October 18, 2019 / 8:28 PM / a month ago

UPDATE 1-Brazil awards contracts for 2.98 gigawatts of new power projects

(Adds auction details, comments from officials)

By Luciano Costa

SAO PAULO, Oct 18 (Reuters) - The Brazilian government awarded on Friday contracts for companies to build new power generation installations with combined capacity of 2.98 gigawatts, that will cost about 11.16 billion reais ($2.71 billion) to be built.

According to the power trading chamber CCEE, the new plants, which will need to be operational in six years, will sell energy for an average price of 176 reais per megawatt, a 33% discount over the initial price at the auction.

The final result was much above expected. Analysts had projected total awards of around 800 MW at the auction. France’s Voltalia, Norway’s Statkraft and Brazil’s Eneva are among the winning bidders.

“We have to celebrate. We managed to achieve an amount of projects almost three times what was expected,” said Reive Barros, planning secretary at Brazil’s Energy Ministry.

He said the result guarantees power supplies for the coming years in Brazil, as the economy slowly starts to grow again.

Wind power projects will account for most of the new generation, with 1.04 gigawatts of capacity.

Gas-fired thermal plants will make up 734 megawatts of the new capacity, while solar parks will contribute 530 megawatts.

$1 = 4.1182 reais Reporting by Luciano Costa, writing by Gabriela Melo and Marcelo TeixeiraEditing by Chizu Nomiyama and Cynthia Osterman

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