Brazil cancels 308MW of PPAs

BRAZIL: Brazil's federal power regulator Aneel has held a "disengagement auction", cancelling the purchase agreements of approximately 308MW of wind projects.

Developers of more than 300MW of unbuilt capacity in Brazil voluntarily cancelled their power agreements (pic: Suzlon)

In a rush to cut losses tied up in stagnated projects, holders of power purchase agreement (PPAs) competed to rescinded contracts affecting 19 wind projects in Brazil, totalling 308MW.

Contracts for a further 250MW across six solar projects were also cancelled, bringing the combined total to 558MW.

Under Brazil's crippling recession many projects awarded construction permits some time ago have been stranded due to financing difficulties.

Aneel held the auction to bring closure to projects stuck since 2014.

Affected developers competed to pay the highest fees for rescinding contracts. They settled for a combined BRL 106 million ($33 million) across all 25 wind and solar projects to sever further commitments.

Those developers can not take part in further power auctions in Brazil for the next two years. They will, however, receive chamber of commerce aid to sell on any turbines purchased.

Aneel branded the process as mutually beneficial, with state energy planners raking in extraordinary funds as well as clearing doubts on a swathe of future capacity.

Nevertheless, the 557MW "disengaged" represents just 13% of the 4.25GW of capacity put under the hammer.