Brazil welcomes solar to major energy auction

12 September 2013

In a big win for PV producers in Brazil, the country's energy minister has pushed through a new decree allowing solar in the upcoming A-5 auction for electricity from new energy plants that will go online in 2018.

After years of prevarication, Brazil has finally opened its arms to photovoltaic solar energy by including it in yet another significant federally-sponsored energy auction this year with the hope of helping to grow the market exponentially.

Although solar was originally excluded from the upcoming A-5 auction for electricity from new energy plants that come online in five years’ time, Brazil’s Ministry of Mines and Energy (MME) modified legislation regulating the A-5 auction in order to allow the participation of solar and wind plants in the auction scheduled for Dec. 13. The change of heart was heralded by energy minister Edison Lobão in the last week of August, during his speech at the Brazil Windpower conference in Rio de Janeiro.

The dramatic change was formally announced in a new decree, details of which were published in state gazette Diário Oficial da União (DoU) on Sept. 11. Photovoltaic and thermal solar plants with installed capacities of at least 5 MW will be able to take part in the auction that will see suppliers signing 20-year contracts with distribution companies, according to the text of the new decree.

The announcement comes in the wake of the recent registration of more than 2.7 GW of photovoltaic projects for participation in the A-3 solar auction due to be held on Nov. 18.

Developers who entered the preceding A-3 auction will also be allowed to register for participation in A-5 by simply presenting updated timetables, budgets and other documents required by the MME and without the need for resubmitting all the paperwork, under the condition that their projects do not have altered parameters and technical characteristics.

Participation in A-5 (which will start on Jan. 1, 2018) will allow developers to offer lower prices than in A-3 if they foresee a further fall in prices, thus making the energy source even more competitive in relation to rival technologies that are taking part in A-5, such as wind, large hydro and thermal.

The deadline for registering solar and wind energy projects for the upcoming A-5 auction is noon, Sept. 30. Developers can register for participation by using the AEGE official online portal for registration, managed by state-run energy research company EPE. If developers are already registered on AEGE then they can directly use the portal to submit new projects for A-5.

Detailed instructions on how to register projects for the A-5 auction are available online from EPE.