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Brazil

Brazil

Brazil's wind power prices reach new record low

BRAZIL: Companies have tendered a record low average price of BRL87.94 per/MWh ($42.2) in Brazil's latest wind power auction, 16% below the average price of BRL 105.12/MWh at the last comparative auction in 2011.

A total ten new wind projects with a combined installed capacity of 281.9MW were contracted, adding to 8GW already commissioned through auctions in Brazil.

The winners were Brazil's Bioenergy (awarded 28.8MW in seven projects), Renova (with 22.4MW in one project), Spain's Enerfin (with 28MW in one project and Italy's Enel Green Power (29.9MW).

Bioenergy tendered the lowest price at BRL 87.70/MWh. The highest price was BRL 89.20, sold by Enel.

Companies now have until January 2017 to start delivering the power in 20-year contracts.

Wind projects accounted for 49% of total power sold this year. The remaining power came from two hydroelectric projects with prices of BRL95.31/MWh and BRL92/MWh.

"The low price was a positive surprise," said Maurício Tolmasquim, president of the government's energy planning company. "We are now below BRL90, very cheap in international terms".

According to Tolmasquim, the record low price was probably due to the quality of projects, detailed wind measurements, proximity to existing projects or grid connections and scale by some of the developers.

"A weaker local currency and local content rules led to me to expect higher prices, but this was not the case", said Tolmasquim.

He will now plan for new auctions in early 2013 for start of operations in 2016 and 2018, when at least 2000MW will be sold. He will also plan for new transmission line auctions next year to connect the ten projects auctioned today.  

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