Wind Energy Prices Lower Than Expected In Brazil Auction

Brazil’s A-3 energy auction, a competitive tender between several energy sources, took place on Aug. 17 and saw an average price for wind farm projects of below 100 reais/MWh (or less than $63/MWh), according to the Brazil Wind Energy Conference (BWEC). The overall average price was R$102.07/MWh, with 1.5 GW of energy contracted in the auction at a total price of R$29.14 billion.

The bulk of the energy offered during the auction was either wind power or natural gas. Of a total of 2.7 GW of potential capacity approved to participate, wind turbines represented 39% and natural gas represented 38%. In total, there were 51 successful participants, of which the large majority – 44 – were wind projects.

The key electricity utilities contracting to buy the energy included Companhia Energetica de Minas Gerais, which will buy 25.2% of the total; CPFL Piratininga, which will buy 11.07%; and Amazonas Energia, which will buy 10.81%.

The 44 wind farm projects have committed to supply a total of 1,068 MW of energy to the Brazilian electricity grid under the terms of the auction, at an average price of R$99.58/MWh, which was below the expected price. The average wind energy price was 23.1% below the average in 2010’s auction (R$130.86/MWh) and 28.36% below the maximum stipulated price, according to BWEC. The Reserve Auction, for wind power only, takes place today.