Brazil's A-4 New Energy Auction's results have been announced with the government finally contracting 401.6 MW of total capacity. What has made news, apart from the fact that out of more than 51 GW bids a little over 400 MW was finally contracted but that will come later, is that solar PV secured lowest winning bid of BRL 64.99 ($16.9) per MWh and an average winning bid price of BRL 67.48 ($17.5) per MWh which is the lowest the country has ever seen for solar PV tenders or for that matter even the world.
This is remarkable as benchmark tariff for solar PV technology for this auction was set at BRL 276 ($68.57) per MWh (see BRL 276/MWh Solar Tariff Cap For Brazil's A-4 Auction).
A tweet by the Founder and Chairman of the Advisory Board of Bloomberg new Energy Finance Michael Liebreich, probably covered by all media houses, summed it up when he wrote, "PV at 1.65c/kWh-the cheapest power from any technology ever, anywhere in the world, in the history of the plant (assuming it is confirmed subsidy-free)."
Other than this, the auction was a dampener as total awarded bids added up to only 401.6 MW, way less than the more than 51 GW registered. Wind and solar PV projects had each got 751 projects with 23.11 GW and 26.25 GW of capacity registered, respectively. However, finally wind secured 95.2 MW cumulative capacity out of 401.6 MW and solar with 6 projects claimed the largest share at 203.7 MW.
Among a total of 15 projects selected, other winners were hydroelectric plants with 81.3 MW capacity, biomass with 21.4 MW capacity. All the plants awarded are expected to generate an investment of BRL 1.89 billion ($490 million) and will need to start commercial operations beginning January 2023. For solar and wind power plants, power purchase agreements (PPA) will be valid for 20 years.
According to the Chairman of the Board of Directors at Brazilian electric energy market operator Câmara de Comercialização de Energia Elétrica (CCEE), Rui Altieri, "We noticed a tendency of solar and wind projects to allocate about 70% of their physical guarantee to the free market. In this way, besides the price negotiated in the auction, it is necessary to consider the commercial strategies of each company. But it is important to signalize the free market to help in the expansion of the system."
Among winners are Iberdrola of Spain, Voltalia of France and local companies Celesc and Cemig, reported Reuters. Details of the winning projects are available on the website of country's Energy Research Company (EPE).
Now all eyes are on A-6 New Energy Auction scheduled for October 17, 2019 that has registered more than 1,800 projects with total bids of 101 GW and solar PV's share is 29.78 GW (see Over 100 GW Bids For Brazil's A-6 Oct 2019 Auction).
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