Published on August 12th, 2014 | by Mridul Chadha


Over 26 GW Of Wind, Solar Power Capacity Offered For Brazil’s Upcoming Auction

August 12th, 2014 by  


Rio Grande du Sul Wind Farm via Wikipedia

Brazilian renewable energy auctions continue to attract impressive amounts of capacity from project developers. Following an overwhelming interest shown by project developers earlier this year, the government has received a great response for a reserve auction as well.

Project developers have offered to sell electricity from a total of 1,034 projects with a cumulative capacity of almost 26,300 MW. These include 626 wind energy projects with total capacity of about 15,350 MW, 400 solar power projects with total capacity of 10,790 MW, and eight projects of biogas/municipal solid waste-based power with total capacity of about 150 MW.

Projects will be chosen on the basis of the lowest tariffs offered by the developers. The project developers will be required to sign medium- to long-term power sale agreements, and will have to supply power from 2017 onwards.

This reverse auctioning scheme has yielded impressive results, and has led to significant reduction in power costs. During the feed-in tariff regime in place between 2002 and 2006, the tariffs for wind energy projects was $150 per MWh. About 1,100 MW capacity from wind, small hydro and biomass power was contracted through this feed-in tariff scheme.

Following the launch of reverse auctions for power projects, which also includes fossil-fuel based technologies, the cost of wind energy dropped drastically. From $150 per MWh under the feed-in tariff regime, the tariff dropped to $53 per MWh in 2011 auctions. During the auctions in 2009, 2010 and 2011, a total of 6.73 GW of wind energy capacity has been contracted.

The government had also invited developers to participate in an auction in February. Although the auction has been postponed to September 30,  it received tremendous response. A total of 1,041 power projects with cumulative capacity of about 50,900 MW had offered to sell their electricity. These included over 700 wind projects with about 17,400 MW capacity, and over 230 solar power projects with about 6,300 MW capacity.

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About the Author

currently works as Head-News & Data at Climate Connect Limited, a market research and analytics firm in the renewable energy and carbon markets domain. He earned his Master’s in Technology degree from The Energy & Resources Institute in Renewable Energy Engineering and Management. He also has a bachelor’s degree in Environmental Engineering. Mridul has a keen interest in renewable energy sector in India and emerging carbon markets like China and Australia.

  • Rob G

    I had to look twice 26GW! for Brazil I had initially thought it said 26MW at a quick glance. Nice to see Brazil entering the renewable race at long last.

  • BZ hydro

    Not the perfect time to build wind in Brazil, considering some 20 GW of new hydro is supposed to become operational in the next year or two. Yes, this is for 2017, but a couple of years after that there will be more demand again.

    • JamesWimberley

      Emphasise “supposed”. That would be mainly Belo Monte, with a 40% capacity factor because of irregular river flow – exacerbated by drought. The interesting question is whether the practically limitless availability of cheap wind electricity at a similar capacity factor, much closer to where most Brazilians live, will finally kill off dreams of further megadams deeper inside the suffering Amazon forest. With so much existing hydro they can ignore any but local grid integration costs.

  • JamesWimberley

    The open auction is only pro forma for solar, which is still much dearer than wind in Brazil. The big news for solar was the announcement of the first solar-only auction in October, intended at last to grow the sector. Trade sources expect that solar contracts will be awarded around 250-300 reais ($110-$132) per mwh (link), around twice the going price (R$126/mwh) in the last open auction, won entirely by wind and hydro projects.

    The government won’t buy anything like 26GW. The last auction in June (link led to under 1 GW of contracts.

    Stringent local content requirements have kept wind prices from falling to US levels, and are keeping solar prices higher as well.

    It’s Rio Grande do Sul.

    • Matt

      yes it isn’t the amount that people want to build 26-50GW but how much the government will accept contracts for. 1GW last time, even it they double then 2GWs.

    • allenrobinson613511

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