 New Energy Auction Of Brazil Selects 236 MW Solar PV Capacity

Brazilian Auction Awards 861 MW Capacity

With 94 GW registered for the A-5 energy auction of Brazil, winning capacity was only 861 MW, with solar’s share being 236.4 MW. Average winning tariff for solar came down 12.6% from the limit to BRL 166.9 per MWh. (Source: Ministry of Mines and Energy)

  • Brazil’s A-5 energy auction on September 30, 2021 saw around 861 MW capacity being selected
  • Solar’s share in the mix was 236 MW, while wind energy secured 161.3 MW capacity
  • Wind and solar energy projects will be contracted for 15 years and these need to be commissioned by January 2026

Having concluded the country’s A-5 New Energy Auction on September 30, 2021, Brazil’s Electric Energy Trading Chamber (CCEE) has selected 40 new electricity generating plants with a combined capacity of 860.8 MW. The winning capacity represents more than BRL 3 billion ($545 million) worth of investments.

Maximum capacity (301.2 MW) was won by biomass projects, followed by wind energy solar (236.4 MW) and wind energy facilities (161.3 MW). Hydroelectric projects secured 141.9 MW, while a solid waste power generation project secured 20 MW capacity.

It comprises 20 solar energy projects with 236.4 MW capacity with an average tariff of BRL 166.9 ($30.6) per MWh. The tariff for solar PV technology was capped at BRL 191.0 ($35.0) per MWh which means there was a reduction of over 12.6% from the capped tariffs.

In comparison, average winning tariff for wind energy projects was BRL 160.4 per MWh, having come down 16% from the tariff limit.

All wind, solar PV, hydroelectric and thermoelectric power plants selected in the auction are scheduled to come online by January 2026. For wind and solar projects, the contracting period is 15 years.

Details of auction results are available on the Ministry of Mines and Energy’s (EPE) website.

However, the results of this auction show a subdued interest or so it seems since the total registered capacity for it was around 94 GW in the form of 1,694 projects. Back in August 2021, the country’s National Electric Energy Agency (ANEEL) had said 835 solar projects made up this capacity with over 32 GW capacity (see ANEEL Registers Around 94 GW Capacity For A-5 Auction).

BNamericas quoted local research company Thymos Energia as attributing the outcome of the auction to ‘uncertainties’ related to the country’s economic growth prospects and impacts of the expansion of free power and distributed generation markets. It makes the distributor not the big buyer any more.

Local solar association ABSOLAR pointed out the ‘worrying’ part of the auction as the ‘more expensive’ biomass capacity share being the largest with average winning tariff of BRL 271.3 ($50) per MWh. ABSOLAR stressed the government needs to increase the share of solar sources in Brazil to diversify the electrical matrix, increase power supply security and alleviating hydropower reservoirs in the time of water crisis.

Nonetheless, the government is not concerned about the response. “We consider that the auction was very successful, considering the contracting of all the demand declared by the distributors. The registration of projects by EPE showed the interest of entrepreneurs in participating in the event and the level of competition,” explained Executive Manager of the regulatory agency’s Auctions Executive Secretariat, André Patrus. “This offer will likely be reflected in good competition and good discounts in future auctions as well.”

About The Author

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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