Brazil’s Energy Research Company (EPE) plans to conduct the nation’s Energy Auction Reserve on August 28, 2015. Approximately 341 PV projects, totaling 11,261MW of installation capacity, have been approved for the auction.
The approved projects’ locations and capacities are:
- Bahia: 125 projects, 3,998MW
- Piauí: 61 projects, 2,077MW
- São Paulo: 37 projects, 1,293MW
- Rio Grande de Norte: 37 projects, 1,293MW
- Pernambuco: 31 projects, 1,064MW
- Minas Gerais: 22 projects, 767MW
- Others: 28 projects, approximately 769MW
The qualified solar projects for the solar-only reserve auction were announced on August 25. The 341 projects represent 90% of the 382 projects initially applied. EPE’s president, Mauricio Tolmasquim, expects strong competition in the auction. He also believes that such a large number of qualified projects will benefit the consumers.
In addition, Tolmasquim notes that the capacity qualified was close to scale to large hydropower projects such as Usina project in the state of Alagoas.
The realized PV capacity from the qualified projects is yet determined at this moment, while it is also possible that some of the bidders would fail in completely constructing the projects. EnergyTrend learnt that the Brazil has set a target of 9.7GW of capacity installations by 2024, including 7GW of utility projects and 2.7GW of rooftop arrays, and the realized capacity from the auction could be close to this target.
The 9.7GW installation target could be translated into approximately 1GW of new installations each year starting from 2015. Besides, chosen projects are required to come online in 2017.
Although the reserve auction is a good sign for Brazil’s PV market, it could be potentially risky. PV Magazine interviewed an analyst at GTM Research, Adam James, citing: “While the ceiling price (US$95.70 per MWh) is not too low, I'd note that the currency and tax issues create a de facto high floor price for these bids -- below which projects will not be profitable.”
Brazil held its first national auction for solar PV projects in 2014 and awarded 1GW of projects. The reserve auction for the 11GW of projects is the first phase of this year’s solar auction, while the second phase is scheduled to be held in November.