Brazil has postponed, for a second time, an energy auction for new capacity to give developers more time to submit proposals for hydroelectric and fossil fuel-burning power plants.
As Brazil’s wind energy sector gets ready to build 2GW of capacity a year, Brazilian wind power association ABEEólica is studying proposals that would allow projects to be started up in blocks — potentially helping to avoid commissioning delays.
The auction for new capacity will take place Nov. 28, according to the country’s energy regulator Empresa de Pesquisa Energetica. It was initially set for Sept. 12, and then pushed out until Sept. 30.
“The government has two options: to do the auction in September and get mostly wind projects, or to wait until November and have the possibility of adding thermal and hydro plants,” Bernardo Bezerra, a manager at the Rio de Janeiro-based energy consulting company PSR, said in a phone interview yesterday.
Brazil, which gets more than 75 percent of its electricity from hydropower, is facing its worst drought in eight decades. That’s threatening the country’s generating capacity and driving up demand for new hydro plants.
Delaying the auction will let developers enroll four hydropower plants with about 460 megawatts of capacity, Marcio Zimmermann, executive secretary for the Ministry of Mines and Energy, said by phone on Sept. 2. That’s in addition to hydro facilities with 954 megawatts that have already applied to participate in the event.
Developers have enrolled 1,041 power plants in the auction with a total of 50.9 gigawatts of capacity. Most of that, 26.2 gigawatts, is for thermal power plants that will burn coal, natural gas or biomass. The event will also include wind farms with 17.4 gigawatts of capacity and 6.1 gigawatts of solar power.
“The government wants to give time for thermal projects to have conditions to be qualified for the auction,” he said in an interview.
In Brazil’s energy auctions, the government sets a ceiling price and developers bid down the price at which they are willing to sell electricity. The lowest bidders win long-term sales contracts. Projects in this auction must go into operation by January 2019.
The ceiling for thermal power is 197 reais ($87) a megawatt-hour, Romeu Rufino, head of Brazil’s energy regulator Aneel, said Aug. 26 at a conference in Brasilia.