The first bidding round for the supply of Wind Energy in Brazil (OKTO FINANCE)

PRLog (Press Release) - Jan 18, 2010 -
Technical Habilitation Process
For the first bidding round occurred on the 14th December 2009 that the EPE (Energy Research Company, responsible for the long term planning of the Brazilian electricity sector) provided guidance and approved the necessary technical requirements to 339 wind power projects.
The projects added to proposed installed capacity of 10.005 MW, which can be  compared to one and a half of the total capacity for the Rio Madeira Hydro Complex which includes the hydro plants of  Jirau (3.300 MW) and Santo Antônio (3.150 MW), in Rondônia, North of Brazil.
The contracts for the energy reserve resulting from this first bidding round will start supplying on 1st July 2012 with a supply period of 20 years. The target price proposed for the sale of the wind energy was at R$ 189MWh (or US$ 108MWh)

Projects Proposed  by State
State   MW   %   Projects   %
Bahia   1.004   10%   36   10,6%
Ceará   2.515   25,1%   108   31,9%
Espírito Santo   153   1,5%   6   1,8%
Piauí   336   3,4%   13   3,8%
Rio Grande do Norte   3.629   36,3%   105   31%
Rio Grande do Sul   2.238   22,4%   67   19,8%
Santa Catarina   75   0,8%   2   0,6%
Sergipe   54   0,5%   2   0,6%
TOTAL   10.005   100%   339   100%
Source: EPE (Energy Research Company)
The Results

It was contracted 1.805,7 MW, at an average price of R$ 148,39/MWh (or US$ 84,79MWh). Of the initial 339 projects that gained access to the bidding round that only 71 projects will be built, in 5 states of the Northeast and South regions. The amount of money involved over the life period of the contracts – 20 years is R$ 19,59 billion (or US$ 11,20 billion)

Winning Projects  by State
State   MW   %   Projects   %
Bahia   390   21,6%   18   25,4%
Ceará   542,7   30%   21   29,5%
Rio Grande do Norte   657   36,4%   23   32,4%
Rio Grande do Sul   186   10,3%   8   11,3%
Sergipe   30   1,7%   1   1,4%
TOTAL   1.805,7   100%   71   100%
Source: EPE (Energy Research Company)
Comments

The success of this wind energy-only bidding round came just after the cancellation of the thermoelectric generation bidding scheduled for the 21st December 2009. The price achieved between the parties is close to the energy dispatched by the thermo plants.
According to the EPE (Energy Research Company) that in 2010 the demand for electricity in Brazil will grow 9,4%; the forecast is based on a GDP growth of 0,5% in 2009, 6% in 2010 and 5% on average for the years 2011 to 2018 for the Brazilian economy. Over this period the figure of the Independent Power Producer (IPP) will contribute with a growth of 8,4% p.a., achieving 74,4 thousand GWh in 2018.
We at OKTO Finance believe the Brazilian market for renewable energy and especially for the suppliers of aero generators will have a boost with this recent round; both Siemens and Vestas have announced their intention to expand their capacity in Brazil. On the other hand it is expected the Brazilian government to draft and propose a proper Renewable Energy Policy which would provide the needed sponsorship allowed for the creation of a wind turbine industry and market but also for the supporting technology to flourish.