Michel Leodonio, New Business Coordinator at Trinity Energias Renováveis, says that this was just the initial process, with an estimated average impact of around R$4,00 per MWh consumed. He understands better how the construction of the plants and the auction in Amazonas (AM) will be.

The Electric Energy Trading Chamber (CCEE), Amazonas (AM), held the 30 Capacity Reserve Auction in the form of Energy (LRCE) on September 09, aimed at contracting energy from new power plant generation projects, from thermoelectric sources to natural gas.

The realization of the LRCE is based on the Law No. 14.182 / 2022, which originated in Provisional Measure No. 1.031/2021 and its main objective was to establish the conditions for the privatization of Eletrobras. The original text of the MP dealt only with the privatization of the state-owned energy company, but the National Congress included the obligation to contract thermoelectric generation powered by natural gas in predefined volumes for the years 2026 to 2030, totaling 7.000 megawatts (MW) of installed capacity of new plants. 

Electricity in Amazonas can be manufactured with the new plants, reducing the cost to the consumer

Michel Leodonio, New Business Coordinator at Trinity Energias Renováveis, one of the largest electricity retailers in the country, says that the LRCE was just the first stage of the process, to target and expand the contracting of installed capacity in the region.

“This was just the initial stage, to make it possible to contract, for a period of 15 years, 1.000 MW of capacity in the North region, scheduled to start supply on 31/12/2026. In the Northeast, there was a subdivision into two products: one aimed at contracting projects in the state of Maranhão and another in Piauí – with 70% of the amount to be allocated to the latter, in a total of over 1.000 MW to be installed in the region, with supply starting on 31/12/2027”, clarifies Michel.

According to data released by the Energy Research Company (EPE), 37 projects were registered for participation in the LRCE, totaling a potential capacity of 11.889 MW. However, only three plants with a total capacity of 753,763 MW were contracted, all of them located in the North region, with no proposals for the Northeast.

Thus, 669,5 average megawatts (MWm) of energy were traded, with no discount in relation to the ceiling price established for the Auction, of R$ 444,00 per megawatt-hour (MWh).

Natural gas plants in Amazonas: Annual fixed project revenue is around R$ 2,5 billion

"The total annual Fixed Revenue to be received by sellers will be just under R$ 2,5 billion, adjusted annually by the IPCA. This amount will be borne by all consumers in the country, through the Reserve Energy Charge, with an estimated average impact of around R$ 4,00 per MWh consumed”, says Michel Leodonio.

For him “It is also important to point out that this charge will remunerate not only the Fixed Revenue of the plants, but will also reimburse the cost of fuel associated with the inflexible generation portion - that is, the generation portion that will be carried out regardless of the determination of the National Electric System Operator (ONS) – as well as the Variable Unit Cost (CVU) associated with the flexible portion whenever the plant is dispatched to generate energy”, comments the expert.

As for the rest of the energy that should have been negotiated in the LRCE, completing the 2.000 MW defined by Law No. 14.182/2022, the MME told the press that it will look into the matter to legally analyze the treatment that should be given. If it is understood that a new auction should be held in 2022 to contract the remaining volume, the potential is that the cost to be borne by consumers should more than double.

However, for Michel Leodonio, even if this does not happen, as mentioned earlier, the legal determination is to contract a total of 7.000 MW by 2027, through auctions that will follow the same rules as the LRCE and, therefore, nothing else is expected in addition to continuous increases in the charges paid by the Brazilian consumer in the coming years.

Currently, Amazonas leads the use of natural gas for production of energy.