A thumping 29.7 GW of solar project capacity will compete in Brazil’s A-6 renewables auction

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Brazilian energy agency the Empresa de Pesquisa Energetica (EPE) has admitted 1,829 solar, wind, hydro and biomass projects with a combined capacity of 100.8 GW to the initial phase of the A-6 energy auction planned for September 26.

Of those schemes, 825 are solar projects with a total generation capacity of 29.78 GW. Wind has a 25.1 GW share from 845 projects.

The state of Bahia has the largest total capacity of solar schemes under consideration, with around 6.9 GW, followed by Piauí (6.8 GW) Rio Grande do Norte (5.2 GW), Ceará (3.1 GW), Pernambuco (2.7 GW), Minas Gerais (2.5 GW), Paraiba (727 MW), Mato Grosso do Sul (450 MW) and Tocantins (225 MW). With the numbers similar to those registered for the four-year-deadline A-4 auction, for which 26 GW of projects were pre-qualified, it seems likely that, in the majority of the cases, the same projects will have applied for both procurement rounds.

Longer term, lower price?

The projects selected in September’s auction must be grid connected and in operation by January 1, 2025, hence the A-6 appellation. That longer term for project completion may prompt developers to submit lower bids for the price they will accept for generated power, given expected continued price reductions for PV technology.

The auction will be the first time solar has been entitled to participate in the A-6 procurement.

This year’s A-4 and A-6 rounds are part of a three-year energy auction plan unveiled by the Ministry of Mines and Energy in March. That program included plans for six “new energy” auctions with the ministry scheduling two per year: the A-4 and A-6 procurement rounds. After June, A-4 auctions will be held on April 23 next year and April 29, 2021. The A-6 auction dates after September will be on September 24 next year and September 30, 2021.

In a recent interview with pv magazine, Rodrigo Sauaia, chief executive of Brazilian solar energy association ABSOLAR, analyzed the chances of PV in this year’s two energy auctions.