Three Energy Auctions in Brazil to Secure Growth in Power Generation for Next Five Years

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Researched by Industrial Info Resources (Sugar Land, Texas)--Brazilian companies in the power generation and transmission industry are awaiting three energy auctions in the third quarter of 2010. Energy supply contracts will be awarded to projects approved by EPE, a power research agency related to the Ministry of Mines and Energy (MME). The events have been named "Alternative Sources Auction," "Reserve Auction" and "A-5 Hydro Auction."

The Alternative Sources Auction will involve power generation projects based on non-conventional sources of energy: small hydroelectric projects not exceeding 30 megawatts (MW); biomass-fueled thermoelectric projects; and windfarms. The registration process ended two weeks ago, with a total of 39 projects representing a power generation capacity of 1,209 MW. That total comprises 26 windfarms (645 MW); seven biomass thermoelectric plants (429 MW); and six small hydroelectric projects (135 MW).

The auction will be held on August 19. Small hydroelectric and biomass-fueled projects that receive a concession contract must guarantee energy supply to the grid as of January 1, 2013. Contracts will be for a period of 30 years on hydroelectric projects and 20 years on thermoelectric projects.

The Reserve Energy Auction will be on August 18 and 19, and will award contracts to biomass-fueled projects, small hydroelectric projects, and windfarms that will operate at peak load--that is, basically on the demand of the energy authority during times of high consumption. Biomass-fueled thermoelectric projects with a start-up date in 2011 or 2012 will be tendered on August 18. The following day will be for all registered projects that begin commercial operation on January 1, 2013.

A total of 478 projects have been registered for the Reserve Auction, representing 14,529 MW. Out of those, 399 are windfarms (10,569 MW), 61 are biomass thermoelectric (3,706 MW), and 18 are small hydroelectric projects (255 MW). Any projects registered for participation in the Reserve Auction are automatically registered for participation in the Alternative Sources Auction. The same project cannot take part in both auctions.

Finally, on July 30, the A-5 Hydro Auction will be performed. This event is intended exclusively for hydropower generation projects, including those of less than 30 MW. Projects that are awarded energy supply contracts during this auction must begin commercial operations in 2015.

The hydroelectric power projects that will be put up for construction tenders are the 177-MW Garibaldi, 153-MW Ferreira Gomes, and 342-MW Colíder. The opening bids for these projects at this price-descending auction was fixed at 133 reais (US$74.85) per megawatt/hour (MWh) for Garibaldi; 83 reais ($46.71) per MWh for Ferreira Gomes; and 122 reais ($68.66) per MWh for Colíder.

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