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(Source: Valor Econômico Newspaper - December 15th 2009)

by Josette Goulart, of Sao Paulo

 

Wind auction has a 21% discount  

Energy: Price was R$ 148 per MW and investments are estimated between R$ 7 billion and R$ 9 billion

Brazil will receive during the next three years investments between R$ 7 billion and R$ 9 billion in wind farms with a generation capacity of 1.8 megawatts. This was the volume negociated in yesterday's first public auction of wind power promoted by the federal government. But despite significant investments, the price was surprising. With the average US$ 148 per MW, a discount of 21% compared to the ceiling price, the government indicates that there is no more need to conduct an auction only for wind power. "This is a competitive source," said the executive secretary of the Ministry of Mines and Energy (MME), Márcio Zimmermann.

The price was close to the one for energy of thermal power projects. According to the Director-General of ANEEL, Nelson Hubner, this also shows that these projects will have to become more competitive over the coming years, as there is a tendency for all energy sources to compete in the same auction in the future.

According to Jose Carlos de Faria Miranda, the Energy Research Company, the price was competitive because the productivity factor in the generation of the winning projects is very high, on average, 40% - a percentage similar to that proposed in the hydroelectric power plant from Belo Monte and quite high in relation to wind projects in general. With this level of productivity, the energy ensured in the contest was equivalent to 753 MW. By this criterion, the biggest winners were the Renova Energy, a company formed by investors in financial markets, which sold 127 MW, and CPFL Energia, with 73 MW.

The president of the Electric Energy Commercialization Chamber (CCEE), Antônio Carlos Fraga Machado, said that 130 entrepreneurs attended and sregistered 217 projects with more than 6 thousand MW of capacity. The 31 entrepreneurs who won argued for seven and a half hours, guaranteeing R$ 19.6 billion as income to be received in 20 years.

The government understood that the auction was a success and the sign that the equipment industry expected to invest in the country. One of the incentives provided to the auction was the exemption of IPI (industrialized product tax), which according to Zimmermann gives a positive impact of 7.5%. EPE believes that the total investment will reach US$ 9.4 billion, but some government officials believe that, through competition, the investment per MW planned by investors should be less than R$ 5 million, settling around R
$ 4 million.