Brazil gives go-ahead to 31 solar parks in push for new energy
By Marcelo Teixeira
SAO PAULO Oct 31 (Reuters) - Brazil finally entered the solar power sector on Friday, granting contracts for the construction of 31 solar parks as it tries to diversify its sources of generation amid an energy crisis caused by the worst drought in eight decades.
Brazil's energy regulator, Aneel, concluded its first exclusive solar power auction on Friday, clinching 20-year energy supply contracts with companies that will invest 4.14 billion reais ($1.67 billion) and start to feed the national grid in 2017.
The 31 solar parks, the first large-scale solar projects to be constructed in Brazil, will have a combined installed capacity of 1,048 megawatts (MW). Market expectations were for projected total awards of 500 MW.
"This auction is a mark, not only because it signals the entrance of solar power in the Brazilian energy mix, but because it was one of the most competitive to date," said Mauricio Tolmasquim, head of the government's energy research company, EPE.
The auction lasted more than eight hours. The final price for solar power came at around 220 reais ($89) per megawatt-hour, against an initial price of 262 reais ($106), an 18 percent discount.
"This is one of the lowest prices for solar energy in the world," Tolmasquim said.
According to Tolmasquim, costs were reduced because of the strong solar radiation factor in Brazil and because many solar parks would be installed in areas that already have wind farms, reducing the amount developers would spend on land and transmission lines.
In Brazil's power auctions, the government sets a maximum price for the megawatt-hour and companies bid down the price at which they are willing to sell energy. Companies that offer the lowest prices win the contracts. Continuación...