Process Begins To Replace Oil-Fired Power Plants With Natural Gas

Replacement by Natural Gas and Coal Is the Focus in Process Initiated by the Government and Launch of Public Consultation, Which Happened This Friday (08/30)

As previously announced by Click Petroleum and Gas, Government Aims to Start Replacing Oil Thermal Plants with Pre-Salt Gas by 2020.
Thus, the government launched, through the MME, a public consultation aimed at the A-4 auction scheduled for March 31, 2020.
According to the document, the plants, which can be natural gas or coal and either new or existing, must be ready to operate by December 31, 2023.

The new plants contracted will replace existing oil plants with contracts expiring in 2023, and the MME announcement states: “This auction aims to restore contracts of distributors from the new energy auctions held in 2005, 2006, and 2007, as well as remaining contracts from the priority thermoelectricity program (PPT).”

The oil thermal plants have high operating costs and are considered financially unviable according to a survey conducted by the government.
The government wants to gradually replace them with other (new or existing) plants that are cheaper and less polluting, and this will be the first auction of its kind that the MME will promote.

Coal Is a Newcomer

Plants powered by coal will also be able to participate in the bidding, and contracts for the winners will last for 15 years. The public consultation runs until September 11, according to the MME.

Another bidding process eagerly awaited by the energy market is the new energy auction A-6, as it is expected to involve Petrobras; however, it has been postponed to October 18 and is expected to signal the future price of gas, already under the effects of market liberalization following the launch of the New Gas Market by the federal government.

Read Also! Petrobras Orders 34 Anchoring Torpedoes for FPSO Mero 1 from Company in Belo Horizonte!