Brazil Rushes Debate to Include Coal-Fired Projects in Next A-5 Energy Auction as Sign-Up Deadline Approaches

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Researched by Industrial Info Resources Latin America (Cordoba, Argentina)--For the past few weeks, since the Brazilian federal government scheduled an A-5 energy auction for December 20, 2011, the country's power producers and coal miners have been on a quest to allow coal-fired power projects to be part of the auction.

Several events brought into the spotlight the importance of coal in power generation, as well as questions about whether power generation in the country is becoming too reliant on renewable energy sources. Brazil has 10 coal-fired generation facilities that account for 1.57% of total power production. Coal represents 1,944 megawatts (MW) out of the 123,729 MW that make up the generation matrix.

A meeting was held this week in the Brazilian Senate's Undercommittee for the Protection of Employment and Social Security, and then another public hearing took place in the Ministry of Mines and Energy to discuss the subject. During both events, it was mentioned that the coal industry is responsible only for 2% of Brazil's greenhouse gas emissions. The country has a target to reduce its industrial emissions by 20%.

Coal production and use are very important for the economy of the states of southeastern Brazil, where the nation's deposits are located. Approximately 50,000 jobs are directly linked to coal in the region.

The Minister of Mines and Energy, Edison Lobão, said Wednesday that he will bring the issue to the attention of President Dilma Rousseff in order to obtain a response about the inclusion of coal-fired projects. However, the outcome remains uncertain, as September 20 is the deadline to sign up for the event.

Projects totaling 2,400 MW are ready to sell energy at the A-5 auction, which means they already have their environmental permits. Almost half of this capacity, 1,040 MW, belongs to two projects that also have their construction permit, and are ready to begin construction. Those projects are the 440-MW Usitesc Power Station in Treviso, Santa Catarina, and the 600-MW MPX Seival Power Plant, which will be built in Candiota, Rio Grande do Sul.

For additional information, see related August 31, 2011- Brazil's Ministry of Energy Sets Date for Electric Power Auction and September 13, 2011, article - Brazil's Senate to Decide on Inclusion of Coal-Fired Projects in December's A-5 Energy Auction.

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