Brazil power auction attracts US$1.4 billion

Brazil’s second auction of electricity and power plant concessions attracted US$1.4 billion in investments to build 18 new power plants, including seven small hydroelectric projects and 11 thermal plants totaling 598 MW.

Ending at 4 a.m. June 30, the 16-hour auction traded 45.6 billion reais (US$21 billion) of hydro and thermal power.

Sellers representing 89 projects, 33 hydro and 56 thermal, had offered energy in the auction. From those, utilities bought 1,682 MWh of firm power for delivery in 2009 from 15 hydroelectric projects and 16 thermal projects.

The price negotiated for 30-year hydropower contracts was 126.77 reais per MWh (US$58.42), which was higher than the initial auction price of 125 reais (US$57.60). Chairman Antonio Carlos Machado of the board of the power trading agency, Camara de Comercializacao de Energia Eletrica, said that was due to 1.94 reais added to the sale price to compensate for premiums paid for licenses to build power plants.

The price negotiated for 15-year thermal power contracts was 132.39 reais (US$61), compared to a reference price of 140 reais (US$64.52).

Brazil has set September 5 as the date for the next public auction of electricity and concessions for hydropower and thermal plants that would come on line starting in 2011.

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