Brazil awarded 20-year power supply contracts totaling 889.7MW of solar PV from 31 projects at an average price of R$215.12/MWh ($86.8MWh).
The price was 17.9% below the cap prices of R$262/MWh set by the government.
The cap price for this year’s auction was R$144/MWh and the projects contracted will have to start operation by 1 October 2017.
The result was below industry expectations. Elbia Melo, executive president of the Brazilian Wind Power Association (ABEEólica), had expected around 2 GW in contract awards at this auction, which also included solar and waste-to-energy projects.
She notes that some developers opted to bypass this auction to prepare for the next one in April 2015. Still, the auction result further consolidates the wind power industry in Brazil, Melo contends.
Wind energy accounted for 46% of the total 1.658GW contracted at this auction in which 889.7MW of power from solar projects and but no waste-to-energy projects sold any power. Overall, 626 wind power projects, with total capacity of 15.4 GW has been shortlisted for the auction.
In the A-3 auction in June this year, 551 MW of wind energy projects were contracted at an average price of $129.91MWh.
With today’s auction, Brazil has contracted 1.32GW so far this year. At the end of November, Brazil will hold the A-5 auction.
In 2017, 840.9MW will come on line from the two previous auctions. Brazil has 5GW of wind capacity in operation plus another 9GW due online by 2018.
Brazil’s Solar Power Association (Absolar) had expected contracts for between 500MW and 1GW.
This is the first time that Brazil holds a separate auction for solar power. This allowed projects to compete with each other instead of competing for contracts with other cheaper technologies such as wind and hydroelectric.
Pernambuco state held an auction at the end of 2013 – 122MW of solar power was sold at an average price of R$228.63/MWh
Despite good climatic conditions and one of the world’s highest solar irradiation levels, Brazil has only 14.6MW of solar power connected to grid and another 30 MW off-grid.
Though the government had included solar PV in earlier auctions – several projects were registered – low cap prices meant that no projects power. Developers there had wanted a minimum wholesale price of at least R$250/MWh.
Solar power accounted for 56% of the total 1.685GW contracted at Friday’s auction, which included 769.1MW of wind but no power from waste-to-energy projects.
Most of the solar power projects are located in the states of São Paulo, Bahia and Minas Gerais. Among winners are Brazilian and foreign renewable energy developers including Sowitec and Renova Energia.