Brazil's south set for US$3bn grid facelift

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Tuesday, December 9, 2014

Energy developers have unveiled plans to invest 8bn reais (US$3bn) over the next five years to bolster electricity supply in Brazil's southern state of Rio Grande do Sul.

Private firms Tractebel and Bolognesi will contribute more than half of the total outlay by building thermoelectric plants, while state-run Eletrosul has pledged 3.27bn reais in transmission reinforcements, according to local investment agency AGDI.

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"These projects will guarantee an increase in supply and reliability for future investments," AGDI president Ivan De Pellegrin said in a government statement.

According to Pellegrin, the projects will increase the state's installed power capacity 23% by the end of the decade.

The project catalog is headed by Bolognesi's 1.24GW Rio Grande thermoelectric plant, from which the firm secured a 25-year supply contract at last month's A-5 auction.

Earmarked for completion in 2019, the 2.9bn-real facility's primary fuel source will come from liquefied natural gas (LNG).

State-run energy major Petrobras is currently the only company in Brazil to import LNG for electric power generation.

Petrobras operates each of Brazil's three LNG regasification terminals, including the Guanabara Bay facility in Rio de Janeiro. CREDIT: Petrobras.

Bolognesi also secured a 25-year deal for an identical plant at the Suape port complex in the northeastern state of Pernambuco.

In addition, the firm plans to build two regasification terminals to process LNG shipments from the Atlantic basin.

The facilities will require investments of 5.6bn reais and boast a combined processing capacity of 28Mm3/d, according to Bolognesi director Paulo César Rutzen.

Details of Bolognesi's plans come as Brazilian hydroelectric output continues to dwindle amid the country's worst drought in decades.

According to London-based consultancy Energy Aspects, Brazil will be forced to import 5Mt of LNG this year to fuel back-up thermoelectric plants.

The Jaguari Jacarei dam in Bragança, São Paulo state, has been parched by Brazil's worst drought in decades. CREDIT: Luis Moura/AFPaption.

Rio Grande do Sul's other generation project to secure a long-term supply deal at the A-5 round was the coal-fired Pampa Sul facility in Candiota.

Operated by Tractebel, the US$1.8bn-real plant is also due to begin operating in 2019, with installed capacity of 340MW.

The state's power network will also receive 2,100km of new transmission lines and eight substations. Expansion works, meanwhile, will be conducted at 13 substations already in operation.

Eletrosul says it has earmarked 3.27bn reais for the projects.

In addition, Eletrosul has committed to distribution upgrades alongside local firms SDPI, Seinfra and AGDI, the government said, without revealing the value of investments.

The works are aimed at linking Rio Grande do Sul's power network to the 216MW Cerro Chato and 583MW Campos Neutrais wind farms.

Work began on the US$1.35bn Campos Neutrais wind complex in Santa Vitória do Palmar in May. It will be the largest wind complex in Latin America when completed. CREDIT: Rio Grande do Sul government.