Grid delays threaten next energy auction

BRAZIL: Brazil's federal government is undecided about implementing rules to avoid delays in the grid connection of new wind farms. Projects with no connection could be barred from the forthcoming energy auction.

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The gap between the conclusion of projects and the construction of transmission lines in the north-eastern region resulted in wind farms with a total capacity of 670MW being unable to connect to the grid.

Grid developers planning to connect the projects have faced delays in licensing and other red tape. They announced the connections would only be ready in 2013.

The government has recognised the problem, but there is no consensus about the solution.

The Mines and Energy Ministry is suggesting that only projects with established connections be allowed to bid at the auction, said planning and energy development secretary Altino Ventura.

But Mauricio Tolmasquim, president of the Energy Planning Company (EPE), which is also controlled by federal government, will not support that proposal because it would reduce competitiveness. He prefers to look at developers' performance history.

"We could bar companies that are behind schedule or have delayed the conclusion of other projects," he said.

EPE proposes rules and officially registers bidders at the annual government-sponsored auctions. The rules have to be approved by national power regulator, Aneel.

Tolmasquim also dismissed a plea by states in the north east for the construction of a transmission line across regions most likely to host new wind farms.

Auction A-3, so-called because projects commissioned under it have a delivery time of three years, and auction A-5, with a delivery time of five years, were scheduled for October. But both have been delayed until mid-December due to a lack of certainty over demand growth and a default of thermoelectric projects, which had been commissioned under earlier bidding rounds.

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