Brazil’s Cemig launches another wind, solar auction

Brazilian power company Compañía Energética de Minas Gerais S.A. (Cemig) – the fourth largest energy company in the country – announced that it will hold another auction for large-scale wind and solar power projects on June 14.

According to the auction announcement, the company will award 10-year and 15-year power purchase agreements (PPAs) to projects exceeding 50 MW in size through this new procurement exercise. No information was provided on the total capacity that will be assigned through the auction.

Cemig will sell electricity from the contracted wind and solar energy facilities to the Brazilian Free Electricity Market (Mercado livre de eletricidade). In this market, the power providers negotiate the conditions of the electricity sale between themselves, or directly with large energy consumers.

During the first auction of this kind, held in June 2018, Cemig contracted 431 MW of solar and wind capacity. In the second procurement exercise, held in early October, the power company contracted another 152 MW for wind and solar power. In a third auction held in 2019, the energy provider contracted 179 MW.

The tender rounds were introduced to replace 2,908 MW of generation capacity which Cemig lost in 2018, when concessions at four Brazilian hydropower plants were renewed and it lost out to international rivals including Engie, Enel and China’s State Power Investment Corporation. The hydropower facilities are in São Simão (with 1.7 GW of generation capacity), Miranda (404 MW), Jaguara (424 MW) and Volta Grande (380 MW).