Empresa de Pesquisa Energetica (EPE), the Brazilian energy agency, has announced the results of an energy auction held by the Chamber of Commercialization of Electric Power (CCEE) on May 31 for the isolated power system of Boa Vista and connected localities in the northern state of Roraima.
The CCEE has contracted nine projects representing 294 MW of generating capacity, or 6,402.5 GWh, starting from June 28, 2021. Overall, the new projects will be deployed via an expected aggregate investment of $414.5 million, the EPE said. The agency had previously pre-qualified 156 projects with a combined capacity of 6 GW for the auction.
“The developers’ interest in presenting alternative solutions to diesel oil showed that there is space for renewable sources to enter into the isolated systems in a competitive way,” the EPE said in its statement.
Renewable energy developers were able to secure seven of the awarded projects, including four biomass projects totalling 40 MW in the northern part of Roraima, as well as another biomass project and a hybrid biomass-PV project in the state’s southern region. Other projects included a hybrid biomass-solar-plus-storage installation in Boa Vista, the state capital. However, the biggest power plant selected in the auction is a 126.2 MW gas power facility to be fueled with natural gas that will be locally outsourced in the Amazonas region.
Projects relying on renewable energy will be awarded 15-year PPAs, while those using diesel oil will secure seven-year contracts. The auction concluded with an average price of $213.60/MWh, registering an average discount of 22.7% in relation to the ceiling price of $277.48/MWh.
The Brazilian government aims to facilitate the development of new power generation capacity in the region after 2021, when supply contracts will expire for the state’s largest electricity provider, Venezuela-based Corpoelec. Instead of relying on power supplies from unstable areas, the Brazilian authorities have shown a preference for the deployment of new generating capacity with an increasing share of clean energy.