Average solar power price in Brazilian A-6 auction reaches $20.52/MWh

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The Brazilian government awarded 20-year power purchase agreements to 11 solar projects in the A-6 energy auction held in São Paulo on Friday.

Through the procurement exercise – termed A-6 because successful projects have six years to come online – the Brazilian government allocated 2,979 MW of generation capacity, of which 530 MW was solar. Wind power projects secured the largest allocation, with 1,040 MW of generation capacity, ahead of 734 MW of gas-fired power. Hydro trailed solar, with 445 MW of capacity, and biomass projects secured 229 MW of the capacity available.

The largest four successful solar projects each had a generation capacity of 75 MW, one had a 60 MW rating, five were 30 MW in scale and the smallest was 20 MW.

The final average electricity price for solar was BRL84.39/MWh ($20.52), the lowest among the competing technologies. Wind recorded an average final bid of BRL98.89/MWh, followed by hydropower (BRL157.08), biomass (BRL187.90), gas (BRL188.87) and small hydro (BRL232.05).

Solar wins price contest

The auction’s overall average price was BRL176.09/MWh. The projects selected must be operational by January 1, 2025.

Brazilian energy regulator ANEEL had set a ceiling price of BRL209/MWh for the auction – a figure apparently exceeded by at least some of the successful small scale hydro projects. State energy agency the Empresa de Pesquisa Energetica had pre-selected 825 solar projects for participation in the tender, with a total generation capacity of 29.78 GW.

Friday marked the first time solar was entitled to participate in an A-6 energy auction. This year’s A-4 and A-6 rounds are part of a three-year plan unveiled by the Ministry of Mines and Energy in March.

In the – four-year-commissioning –  A-4 auction held in late June, the government allocated 211 MW of solar generation capacity and the lowest electricity price bid came in at $17.30/MWh. At the time, that was the lowest electricity price ever recorded for large scale solar in an energy auction. Analysts, however, have disputed whether that figure will represent the actual final price, given a large proportion of the electricity generated by the project in question appears likely to be traded on the spot market.