Brazil cancels 557.4MW of solar and wind in de-contraction auction

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Credit: BNDES

Brazil’s energy agency ANEEL has cancelled nine solar projects totalling 249.7MW of capacity and 16 wind farms with a combined capacity of 307.7MW in its first ever de-contraction auction.

The auction took place due to a high number of projects being contracted in Brazil’s first reserve energy auctions between 2014 and 2015 remaining unbuilt and becoming idle. This was partly the result of inexperienced players partaking in the initial auction. The de-contraction will allow the government to make more accurate predictions about energy generation in the future and avoid a situation of having excess energy.

A release from the Ministry of Mines and Energy (MME) said the de-contractions would also result in the reimbursement of BRL105.9 million (US$33.46 million) to the nation’s Reserve Energy Account (CONER).

The contracts of all 25 projects selected will be terminated via the 2017 Reserve Energy Disengagement Mechanism. Companies successful in the auction will be barred from participating in the next two reserve energy auctions.

A separate report by news outlet Canal Energia said that just 11% of the capacity eligible for de-contracting had been chosen in what would be a dissapointment for the government.

Brazilian energy agency EPE and MME recently released the long-awaited 10-Year Energy Expansion Plan proposition, PDE 2026, projecting the country to reach more than 13GW of solar PV deployment by 2026 and setting the annual additions figures at a steady 1GW.

EPE also recently announced it would hold two energy auctions in December this year, one of which has space for solar to compete.

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