IHS raises Brazilian PV market forecast as new auction catalyst for growth



Market research firm IHS expects the Brazilian Electricity Regulatory Agency (ANEEL) reserve capacity auction to be held October 2014 to be a catalyst for further PV market growth in the country.

Although ANEEL has yet to announce capacity figures for PV in the auction, IHS said it expected around 500MW to be offered with strong competitive pricing that should push annual installed PV capacity to 1,023MW in 2018, up from 167MW installed in 2013.

IHS said it expected the ceiling price for the (PPA’s) to be set at approximately RS250MWh (US$112 per MWh) over the 20 year period of the PPAs.

“Bids will be highly competitive,” said Josefin Berg, senior analyst for solar demand at IHS. “We expect bid prices to fall to less than RS200MWh (US$89.9MWh), in line with offers from previous Brazil auctions where solar failed to compete with wind.”

Brazilian project pipeline

According to IHS, the prospective PV project pipeline in Brazil has already reached around 6.1GW, primarily due to a new capacity auction scheduled for September 2014. However, as in a previous general auction, wind projects beat PV on pricing.

Yet, the October reserve capacity auction is expected to benefit local utilities and independent power producers (IPP), noted IHS, citing CPFL, the largest non-government owned utility that was said to have a PV pipeline of nearly 600MW.

International project developers such as GDF Suez and Enel have only won projects of 3.5MW and 15MW respectively to date.

Rumours have also surfaced that the Brazilian authorities could introduce local content rules as part of its strategy to allow PV capacity to increase, despite a very limited number of small PV module manufacturers established in the country.

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