Government Aims to Replace Oil Power Plants with Pre-Salt Gas Starting in 2020

Written by Renato Oliveira

Published on 24/07/2019 at 11:21

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The Government’s Idea Is to Change Auction Rules for Hiring New Plants, Replacing About 5,000 Megawatts of Oil Thermal Capacity, with Contracts Expiring by 2025, with New Gas Units

NFollowing the launch yesterday (07/23) of the “New Gas Market” program, which aims to reduce fuel costs, the federal government is studying changes to the upcoming auction rules starting in 2020.
The idea is to maximize the exploration of new gas fields in the pre-salt and enable the replacement of thermal plants using oil with new plants that would use gas as fuel.

It is estimated that there are 5,000 megawatts in contracts for oil thermal plants expiring by 2025, and with the lowering of gas prices, the plan is to auction new thermal plants, but powered by gas.

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According to the Planning Secretary of the Ministry of Mines and Energy, Reive Barros, “In 2019, all guidelines remain, but in 2020 and 2021, we may have substantial changes in the auction guidelines, starting in 2020.”

In addition to the new demand due to the new auctions, the government also intends to change the fuel for thermal plants under contract with Petrobras, which are governed by an old program from the year 2000.

New Contracts

The Ministry of Mines and Energy also intends to close long-term contracts to meet demand during peak hours.

“We need to provide the necessary conditions for demand (for gas), and thus use the gas (that will be produced) in the pre-salt, as well as imported gas,” stated the secretary.

With the change in the auctions, it will be possible for the government to buy energy beyond the demand presented by the distributors, which would allow the entry of large thermal plants into the auctions.
This rule previously existed but was canceled because distributors ended up with excess energy and incurred losses.

As the government works with a scenario of economic recovery, it is well known that distributors no longer have surplus energy as in the past.

Government Aims to Replace Oil Power Plants with Pre-Salt Gas Starting in 2020

The Government’s Idea Is to Change Auction Rules for Hiring New Plants, Replacing About 5,000 Megawatts of Oil Thermal Capacity, with Contracts Expiring by 2025, with New Gas Units

Major Oil, Gas, and Energy Event Will Take Place in Brazil: Macaé Energy Will Gather Petrobras, Equinor, Prio, Among Other Suppliers and Energy Executives for Business, Networking, and Employment Opportunities

New Contracts

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