Brazil

Brazil

Low demand forces Brazil tender postponement

BRAZIL: The Brazilian wind industry has been taken by surprise by a government decision to delay the next power auction to June.

The government today announced the postponement of this year's first power auction to from 22 March to 28 June and changed some of the rules for small-scale hydro projects with capacity up to 30MW.

It said there was a lack of demand from power distribution companies to buy power in March to be delivered on 1 January 2015. The government says it wants to give more time for power distribution companies to complete and reappraise demand studies.

The registration date has been extended to 28 March to allow new projects and also decided to allow small-scale hydro-electric projects in isolated areas to compete.

"The decision makes things a little complicated because we believe this reduces the time we have to start operations after signing contracts to less than three years," said Élbia Mello, executive president at the Brazilian wind power association Abeeolica.

Out of 25.85GW projects registered for the auction, over 13GW were wind. The maximum price was BRL 112/MWh ($64/MWh).

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