+44 (0)24 7671 8970
More publications     •     Advertise with us     •     Contact us
 
Loading...
{megaLeaderboard}
{normalLeaderboard}
News Article

Brazil announces major solar plans

News

Brazil's plan to auction 3.5 gigawatts (GW) of photovoltaic (PV) capacity through 2018 comes as welcome news for the global solar industry as the ambitious plan is expected to catalyze solar growth in Latin America, according to a new report from IHS Technology.

The Brazilian Electricity Regulatory Agency (ANEEL) announced a so-called reserve capacity auction to contract new power-generation capacity to hedge against unexpected drops in power supply. Such drops might include low hydroelectric power levels during drought years.

The next auction is slated for October, and will offer separate categories for different technologies. This approach will benefit the PV market compared to the regular new-capacity auctions, in which multiple renewable power technologies compete, a method that gives an advantage to wind.

Exactly how much capacity will be awarded has not yet been disclosed, but IHS expects about 500 megawatts (MW) to be available for PV projects in the first round. The ceiling price for the 20-year power purchase agreement (PPA) for bids is likely to be set at approximately RS250 per megawatt-hour (MWh), or $112 per MWh.

"Bids will be highly competitive," said Josefin Berg, senior analyst for solar demand at IHS. "We expect bid prices to fall to less than RS200 per MWh, in line with offers from previous Brazil auctions where solar failed to compete with wind."

In light of the new announcements, IHS has increased its installation forecast for the country, and predicts that the annual installed solar capacity for Brazil will rise to 1,023 MW in 2018, up from 167 MW in 2013.

These findings are available in the latest edition of the "Emerging PV Markets Tracker" report, from the Power & Energy service of IHS Technology.

Brazil is currently suffering a challenging year in power generation, as extreme drought conditions have threatened electricity supply and forced an increase of costly thermal power generation. As peak wholesale power prices top $400 per MWh, alternative sources of generation have become attractive in the short term.

"Markets like Brazil that combine high solar resources and elevated power prices create opportunities for PV," Berg added. "The main constraint in Brazil is the price uncertainty in long-term power, tied to meteorological factors; revenue levels cannot be guaranteed without a PPA."

Successful bidders in the reserve auction could seek to increase revenues by completing projects early to initially benefit from potentially elevated spot prices until the PPA of the auction comes into effect in 2017. Such early installations will contribute to near-term growth in PV demand in the country.

Competition for PV projects in the reserve capacity auction will be tough, IHS expects. As an indicator of the PV project pipeline in Brazil, about 6.1 GW worth of PV projects have registered for the new capacity auction scheduled for September 2014, even if few are likely to be able to bid below wind projects.

In the October reserve capacity auction, locally established utilities and independent power producers (IPP) are best positioned to offer sufficiently low bid prices to take home the bulk of awarded PV capacity. CPFL, the largest utility not owned by the government, has a PV pipeline of nearly 600 MW, while wind-focused IPP Renova Energia has claims to bids of a combined capacity amounting to 240 MW.

Of the international power producers already established in Brazil, GDF Suez has installed a 3.5 MW solar plant, and Enel was awarded 15 MW in the February Pernambuco PV tender.

Given the positive news for PV in Brazil, IHS has raised Brazil's attractiveness score to 41, out of a possible maximum of 100, in the IHS Emerging PV Markets Attractiveness Ranking, elevating the country from eighth to sixth place among the world's most attractive solar markets.

Overall, Brazil's installed PV capacity is anticipated to grow from 39 MW to 1.2 GW by the end of 2016, IHS expects The main share will be in utility-scale projects as awarded in national and regional auctions. As for commercial and residential PV, despite a net-metering scheme being in place, deployment remains limited by tax challenges and low visibility on retail power prices that do not reflect the real power generation costs. The future of regulatory support for PV on the one hand, and of retail power price levels on the other, will hinge on the outcome of Brazil's general elections in October this year.

Schletter Group: 48 MWp Project in Italy
ENCAVIS Acquires Two More Solar Parks In Spain and Surpasses The Planned Expansion
Maximum profitability with KACO advanced technology for complex solar roofs
Enviromena wins contract to re-power three major solar farms ahead of the summer energy peak
New Swansea University Collaboration to Support Sustainable, Locally Manufactured Solar PV
New Swansea University Collaboration to Support Sustainable, Locally Manufactured Solar PV
Next2Sun Builds World's Largest Vertical PV Plant at Frankfurt Airport
DNV Publishes Bankability Study of Solcast Satellite Irradiance Data
Steel company SSAB switches to fossil-free energy in Italy with PV solution from Solnet
janom Investments enters the Croatian solar energy industry by investing in a 30 MW power plant project
Trina Solar Vertex S+ 505W n-type dual-glass modules enter mass production
BayWa r.e. and 3E sign partnership agreement for monitoring & analytics of global PV portfolio
Accelerating Spain's Energy Transformation: LONGi to supply Naturgy with 1 million modules in new deal
NTR announces corporate PPA with Almac Group to buy energy from Murley Wind Farm, Northern Ireland
Oxford PV sets new solar panel efficiency world record
Order Intake for the Construction of Wind Turbines in Turkey
Trilantic Europe acquires stake in AEROCOMPACT Group
Octopus Energy makes solar farm debut in Germany
Austria-based KOGA Energy, a solar EPC solutions provider, has kicked off.
Exus to acquire 625MW New Mexico solar portfolio
Capcora Accompanies SUSI Partners In Raising Senior Debt For a Polish Renewables Portfolio
Qualitas Energy acquires a 96 MW wind energy project pipeline in Germany
Nordex Group receives orders from the UK for approx. 150 MW
Trina Solar gains EPD certification from UL Solutions and EPDItaly for industry leading modules
Mandarin Oriental Hyde Park, London instals innovative solar tech to decarbonise heating
Efficiency First: The Road to Electrification
SCHLETTER Supplies Austria's Largest PV Roof System
E.ON partners with UK renewable heat innovator Naked Energy
Sonnedix signs innovative EUR500 million loan facility to finance construction of its renewable electricity pipeline in Europe and UK
Construction begins on Glennmont and Ørsted’s Borkum Riffgrund 3 offshore wind farm in Germany
ABB shores up reliable power supply at Southeast Asia’s largest floating solar plant
Sonnedix starts construction of 300MW UK solar PV portfolio

×
Search the news archive

To close this popup you can press escape or click the close icon.
Logo
×
Logo
×
Register - Step 1

You may choose to subscribe to the Solar + Power Magazine, the Solar + Power Newsletter, or both. You may also request additional information if required, before submitting your application.


Please subscribe me to:

 

You chose the industry type of "Other"

Please enter the industry that you work in:
Please enter the industry that you work in: