Electric power auctions - Wind

Under the New Model regulatory structure introduced in Brazil in 2004, most new power projects participate in auctions for long-term power purchase agreements (PPAs) with energy distributors organised by Brazils electricity regulatory agency (Agência Nacional de Energia Elétrica, ANEEL). Energy distributors are required to enter into long-term contracts for all of their electricity demand via a reverse auction system. Under the auction system, there are specific auctions for existing energy sources, and those for new energy sources, including renewable energy. ANEEL also carries out reserve energy auctions, designed to purchase additional energy supply for the National Integrated System (SIN) in order to reduce operational costs of the system. Within the new and reserve energy auctions, some are targeted at specific energy sources. In December 2009, Brazil held its first wind power producer-only reserve energy auction. The auction allows wind power producers to sell excess energy to energy distributors and industrial buyers, and is also intended to provide an incentive to producers to increase energy output. The government auctioned 1,805 MW of power from 71 projects, selected out of the 339 projects presented totalling 10,055 MW of power. The power purchase contracts are to begin in 1 July 2012 and last 20 years, and the average final price was of BRL 85/MWh. The Brazilian government has announced that auctions targeted at wind energy generation will continue.

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