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Brazil contracts 1.5GW of new wind capacity

BRAZIL: Brazilian wind power developers sold 1.5GW in power from new projects at an average price of BRL110.51/MWh, with delivery due to start in September 2015.

North-eastern state of Bahia will get the lion's share of Brazil's new wind projects
North-eastern state of Bahia will get the lion's share of Brazil's new wind projects

The price represents a 25% increase over the BRL87.94/MWh from the last auction in December 2012 but Brazil's currency has devalued 15% against the US dollar in that time, which equates to a rise of only 8.5% — to $46.65 from $43/MWh.

A total of 66 projects will be built by companies that sold power at the auction on 24 August, among them Brazil's Renova Energia and Enerfin (controlled by Spain's Elecnor). The companies signed 20-year contracts with local power distribution companies.

Total investment to build all 66 projects is projected at BRL5.5 billion, roughly BRL3.6 million per MW. Most of the new potential will be located in the north-eastern state of Bahia, with 587MW in 28 projects.

The government set new rules for this year's auction. Only firms with guaranteed connections to grid could sell power, and they had to show a 90% certainty that the power would be generated.

"This brings Brazil's wind power sector to a more rational trajectory for prices," said Elbia Melo, executive secretary at the Brazilian Windpower Association (Abeeolica). "The amount of power sold was close to the 2GW a year the sector needs to keep things running."

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