Auction A-4: less than 20% of the auctions were for solar plants

The 29 plants contracted in first energy auction new of the year, only five were solar energy. It is a volume below industry expectations and the country's own needs, according to the assessment of ABSOLAR (Brazilian Photovoltaic Solar Energy Association). 

This because, even with the lowest average prices negotiated in the tender (discount of 20,78% in relation to the initial price of R$ 225,00/MWh), the finishings were below when compared to the large number of solar projects participating in the auction. 

“In addition, the Federal Government purchased more electricity from more expensive sources, a costly decision that will be paid for by Brazilian consumers. We are disappointed with this outcome,” said Rodrigo Sauaia, CEO of ABSOLAR. 

According to the entity's assessment, if the same amount of biomass had been contracted at the price of solar plants, the savings would have been R$1,47 billion. And, in the case of comparing the price of the photovoltaic source with the contracted value of PCHs (Small Hydroelectric Plants), the savings in consumers' pockets would be R$1,52 billion.   

“It is worth remembering that large solar plants generate electricity at prices up to ten times lower than fossil thermoelectric plants and, thanks to the versatility and agility of photovoltaic technology, it takes less than 18 months from the auction to the start of electricity generation. . Thus, solar is recognized as the champion in the speed of new generation plants”, stated Sauaia.

The solar projects contracted by LEN A-4 of 2022 are located in the Northeast region, in the state of Pernambuco. In total, the five new plants total 166 MW of power and new investments in these projects exceed R$687,3 million. 

“More than two thirds of the electrical energy that will be generated by the plants in Pernambuco will be destined for distributors in the ACR (Regulated Contracting Environment). The remainder can be negotiated in the ACL (Free Contracting Environment), where prices normally vary upwards, contributing to the economic results of the projects”, highlighted Sauaia. 

Auction Result A-4

In Auction A-4, 29 projects won, totaling almost 950 MW of installed capacity and 237,5 average MW of contracted energy. The auction recorded an average discount of 9,36%, which represents savings of R$1 billion for energy consumers from participating distributors.

Among the projects, the participation of the hydroelectric source was the main highlight, with 14 PCHs (Small Hydroelectric Plants) and four CGHs (Hydroelectric Generating Plants) being contracted, with 190 MW of installed capacity and R$2,1 billion in investments.

Four wind farms distributed in the states of Bahia and Paraíba and five solar photovoltaic plants located in Pernambuco were the winners. Investments from wind and solar sources total R$1,99 billion.

Among the thermoelectric plants, two projects were awarded – plants powered by sugarcane bagasse and bleach, totaling 409 MW of installed capacity and R$3,97 billion in investment. The negotiated contracts will begin supply in 2026.