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Wind Farms Dominating Brazil Power Auction Set for Record Year

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Nov. 18 (Bloomberg) -- Developers of wind farms in Brazil won all the contracts in an auction for new power capacity as turbine makers seek to supply South America’s biggest renewable-energy market.

Companies including Eletrosul and CEEE agreed to build 39 wind farms with a total capacity of 867.6 megawatts, the national energy agency Empresa de Pesquisa Energetica, also known as EPE, said today on its website. The developers will sell the projects’ energy to distributors at an average price of 124.43 reais ($54.87) a megawatt-hour.

Brazil looks set to auction more than 3,000 megawatts of wind farms in 2013, the most ever, Elbia Melo, president of the Sao Paulo-based wind energy trade group Associacao Brasileira de Energia Eolica, said today in a telephone interview. That will benefit turbine suppliers including France’s Alstom SA and Spain’s Acciona SA that are investing in factories to meet a local-content requirement.

The suppliers “need at least 2,000 megawatts of wind farms contracted a year to break even,” on their investments in new local manufacturing capacity, Melo said. “Brazil could see a record amount of wind farms contracted this year.”

Wind farms dominated because they’re quick to build and developers that signed contracts in the so-called A-3 auction are required to have power projects operating in less than 26 months, Melo said.

More than 10,000 megawatts of wind farms, solar projects, small hydroelectric dams and biomass plants were registered to participate in the auction, EPE said in a statement.

“This is the time for wind energy, there’s no doubt,” Mauricio Tolmasquim, president of EPE, was cited as saying in the statement.

Eletrosul, a unit of the state-run power utility, is officially known as Eletrosul Centrais Eletricas SA while CEEE is the Cia. Estadual de Geracao e Transmissao de Energia Eletrica.

To contact the reporter on this story: Stephan Nielsen in Sao Paulo at snielsen8@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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