With little provide, authorities contracts solely three thermoelectric vegetation in an public sale imposed by Eletrobras regulation
- October 2, 2022
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Government contracted only 729.25 megawatts of energy from the expected two gigawatts. Acquisition took place without discounts due to low competition.
The federal government contracted this Friday (30) only 729.25 megawatts (MW) of energy from the 2 gigawatts (GW) expected in the auction of thermoelectric plants powered by natural gas.
The purchase of natural gas by the government was an imposition inserted by the National Congress in the law that authorized the privatization of Eletrobras (see more details below).
These 729 MW will be supplied by three thermoelectric plants, all to be built in the North region. The start of supply will be on December 31, 2026 and the contract term will be 15 years.
The winners were Eneva, with the thermoelectric plants Azulão II (295.43 MW) and Azulão IV (295.43 MW), and the GPE consortium, with the thermoelectric plant Manaus I (162.9 MW). The forecast is that companies invest R$ 4.14 billion in the projects. The natural gas that will be used is of Amazonian origin.
The auction, called “Reservation of Capacity in the form of energy”, was carried out by the Electric Energy Commercialization Chamber (CCEE) and the National Electric Energy Agency (Aneel).
No offer for Northeast
It was expected that 2 GW of energy would be contracted, that is, 2 thousand MW. However, there was no offer to install thermoelectric plants in the Northeast of Maranhão and in the Northeast of Piauí. Also in the North region, up to 1 GW could be contracted, but the contracting was lower.
The locations were pre-defined in the law that authorized the privatization of Eletrobras. The objective was to take thermal plants to the interior of the country.
Due to the low participation of companies, there was no discount in relation to the ceiling price of the auction, which was R$ 444 per megawatt-hour (MWh).
André Patrus, executive manager of the Auctions department at Aneel, believes that the market signaled, at the auction, that there was no interest in placing thermoelectric plants in the Northeast of Maranhão and Piauí.
“The market responded to the auction by signaling that there was no interest in those locations. Despite this, we continue to consider the auction to be successful,” he said.
According to the Deputy Secretary for Energy Planning and Development at the Ministry of Mines and Energy, Frederico Teles, the government will carry out a legal assessment of what to do with the 1.25 GW that were not contracted in this auction.
Questioned, the director of Aneel Ricardo Tili said that the agency still does not have the calculation of impact on energy rates with the three thermal plants contracted. The cost of energy will be shared between free and captive consumers, through a charge.
Victor iOcca, director of Electric Energy at Abrace (an association that represents large energy consumers), says that the result of this auction shows that the contracting imposed by the Eletrobras Law, with the choice of regions, is an intervention in the energy planning of the Brazil.
“The result without discount [desconto] in the ceiling price is a reflection of this lack of competition. Consumers must remain alert to avoid the creation of new ‘tortoises’ such as the obligation to contract gas pipelines subsidized by the electricity tariff. The additional cost would be up to R$100 billion, says iOcca.
During the processing of the proposal that authorized the privatization of Eletrobras, the National Congress included in the text the need to contract 8 GW of energy generated by new natural gas thermal plants. It was a counterpart demanded by parliamentarians.
This Friday’s auction expected to contract a quarter of that 8 GW, which did not happen. Other auctions are still to be held over the next few years.
In the electricity sector, the plants that will be contracted by Congress became known as “thermal tortoises”. The term “jabuti” is used in political jargon when an item that is foreign to the original text is included in a project.
Consumer associations contest the need to contract these 8 GW. First, because they claim that the sector’s long-term planning does not indicate the need for this additional generation.
Second, because the energy generated by thermal plants is more expensive and polluting than other sources – it will be the consumer who will pay the bill, through a charge included in the energy bill.
Third, the thermal plants will have to be built in regions where there is currently no flow of natural gas. Therefore, the entire infrastructure will have to be built.
Aneel states, in the public notice, that the supply of natural gas to the plants is a risk that the entrepreneur assumes. However, part of Congress has been trying for months to approve a proposal that passes on, to the consumer, the cost of building the gas flow infrastructure.