Brazil to hold 10 October PV auction
Brazil will hold a third power auction on 10 October and expects to award contracts for about 2GW of utility-scale solar PV projects, Recharge learns.
The Mines and Energy Ministry published the guidelines, confirming a report by Recharge in April that the reserve energy auction would be held and include that amount of solar power for development.
At that time, Maurício Tolmasquim, president of Brazil's federal energy planning authority (EPE), said the upcoming auction is part of the government's recent change in strategy to now promote solar power in the country.
Contracts for waste-to-energy and wind power projects will also be awarded in the reserve auction.
According to the guidelines, the three technologies will not compete. This will allow price caps to be set separately, taking into account technical and market specificity of each technology.
Only solar projects with 5MW capacity and above will be registered. The government will allow a fast track registration for projects already listed for the previous auctions this year.
The projects that win contracts at the auction will have to start production on 1 October 2017. Brazil now has about 10MW of solar installed capacity.
Investors in solar power hope the government will set a maximum price at R$250/MWh ($87.97) or above. Although Tolmasquim confirmed this price level as likely, government officials have recently said that R$200/MWh is feasible and could result from competition at the auction.
Brazil has been trying to introduce solar power through auctions since last year when about 2GW of solar projects were registered at the A-5 auction in the second half of 2013. None of the projects sold power since the price cap of R$122/MW was considered too low to make the technology feasible.
Companies like Renova Energia, CPFL Renováveis, Eletrosul and smaller developers like DyaSolar and Elements Empreendimentos em Sustentabilidade, among others, have been preparing for the solar auction.
Investors said the government needs to further define contract details and national content rules, moves that would encourage private sector investment.