After a slow year dueto the COVID-19 pandemic, Brazil’s electric power sector will see several tenders carried out in the regulated contracting environment in 2021.

Regulator Aneel will hold the new energy auctions A-3 and A-4 on June 25. These are designed to supply power distributors in 2024 and 2025, respectively.

ln the A-3 tender, wind, solar photovoltaic and hydroelectric projects can participate in the “quantity” modality, and biomass thermoelectric projects in the “availability” modality. For the “A-4” auction, the sarne power sources will be allowed to take part.

Bidders interested in proposing the inclusion of projects in the tenders must apply for registration and technical qualification with energy research company EPE by February 26, 2021.

On September 30, the watchdog will hold the A-5 and A-6 new energy tenders, the power deliveries from which are planned to begin in 2026 and 2027, respectively.

Hydroelectric, wind, solar and biomass, coai and urban solid waste-fired (WTE) undertakings will be eligible to participate, with supply contracts varying between 15 and 25 years.

A public consultation to define the guidelines ofthe auctions is being held by Aneel until February 7.

Existing energy generation will be included in the A-4 and A-5 auctions in June and A-1 and A-2 tenders in December. The first two were originally planned for 2020 but were postponed amid the COVID-19 crisis.

The isolated system auction is scheduled for March. The goal is to supply locations that are not connected to the national grid in the northern states of Acre, Amazonas, Pará, Rondônia and Roraima.

The total power required is 93.7MW.

Last year, the country saw only one power generation tender, an A-1 auction held in December. The auction contracted supply of 87,600MWh for 12.4mn reais (US$2.43mn).

ln 2022 and 2023, Brazil intends to hold A-4 and A-6 new energy auctions in April and September, respectively, of each year, in addition to A-1 and A-2 tenders in December.

ln a recent interview with BNamericas, Márcio Trannin, vice chair of the board of PV solar power association Absolar, said that as the pandemic has made power distributors’ load more uncertain, it is very likely the next regulated energy tenders will see lower demand.

Marina Aidar, a partner at law office Vieira Rezende, believes that, despite the impacts ofthe economic and health crisis, there will be appetite for the energy to be sold at this year’s tenders.

“The Brazilian energy sector is mature and tested, with rules that allow financing for the projects,” she told BNamericas. “Besides, we’re talking about demand that isn’tjust from 2021 but also from last year.”

Aidar added that, while the free power market is attracting a growing number of power generators and consumers, the regulated tenders will also be taking place ata time that matches the ESG (environmental, social and corporate governance) agenda.

The two big novelties of the A-5 and A-6 auctions, scheduled for September, will be the possibility of contracting power from WTE projects and the withdrawal ofthe inflexibility limits for thermoelectric power plants.

“Regarding the WTE undertakings, this is for the use of energy sources that are still underutilized in the country, while it is used in other countries,” Juliana Senna, a partner at Kincaid Mendes Vianna, told BNamericas.

Referring to the thermoelectric inflexibility limits, she recalled that the subject was discussed in the national congress during voting on the new gas law.

“lnflexible plants would serve as anchors for demand, enabling the transport of natural gasto regions where it is not yet available, offering the possibility of a less polluting energy source for local industries,”
Senna said.
Brazil’s mines and energy ministry (MME) projects that a total of 4,790MW will be added to the national installed generation capacity in 2021, with 145 generation plants in 20 states. Last year, some 4,932MW was added, ofwhich 70% (3,519MW) was from renewable energy projects.

POWER TRANSMISSION

Also in 2021, authorities plan to hold two gower transmjssion tenders, which are expected to attract at least 2.3bn reais in investments.

The first auction will be held in June, tendering approximately 500km oftransmission lines and 2,600MVA oftransformer capacity, requiring an estimated 1bn reais. Planned for next December, the second auction will offer 900km of lines and 3,000MVA, requiring investments of 1.3bn reais.

ln December 2020, Aneel auctioned 25 lines totaling 1,958km and 12 substations (6,420MVA) that will require 7.4bn reais. The tender generated strong comgetition with an average discount of 55.2%.

State energy research company EPE’s base scenario for power transmission foresees 90bn reais in investments, expanding the total grid from 62,700km to 200,154km and transformation capacity from 395,366MVA to 525,115MVA by 2030.

Meanwhile, as renewable energy and distributed generation projects grow in Brazil, the management of transmission assets becomes criticai and requires heavy investments. Based on data from Aneel, Franceli Jodas, a partner at KPMG, told BNamericas that transmission line modernization will require 13bn reais by 2030.

Fonte: bnamericas