Brazil sets $51/MWh solar ceiling price in A-6 auction

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Brazilian energy regulator ANEEL has set a ceiling price of BRL209/MWh ($51.21 or 0.05121/kWh) for the A-6 auction planned for October 18.

Wind technology was assigned the lowest ceiling price in the round, at BRL189/MWh. The highest maximum – BRL292 – was reserved for thermoelectric projects. The cap price of hydropower was slightly lower than that set for thermal, at BRL285/MWh.

In the A-4 auction – the figure refers to the number of years successful developers have to commission projects – at the end of June, the ceiling price for solar was BRL276/MWh. The exercise concluded with 211 MW of allocated PV generation capacity and a lowest electricity price bid of $17.30/MWh, which was at the time the lowest electricity price bid ever recorded for large scale solar in an energy auction. That landmark, however, was questioned by analysts who pointed out the bid in question concerned only half the power generated by the project, with the balance sold under a long-term private power purchase agreement (PPA) to an unspecified client – probably at a higher price.

For the next A-6 procurement ANEEL reiterated only hydropower projects will receive 30-year PPAs, with other renewables entitled to 20-year contracts. Brazilian energy agency the Empresa de Pesquisa Energetica has pre-selected 825 solar projects with a total generation capacity of 29.78 GW for the auction.

This year’s A-4 and A-6 rounds are part of a three-year energy auction plan unveiled by the Ministry of Mines and Energy in March. That program included plans for six “new energy” auctions with the ministry scheduling two per year: the A-4 and A-6 procurement rounds. The next A-4 auctions will be held on April 23 next year and April 29, 2021. The A-6 auction dates after next month’s round will be on September 24 next year and September 30, 2021.

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