Brazil tenders the termination of 4.25 GW of renewables

ANEEL, the Brazilian Electricity Regulatory Agency has announced an unusual tender aimed to eliminate part of the excess capacity that Brazil has at the moment. The auction involves the termination of 4,248.5 MW of wind, solar and hydropower projects.

The auction, which is scheduled for August 28, involves 198 renewable energy projects, including 92 of wind, 82 of solar and 24 of hydropower schemes. 

The list of all generation projects that will participate in the process is available here.

Firms will bid for the right to cancel the licences, and the winners will be those that offer the government the highest termination fees, with a starting price of BRL 33.68 (US$ 10.6) per MWh. The fees, which will have to be paid in one instalment, will be calculated from the amount of energy in megawatts that each project would generate in one year.

To take part in this reverse auction, projects must have been secured during reserve energy auctions and cannot yet have entered into test operations. 

Once the projects have been formally cancelled, the government intends to pass them on to other companies in order to reignite investment in the sector, which has been hit by the country’s ongoing recession.

Firms that win this termination contracts will not be able to participate in the next two reserve energy auctions. 

As we reported in late May Brazil's renewable power generation company Renova Energia SA announced the cancellation of 188.2 MW of wind projects in Brazil. 

The company cancelled its Umburanas complex, with a total capacity of 178 MW, and the Alto Sertao III wind park of 10.2 MW. After terminating these contracts, the company has reduced its 2020 installed capacity target from 2 GW to 1.6 GW.

Brazil's renewables sector has grown rapidly in the last decade, boosted by cheap credit and high demand for power when the economy was growing. However, the fall in oil prices has weighed heavily on the country resulting in a recession.

We have lately informed about other renewable projects in Brazil: 

• 8 MW Sao Sepe biomass plant in the Rio Grande do Sul
• 30 MW Ventos de Santo Estevao IV wind project in Pernambuco
• 27 MW Ventos da Bahia VIII wind project in Bahia
• 9 MW Aura Mirim VIII wind farm in Rio Grande do Sul
• 27.6 MW Delta 3 IV wind farm in Maranhao
• 16.1 MW Delta VI wind farm in Maranhao
• 8.1 MW Ventos de Santo Albano wind farm in Piaui