CCEE to avoid issues at power capacity tender

Brazil's power capacity tender in November will be important for the sector and should avoid problems like the ones experienced during last year's auction, power clearing house CCEE said.

At the first capacity tender ever held in the country in December, participation of plants with fuel costs (CVU) above the government cap led to 638MW of the tender's contracted capacity being overruled.

The November capacity auction is expected to follow the same pattern but avoid these first time issues.

The new style of tenders represents a key update to the sector by defining the cost of power stability. This can help reduce the risks of power shortages resulting from the increased use of intermittent generation, such as wind and solar, and by sharing the reliability costs with all consumers — currently only consumers getting power through local power distribution companies are paying for the reliability attribute.

The government has set seven other power tenders for 2022 to supply the country in four, five, six, one and two years. The first tender, to supply power in 2026, is scheduled for May.

By Rebecca Gompertz