Challenge to Proinfa program legality causes chaos

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The wind energy segment of Brazil's government led renewable power program, Proinfa, is teetering on the edge of collapse after being swamped by legal challenges. The government published a preliminary list of 27 Proinfa wind projects with a combined capacity of 1100 MW on June 30 (Windpower Monthly, July 2003). Two companies left off the list, Bioenergy and SES, immediately went to court to question the way environmental licenses were awarded in Santa Catarina state, as well as some of the selection criteria. Judge Sergio da Silveira agreed with the two firms and suspended contracts between the federal power company, Eletrobras, and developers of nine projects adding up to 211 MW in Santa Catarina. He also suspended four contracts for 243 MW with Enerbrasil, because its links to Spain's Iberdrola meant it might not qualify as an "autonomous independent power producer," as it had claimed. Da Silveira says the suspensions will last until Eletrobras proves that procedures were not flawed. Eletrobras has appealed the decisions. The court action continued after Eletrobras redistributed 390 MW from contracts from the June 30 list that were turned down by investors. Siif Energies, the renewable power unit of France's EDF and now called EDF Énergies Nouvelles, claimed Eletrobras had changed the criteria for awarding this capacity. "In our calculation, we should have received something like 100 MW but we didn't because in our mind Eletrobras changed the rules," Siif Brazil president Henri Baguenier says. "The problem for us is that if they follow what we think is the right way we would be in, and with the choice of Eletrobras we are out." According to Baguenier, a number of Proinfa contract winners are now trying to sell their projects to investors in Europe and maybe even in the United States. "I have projects that I cannot do and people who have been selected are trying to sell me their projects. Something is wrong," Baguenier says. "Our project was not to go to court, it was to make megawatts."

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