Brazil Government Has Officially Authorized A Contract ForThe Development of 1.5 GW of New Solar And Wind Energy

The Brazil Government has approved a contract for the development of solar and wind power both with capacities of 930 megawatts and 550 megawatts respectively. This development falls under the $1.7 billion investment to enhance the country’s energy system.

Handicapped for over ten years by a weak and erratic power network, which has caused severe economic crisis in the country, the government of Brazil has taken a bold step to put a stop to this power crisis by adopting solar and wind energy.

Many renewable energy providers have been given contracts to add 930 megawatt capacity of solar photovoltaics from this present state till November 2018, with 550 megawatts capacity of wind energy, currently in the pipeline. The funds involved in this contract has been estimated at about 6.8 billion reais ($1.77 billion).Major renewable energy developers such as SunEdison and Portugal’s EDP Renovaveis have also signed the contract, regarding the recent energy auction in the country. The cost of solar power in the auction was within the range of 290 Real ($75.36) and 302 Real ($78.48) per MWh. The maximum price for solar auction was 381 Real/MWh.

In August, the average appealing auction price for solar energy projects was 301.79 Real/MWh, which was equivalent to $0.0842/kWh. This recent tender has lessened the price for solar one more time, and officials described it as a rationalexercise price.

“Competition was huge in this auction,” Rafael Brandao of Rio Alto Energiain formed Bloomberg. “Payers were fighting for contracts and the prices were pressured at the end.”

The director at the Ministry of Mines and Energy, Igor Walter, included that the prices are rational, explaining that the maximum price was increased from 349 Real/MWh to enhance the competitiveness to the auction.Since October 2014, the auction was the third within its limits for solar energy in Brazil, and has served to extremely enhance the solar PV industry. So far, there is nearly 3 GW capacity of solar PV either installed or underway.

This current move will go a long way towards Brazil reaching its clean power target of 7 GW of solar PV installed capacity by 2024.

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