Brazil

The plant, which consists of a 300 kW solar installation and a 1 MW storage system, was built by local power utility Cemig in partnership with Grupo Algar. The project is located in Uberlândia, in the state of Minas Gerais, which is the Brazilian region with the highest penetration of solar and renewables – and a grid that is in a urgent need of improvement.

The auction is intended to replace the loss of the concessions for four hydropower plants, which represented 30% of the company’s power generation capacity. Selected projects will be granted a 20-year PPA.

The strong performance delivered by PV in Wednesday’s auction has demonstrated the solid market fundamentals of Brazil’s solar sector, and an improving competitive landscape. The winners of the auction included both major international players and local companies. Despite the auction’s surprising outcome, which was also driven by cheaper equipment and a stronger Real, PV technology will not be included in the upcoming A-6 auction.

The Chinese energy infrastructure developer, which is already building a transmission line in the north of the state, has planned to build several large-scale solar facilities across the region, the first of which is expected to require an investment of over US$300 million.

The Brazilian government is planning to resort to renewable energies to meet power demand in the non-interconnected areas in the north of the country. Meanwhile, another Brazilian state, Santa Catarina, has decided to introduce the ICMS exemption for solar DG.

In an interview with pv magazine, head of the Brazilian government-run energy agency EPE, Luiz Augusto Barroso explains how the newly-implemented mechanism for power auctions was conceived for ensuring a more market-oriented approach and increasing competition. Barroso adds that the upcoming A-4 auction, which includes solar, may have a slightly bigger outcome than the auction held in December, and that the inclusion of solar in the A-6 auction, which is expected to be held in the second half of this year, is being considered.

For the A-4 April auction, the Brazilian regulator ANEEL has already pre-qualified solar projects with a combined capacity of 20 GW. The maximum price for wind projects has been set at around $79/MWh.

The renewable energy unit of the Brazilian power distributor, CPFL Energia is the largest shareholder in the country’s distributed solar energy business. The Initial Public Offering (IPO) from the Chinese utility, however, has been deemed too low by the Brazilian securities market authority.

The $110 million project is expected to generate 220 GWh per year.