Brazil has cancelled its solar and wind tenders scheduled for 19 December amid worsening economic conditions and electricity distribution companies with more contracted power than they need.

As a result no new wind or solar projects will receive contracts this year, a cause for concern for the country’s supply chain.

The decision was made Tuesday by the government’s energy planning council (CNPE), after new data revealed that power distributors have contracted for 9GW more power than they will need through 2020. 

But speaking through a spokesperson, Paulo Pedrosa, executive secretary at Brazil’s mines and energy ministry, stressed that the decision to cancel the tender will not affect the country’s long-term renewable-energy policies, which aim to double non-hydro renewables by 2030.

Regular tenders for renewables capacity will probably be scheduled again in 2017, the spokesman tells Recharge.

Brazil’s power demand has been shrinking since 2014, and it fell 1.1% in the year to October 2016 compared to the same period last year.

The cancelled tender presents a new risk for Brazil’s wind and solar industries, shortening the market’s visibility. Brazil has 8GW of contracted wind to be built by 2019, on top of the 11GW already installed, and another 3GW of solar to be built by 2018.

The local renewables sector had been expecting an average of 2GW of new wind and 1GW of new solar to be contracted each year.

The six wind turbine manufacturers in the country – Gamesa, GE, Enercon, Acciona, Weg and Vestas – have a combined production capacity  of around 3GW.

On the solar side, Canadian Solar and Flex this week started operations at a 400MW module-assembly plant.

Brazil’s annual wind auctions began in 2009, and solar tenders commenced in 2014. To date, 19GW of wind and 3GW of solar has been contracted through the auctions.