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Natural Gas Thermal Auction Ensures Construction of Three New Power Plants in Amazonas; Check Details

Written by Bruno Teles
Published on 17/11/2022 at 10:28
Leilão de térmicas a gás natural
Leilão de térmicas a gás natural (Foto/divulgação)
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On September 30, the Capacity Reserve Auction in the form of Energy 2022 (LRCE) was held at the Electric Energy Trading Chamber (CCEE), for the contracting of energy from new natural gas generation projects and thermoelectric sources

The auction was based on Law No. 14,182/2022, stemming from Provisional Measure No. 1,031/2021, which aims to establish the conditions for the privatization of Eletrobras. Initially, the text dealt only with the privatization of the state-owned energy company.

However, a requirement for the contracting of thermoelectric generation generated from natural gas in pre-defined volumes for the years 2026 to 2030 was added by the National Congress, totaling 7,000 MW of capacity for new plants.

In this regard, the Coordinator of New Business at Trinity Renewable Energies, Michel Leodonio, pointed out that the LRCE was only the first stage of the process to enable and expand the contracting of installed capacity in the region.

Thus, he clarified that: “This was just the initial stage, to enable the contracting, for a period of 15 years, of 1,000 MW of capacity in the North region, with the supply scheduled to start on 12/31/2026. In the Northeast, there was a subdivision into two products: one aimed at the contracting of ventures in the state of Maranhão and another in Piauí – with 70% of the total amount allocated to the latter, totaling more than 1,000 MW to be installed in the region, with supply starting on 12/31/2027.”

New Projects Focus on the North Region of the Country

On the other hand, according to data from the Energy Research Company (EPE), 37 projects were registered to participate in the auction, totaling a capacity of 11,888 MW. However, only three plants with a total capacity of 753.766 MW were contracted, all located in the North, with no proposals for the Northeast region.

In this way, 669.6 average megawatts (MW) of energy were negotiated, with no discount in relation to the ceiling price established for the Auction, set at R$444.00 per megawatt-hour (MWh).

Therefore, Leodonio states that “The total annual Fixed Revenue to be received by the sellers will be slightly less than 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.”

He then points out that: “It is also important to highlight that this charge will compensate not only the Fixed Revenue of the plants but will also reimburse the fuel cost associated with the inflexible generation portion – that is, the portion of generation that will be carried out regardless of determination from the National Electric System Operator (ONS) – as well as the Unit Variable Cost (UVC) associated with the flexible portion whenever the plant is dispatched to generate energy.”

Regarding the remaining energy that should have been negotiated in the LRCE, complementing the 2,000 MW proposed by Law No. 14,182/2022, the MME stated that it will assess the topic legally to determine what will be addressed.

If it is deemed necessary to hold a new auction still in 2022, the potential is that the cost to be borne by consumers may more than double.

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Bruno Teles

Falo sobre tecnologia, inovação, petróleo e gás. Atualizo diariamente sobre oportunidades no mercado brasileiro. Com mais de 7.000 artigos publicados nos sites CPG, Naval Porto Estaleiro, Mineração Brasil e Obras Construção Civil. Sugestão de pauta? Manda no brunotelesredator@gmail.com

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