The Brazilian Electricity Regulatory Agency (ANEEL) has recently announced the framework for the next renewable power generation auction (A-4, auction nº 03/2019), that will take place in late June 2019 and will contract power generation from new renewable power plants (hydropower, wind, solar PV and thermal biomass) as of January 2023. The contracts will be quantity-based regulated contracts (CCEARs) with a 30-year supply period for hydropower projects and 20-year contracts for wind and solar PV. The quantity-based contracts had never been applied to solar projects before, but the regulator believes investors can take into their account some additional risks as the technology becomes more mature. Under these contracts, investors in alternative renewable sources take into account the so-called hydrological risk (Generation Scaling Factor, a ratio between the volume of energy generated by the power plants that make up the Energy Reallocation Mechanism (MRE) and their total physical guarantee (determined in the supply contracts)); in the previous availability contract framework this risk was absorbed by the buyers.
The Empresa de Pesquisa Energética (EPE) has received bids for 1,581 projects totalling 51.2 GW of installed capacity, of which 51% is for solar PV (26.5 GW), 45% onshore wind (23 GW) and 2% biomass (1 GW). The state with the largest proposed capacity is Bahia with 7.8 GW of wind and 6.1 GW of solar, followed by the Rio Grande do Norte state (5.9 GW of wind and 4.6 GW of solar).
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