Wind Prices Lower Than Expected In Brazil Energy Auction

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Brazil's A-3 energy auction, a competitive tender between several energy sources, took place on Aug. 17 and saw an average price for wind energy projects of below 100 reais/MWh (or less than $63/MWh), according to the Brazil Wind Energy Conference (BWEC). The overall average price was R$102.07/MWh, with 1.5 GW of energy contracted in the auction at a total price of R$29.14 billion.

The bulk of the energy offered during the auction was either wind or natural gas. Of a total of 2.7 GW of potential capacity approved to participate, wind represented 39% and natural gas represented 38%. In total, there were 51 successful participants, of which the large majority – 44 – were wind projects.

The key electricity utilities contracting to buy the energy included Companhia Energetica de Minas Gerais, which will buy 25.2% of the total; CPFL Piratininga, which will buy 11.07%; and Amazonas Energia, which will buy 10.81%.

The 44 wind projects have committed to supply a total of 1,068 MW of energy to the Brazilian electricity grid under the terms of the auction, at an average price of R$99.58/MWh, which was below the expected price. The average wind energy price was 23.1% below the average in 2010's auction (R$130.86/MWh) and 28.36% below the maximum stipulated price, according to BWEC.

The Reserve Auction, for wind only, takes place today.

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