Brazil Allows Higher Prices for Thermal Projects in Next Auction

Brazil’s electricity regulator will allow developers of thermal power to sell energy at higher prices than wind, solar and hydropower plants at an auction next month.

Developers of plants that burn coal, gas or biomass will have power prices capped below 197 reais ($87) a megawatt-hour at a Sept. 30 auction, Romeu Rufino, head of the agency known as Aneel, said today at a conference in Brasilia.

Wind and solar developers must bid below 137 reais a megawatt-hour and hydro must sell below 158 reais a megawatt-hour -- prices that Rufino said were too low. The government is trying to attract more power projects after an extended drought in Brazil has forced the nation to rely less on hydro facilities.

“For thermal plants, the price is attractive,” said Helena Chung, a Sao Paulo-based analyst for Bloomberg New Energy Finance.

The so-called A-5 energy auction has 225 projects with a combined 6,102 megawatts registered to participate. The auction is for power from new energy projects that start operating by January 2019.