Brazil power auction flops as recession bites
Less than 10% of the electricity available at an auction for new capacity in Brazil was sold on Friday as investors ignored an industry hit by falling demand.
The A-5 auction for energy from projects due online in 2021 saw distributors contract 49.206TWh of electricity from 29 plants with combined installed capacity of 278MW.
Some 802 projects totaling almost 30GW had been registered for the auction with industry regulator Aneel.
It was the lowest volume of energy contracted at a Brazilian A-5 auction since 2009.
Having endured the threat of power rationing early last year, Brazil is now facing an electricity supply glut as a recession and higher consumer tariffs drive down demand.
The total value of contracts secured at Friday's auction was 9.77bn reais (US$2.81bn), according to Brazil's CCEE power market clearing house. Investments in the projects are expected to reach 1.9bn reais.
Distributors purchased energy from eight thermoelectric projects fired by natural gas and biomass in Goiás, Maranhão, Mato Grosso do Sul, Minas Gerais and São Paulo states.
Energy was also sold from a large hydropower project in Paraná state and 20 small hydroelectric projects in Espírito Santo, Goiás, Mato Grosso, Minas Gerais, Paraná, Rio Grande do Sul, Rondônia and Santa Catarina, Aneel said.
The average price of contracted energy was 198.59 reais/MWh.
Between them Celesc, Copel and Amazonas Energia, a subsidiary of state-run power group Eletrobras, secured 70% of the total electricity sold.
Other buyers were ELFSM and Eletrobras subsidiaries Boa Vista Energia, Ceal and Cepisa.
Under Brazil's reverse auction model, developers bid down the price of electricity to be sold from their plants and contracts go to those making the lowest offer.
The names of the project developers were not released by Aneel or the CCEE.
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