Auction prices to build and operate the 3.3GW Jirau hydro plant on Brazil's Madeira river will not be as low as in last year's competition for Santo Antônio, an industry consultant told BNamericas.
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"I don't believe in a low price, because Jirau has some peculiarities that may not allow bids to be as aggressive," said João Carlos Mello, president of consultancy firm Andrade & Canellas.
Santo Antônio (3.15GW) and Jirau are on the same river. The Madeira Energia consortium's winning bid of 78.87 reais (US$47.34) per MWh for Santo Antônio was surprisingly low to some industry executives.
Madeira Energia's bid was 35% below the 122-real/MWh price cap power regulator Aneel set for the auction, beating two competing consortiums.
"Despite [Jirau's] bigger installed capacity, its assured power is smaller than Santo Antônio. In addition, its construction will demand more complex engineering than the first plant," Mello said after speaking to delegates at the 2nd Coaltrans Brasil conference in Rio de Janeiro.
The Jirau price cap is 91 reais/MWh.
The consortium led by federal power company Furnas and engineering firm Odebrecht, which led Madeira Energia, may bid more conservatively in Jirau due to past financing commitments, Mello said.
"They wanted to win the Santo Antônio auction, as they might have seen the plant as the jewel of the crown in the Madeira river. I am not sure whether they will be capable of taking another big loan for a project like Jirau," the consultant said.
But Furnas president Luiz Paulo Conde has said it will bid aggressively for Jirau. "We will offer a low price," he said in April. "We cannot develop the country without cheap energy."
Energia Sustentável do Brasil is the second group signed up to compete for Jirau. The consortium is made up of France's Suez (50.1%), Brazilian engineering firm Camargo Corrêa (9.9%) and federal power companies Eletrosul and Chesf with 20% each.
