Brazil's Ministry of Mines and Energy Schedules A-6 Energy Auction
The Ministry of Mines and Energy (MME) has designated for August 31, 2018, the Auction for the Purchase of Electric Energy from New Generation Power Plants, named "A-6", of 2018. The guidelines for the auction were established through the Decree no. 121/2018, published on 04.04.2018.
The beginning of the supply period stablished in the Power Purchase Agreements will be on January 1st, 2024. The term of the PPA will be: (i) 30 (thirty) years for hydro power plants; (ii) 20 (twenty) years for wind power plants; (iii) 25 (twenty five) years for biomass power plants and other sources. Solar energy projects will not be contracted in this auction.
Entrepreneurs who want to participate in this auction must negotiate at least 30% (thirty percent) of the energy allocated to the projects.
The main novelty of this auction is the changing of the way of contracting wind power plants. Instead of contracting wind energy through availability contracts, the Government decided to contract it through quantity contracts, which means that the performance of the wind power plants will be even more important in this type of contracting.
The deadline for registration and technical qualification of the projects before EPE (Energy Research Company) will be at 12am on May 8, 2018. On the other hand, entrepreneurs whose projects have already been registered for participation in the 2018 New Energy Auction "A-4" may require the registration of respective projects for the "A-6" Auction. In this case, these participants of the auction will be exempt from the re-presentation of the documents, as long as the technical characteristics and other information of said projects remain unchanged.
ANEEL should soon put the draft of the Notice, its Annexes and respective CCEARs in the process of Public Hearing.
The Demarest Lawyers Energy area closely monitors the development of the auctions to purchase electricity from new generation projects scheduled for this year, and is in a position to advise its clients, companies and investors on various issues related to energy auctions power.