HomeRenewablesBiomassBrazil makes conditions favourable for fossil fuel power

Brazil makes conditions favourable for fossil fuel power

The Brazilian government is acting to ensure there are more fossil fuel power plants on the national grid.

Developers of power projects that use natural gas and other fossil fuels are being enabled to sell their output at higher prices than wind farms next month.

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Builders of small hydroelectric dams and thermoelectric plants that run on coal, gas or biomass will have to sell power below 144 reais ($61.72) at a Dec. 13 auction, the Brasilia-based electricity regulator Agencia Nacional de Energia Eletrica said today on its website. In contrast, wind developers must bid below 122 reais.

Developers of wind farms have won 55 per cent of contracts in auctions since 2011, according to data compiled by Bloomberg, and the government’s decision on fossil fuel plants is motivated by the need to have more back-up.

The average price of wind energy fell 26 per cent to 110.51 reais a megawatt hour in an August auction from 2009. In Brazil’s power auctions, regulators set a ceiling rate and developers bid down the amount at which they are willing to sell power. The lowest bids win contracts.

Developers that win contracts in the so-called A-5 auction will have to start producing power from May 2018, the regulator said.

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