Wind-Farm Developers Win Biggest Share of Brazil Auction

June 7, 2014 by  
Filed under Green Energy News

Wind-farm developers including Casa
dos Ventos Energias Renovaveis Ltda were the biggest winners in
a Brazil power auction today after the government agreed to
raise the starting bid.

Developers won contracts to sell 968 megawatts of capacity
from 22 wind and large hydroelectric projects, with 551
megawatts coming from wind farms, Sao Paulo-based electricity
trading board CCEE said today on its website. Biomass, small
hydropower plants and thermoelectric plants weren’t included in
the event.

Brazil gets more than 70 percent of its energy from
hydroelectric dams, and is seeking to increase capacity and
diversify its power sources as the worst drought in more than 40
years cuts output. The government raised the starting price
after local-content regulations boosted the cost of equipment.
Brazil had the world’s cheapest wind energy in 2012.

Casa dos Ventos and other wind developers agreed to sell
electricity at an average of 129.97 reais ($57.89) a megawatt-hour, below a ceiling price of 133 reais. In Brazil’s energy
auctions, the government sets a ceiling price and developers bid
down the price at which they are willing to sell power. The
lowest bids win contracts.

Santo Antonio Energia SA also won the rights to expand its
Santo Antonio dam in the Amazon region, after bidding to sell
417 megawatts of capacity for 121 reais a megawatt-hour, the
ceiling for hydropower. The company received an injunction
yesterday blocking it from participating in the auction because
of questions about its environmental licenses. The injunction
was lifted today.

Solar Auction

Solar farms weren’t eligible to participate in the auction.
The government will award 20-year contracts for photovoltaic
plants larger than 5 megawatts in a so-called reserve energy
auction that will take place on Oct. 10. It will be the first-ever national energy auction with a separate category for solar
projects.

Only 22 projects participated in the auction, far less than
268 that were initially authorized to take part by Brazil’s
Energy Research Agency, known as EPE.

“The projects authorized for this auction are
automatically authorized for the two next ones,” Mauricio
Tolmasquim, the head of EPE, told reporters in Sao Paulo. “We
are going to see an increase of supply of wind energy in the
next auctions.”

To contact the reporters on this story:
Vanessa Dezem in Sao Paulo at
vdezem@bloomberg.net;
Mario Sergio Lima in Brasilia Newsroom at
mlima11@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Will Wade, Tina Davis

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