Brazil’s electricity regulators said 398 million MWh, including 210 million MWh of thermal power and 188 million MWh of hydropower, changed hands in a government-organized power auction October 16.
The auction, in which the bidder offering the lowest tariff wins, represented about 2,300 MW in average annual capacity. Brazil officials qualified five hydroelectric and 14 thermal power projects to sell about 9,000 MW. (HNN 10/12/07)
The average price of thermal power reached 128.37 reais (US$70.40) per MWh compared to the government-set ceiling price of 141 reais (US$77.33). Hydroelectric prices exceeded the ceiling of 126 reais (US$69.10) when taking into account a so-called Public Asset Usage charge applied to hydroelectric projects.
Thermal energy prices for delivery in 2012 fell about 9 percent from the base price, but hydropower stuck to the ceiling price as risks of future shortages persisted.
A pool of distributors bought 256 MW from Tractebel Energia’s 1,087-MW Estreito hydroelectric project at a maximum price for delivery between 2012 and 2042. Estreito construction started in early 2007 on the Tocantins River. (HNN 10/17/07)
Tractebel, controlled by France’s Suez, hailed the sale as a success, saying it expected annual cash flow of 284 million reais (US$155.75 million) from Estreito.
The other big hydro project in the auction, 855-MW Foz do Chapeco, being developed on the Uruguai River by CPFL Energia, federal utility Furnas Centrais Eletricas, and Rio Grande do Sul State utility Companhia Estadual de Energia Eletrica, sold 259 MW. The five qualified hydro projects in the auction sold a total of 715 MW.
Analysts said the drop in thermal prices was atypical as it was caused mainly by two highly competitive coal-fired projects with very low fuel costs. The coal plants accounted for 58 percent of the thermal energy sold.
Analyst Renato Pinto of Fator brokerage said prices for hydroelectric energy should be higher to attract investors and make viable the 3,150-MW Santo Antonio project on the Madeira River, which is to be offered in a concession auction in November. (HNN 10/4/07) Santo Antonio and its sister project on the Madeira, 3,300-MW Jirau, are seen as vital for guaranteeing Brazil’s energy supply after 2012.