Brazil awards 574 MW (AC) of solar in A-4 power auction

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Brazil’s energy agency EPE, which is controlled by the Ministry of Energy and Mines (MME), has allocated around 574 MW (AC) of PV capacity in the A-4 energy auction for new power generation capacity.

According to information provided to pv magazine by Rodrigo Sauaia, the president of the Brazilian solar association ABSOLAR, solar was the prevailing source in the context with am 85% share, followed by wind power with 64 MW (AC) of assigned capacity, thermoelectric power relying on biomass with 25 MW (AC), and hydropower with only 11 MW.

Overall, the EPE has assigned 674 MW of renewable energy capacity in the auction. The agency had pre-selected projects with a combined capacity of 18.3 GW for the contest.

The final average price for all of the 20 solar projects selected in the auction was 145.78 BRL ($43.8)/MWh. The Brazilian energy regulator ANEEL had set a maximum price of 329.0 BRL ($100.0)/MWh for solar, thermoelectric and biomass projects. Only four Brazilian states will host PV projects selected in the auction: Piauí with 240 MW of assigned capacity, Pernambuco with 147 MW, Bahia with 122 MW, and Sao Paulo with 75 MW.

The A-4 tender will award 30-year PPAs to hydropower projects and 20-year PPAs to wind, solar and biomass power plants. Solar projects selected in the auction must be connected to the grid by the end of 2020.

Sauaia commented on these results, saying that the predominance of solar is welcome after two years of zero growth for the Brazilian PV industry. He stressed, however, that the lack of new capacity for the year 2019 and 2020, due to the cancelling of similar auctions in 2016, may lead to job losses in the local solar sector.

Sauaia added that the government must plan another auction with delivery date on mid or end of 2020. “Otherwise,” he said, “there is a significant risk of damage to the development of the local value chain, which already invested hundreds of millions in manufacturing capacity and believed in the government plans for the sector.” The association has urged the government to act promptly on the matter, “as time is running short for such a decision.”

The auction A-4 was the fourth held at a national level that has included the solar energy source. 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.

Another auction A-4 including solar was recently announced by the Brazilian government for April 4, 2018.