The Ministry of Mines and Energy (“MME”), through Ordinance 293 of August 4, 2017, has stipulated that two new energy auctions should occur in December 2017 for new power generation projects of the “A-4” and “A-6” types. These projects will provide initial delivery of power from January 1, 2021 and from January 1, 2023, respectively. The National Electricity Agency (“ANEEL”) has yet to draft the public notice for the auctions and take the necessary measures to promote both auctions.
Ordinance 293 sets out that interested parties must submit their request for registration on or before September 6, 2017.
The following generation projects are not eligible for registration: (i) projects with a Unitary Variable Cost (“UVC”) greater than zero and with non thermal sources; (ii) projects with an installed capacity less than 5 MW; (iii) wind projects that have not delivered wind speed and direction studies to the Energy Research Company (“EPE”); (iv) thermal projects with an UVC greater than R$ 280.00/MWh; and (v) hydropower projects which have not have updated their financial guarantee data with the EPE.
According to Ordinance 293, for the “A-4” Auction two types of Power Purchase Agreements (“PPAs”) will be negotiated: (i) based on quantity with a supply period of 30 years for hydropower projects; and (ii) based on availability with a supply period of 20 years for biomass, wind and solar power projects.
In relation to the “A-6” Auction, there will be 2 types of PPAs to be negotiated: (i) based on quantity with a supply period of 30 years for hydropower projects; (ii) based on availability with a supply period of 20 years for wind projects, and 25 years for biomass, coal and natural gas combined cycle projects.