Photographer: Dado Galdieri/Bloomberg

Brazil Is Said to Offer Up to 9 Gigawatts in Energy Auctions

Updated on
  • Government plans two December events, one just for renewables
  • Wind-power plants are expected to dominate both auctions

Brazil is planning to award contracts for as much as 9 gigawatts of new generating capacity in a pair of power auctions scheduled for December, according to a person with knowledge of the process. The bulk is expected to go to wind farms.

The first event will feature contracts for 1.4 gigawatts to 2 gigawatts of capacity, and the second event will be bigger, with developers bidding for 5 gigawatts to 7 gigawatts, according to the person, who asked not to be identified because the information isn’t public.

The scale of the two auctions will be welcome news to renewable energy developers and suppliers. Last December, the government canceled what would have been 2016’s only auction solely for wind and solar energy, and hasn’t held any since. Companies seeking to build power plants have been hobbled by the lack of details regarding future demand, while turbine companies faced the prospect of halting production lines after their current crop of orders dries up.

The December auctions will offer contracts to sell power from new plants that go into operation in 2021 and 2023. The first will be open only to renewable-energy projects, and the other will accept bids from both clean and conventional sources. Power distributors in Brazil are expected to provide more details soon about the amount of capacity they expect to need, according to the person. 

The decision to cancel last year’s auction resulted from a growing electricity surplus as Brazil grappled with the worst recession in a century. With the economy now starting to improve, the government expects energy demand to increase next year, driving demand for power plants, according to Paulo Pedrosa, executive secretary for the Ministry of Mines and Energy.

Two new auctions are also scheduled for 2018, with one penciled in for the start of the year, according to Pedrosa.

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