Brazil sets ceiling price of $100/MWh for PV in power auction to be held in December

The Brazilian energy regulator ANEEL has published the bidding terms of the power auction Nº 04/2017 (auction A-4), which will be held on Dec. 18 and will also include solar among other energy sources.

The ANEEL has set a ceiling price of 329.0 BRL ($100.0)/MWh for solar, thermoelectric and biomass projects, while wind and hydropower project developers will have to submit bids with a maximum price of 276 BRL ($83.9)/MWh and 281 BRL ($85.4)/MWh, respectively.

The ceiling price of solar is slightly higher than the maximum price of 320 BRL/MWh that ANEEL had set for the auction that was planned for December 2016 and which was then cancelled due to an expected power oversupply in Brazil. By way of comparison, the ceiling price of solar in Brazil’s latest power auction including solar, which was held in November 2015, was 381.0 BRL ($115.8)/MWh.

Solar projects selected in the auction A-4, which must be connected to the grid by the end of 2020, will be granted a 20-year PPA. The government-run agency Empresa de Pesquisa Energética (EPE) has revealed in September that it has pre-selected 550 PV projects with a combined capacity of around 18 GW for the auction.

The auction A-4 will be the fourth to be held at a national level that includes solar. In the three auctions held by the EPE between 2014 and 2015, around 3 GW of large-scale PV capacity was allocated. According to ABSOLAR, approximately 850 MW of PV power plants selected in these auctions will be operational by the end of 2017.