Brazil's Senate to Decide on Inclusion of Coal-Fired Projects in December's A-5 Energy Auction

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Researched by Industrial Info Resources Latin America (Cordoba, Argentina)--The Federal Senate of Brazil will discuss today whether coal-fired projects are to be included in next December's A-5 energy auction. After the earlier announcement of an A-5 energy auction that will not include coal-fired generation projects, several related sectors of the Brazilian economy decided to demand their participation.

Among the arguments behind this request is the fact that Brazil depends heavily on hydropower generation, which could result in a lack of generation during periods of low rainfall. While the world generates 42% of its energy with coal, Brazil only produces 1.3% of its energy from it. Therefore, an increase in coal use would lead Brazil to a more secure grid generation, and still would be able to produce using one of the cleanest energy matrices in the world.

Moreover, those who support the coal power generation argue that this promotes economic and social development in Rio Grande do Sul and other states in southern Brazil. The expected energy projects in the region will have a positive social impact, promoting job generetion by the growth of the industry, commerce and investments in infrastructure. In this case, the total investment would be about $7.5 billion and it would generate 5,000 direct jobs.

Among the projects that are in various stages of development, there are four coal-fired projects in Rio Grande do Sul that already have the possibility to participate in the auction of energy:

• Seival ($850 million), 600 MW of installed capacity
• MPX Sul ($850 million), 727 MW
• CTSul ($815 million), 700 MW
• USITESC ($956 million), 440 MW

For further information on the December 20th Auction, see August 31, 2011, article - Brazil's Ministry of Energy Sets Date for Electric Power Auction.

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