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Ministry of Mines and Energy (MME) Announces Cancellation of 2022 Energy Auction Due to Lack of Demand from National Distributors

Written by Ruth Rodrigues
Published on 18/08/2022 at 10:54
Updated on 18/08/2022 at 10:55
A queda na demanda por novos projetos de energia no setor nacional motivou o MME a anunciar o cancelamento do leilão que estava previsto ainda para este ano, além da geração distribuída no setor.
Fonte: Governo Federal
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The Drop In Demand For New Energy Projects In The National Sector Led The MME To Announce The Cancellation Of The Energy Auction That Was Scheduled For This Year, Beyond Distributed Generation In The Sector.

The Ministry of Mines and Energy (MME) announced the cancellation of the energy auction that would take place during the year 2022, aiming to attract investments for the national energy market. However, the low demand from distributors in the sector ultimately led the agency to set aside the search for new investors and now shift efforts to market issues.

Energy Auction A-6 Scheduled For 2022 Was Canceled By The MME After Analyzing The Drop In Demand From Energy Distributors This Year 

The week started off busy for the Brazilian energy sector, as the MME has just announced the official cancellation of the new energy auction A-6, scheduled to take place this year, due to the low demand from distribution companies in the national territory.

The auction’s main objective was to attract new projects for wind, hydroelectric, and thermoelectric generation (biomass, natural gas, and MSW) for supply starting January 1, 2028.

“The cancellation of Auction A-6 results from several ongoing measures, such as the proposal for market opening, the expansion of distributed generation, and the deregulation of Eletrobras plants. Thus, there was no declaration of need for the purchase of electricity by the energy distributors for Auction A-6 of 2022,” the MME stated in a recent public announcement. 

Although the energy sector has been experiencing strong growth in the national market in recent months, the opening of free trade for the hiring of new companies that ensure resource supply has diverted demand from distributors to other areas.

Therefore, the MME decided to focus on other energy sector projects in the country at the moment, such as the A-5 energy auction, which is still scheduled to take place this year. 

Despite The Cancellation Of Auction A-6 Due To The Lack Of Demand From Distributors In The Country, The MME Confirmed The Continuation Of Auction A-5 For Next Month 

The announcement of the cancellation of Auction A-6 by the MME also confirmed the continuation of Auction A-5, planned for September 16. The auction forecasts the start of energy supply for the projects to be contracted in the competition on January 1, 2027. 

Thus, the MME anticipates the negotiation of Energy Commercialization Contracts in the Regulated Environment (CCEARs) for an initial period of 20 years, aimed at supplying hydroelectric generation plants, small hydroelectric plants, and hydroelectric plants with a capacity equal to or less than 50 MW. 

Additionally, the A-5 energy auction also anticipates the contracting of wind and solar photovoltaic projects and their expansions with a supply period of 15 years. Finally, the supply modality of 20 years will be aimed at energy recovery from urban solid waste, thermoelectric plants using biomass, and national coal and biogas.

The MME will now seek, through the A-5 energy auction, to attract new investments and interest in energy production in Brazil, aiming to restore growth in the demand from national distributors in the segment. New updates on the future of energy auctions in Brazil should be released in the coming months.

Ruth Rodrigues

Formada em Ciências Biológicas pela Universidade do Estado do Rio Grande do Norte (UERN), atua como redatora e divulgadora científica.

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