COVID-19 pandemic delays auctions in Brazil, says GlobalData

The Ministry of Mines and Energy (MEM) in Brazil, has indefinitely postponed the national energy generation and transmission auctions that were scheduled for May, 2020. This includes both the A-4 and A-6 auctions, as well as tenders for transmission lines. Before the pandemic, the nation’s three-year plan comprised an A-4 auction in the first half of 2019, 2020 and 2021, followed by an A-6 auction in the second half. With the occurrence of the pandemic, how this plan will get reworked, taking into consideration the indefinite delay, remains unclear, says GlobalData, a leading data and analytics company.

 Somik Das, Power Analyst at GlobalData, comments: “The A-4 energy auction, initially scheduled for May 28, offered around 51,438MW of hydro, wind, solar and biomass energy projects to compete in the bidding process. With a delay in the auctions, one can expect the renewable sector in Brazil to be negatively impacted.

 “However, the government stressed that it is not canceling the 2020 auctions, only postponing until the pandemic subsides. This stress from the government hints that it would ensure minimum impact of the pandemic on the electricity sector and the auctions would be held at the earliest once normalcy is restored.”

As of 2019, hydropower contributed to most of the energy generated in Brazil, with a total of about 5GW of newly completed plants in 2019.

Das continued: “The auctions’ delay will mean that hydro-based generation will be the highest source of generation in Brazil. If the loss of time in installing the renewable projects is made up by an escalated rate of installation, then the country would be able to stick to its renewable roadmap without incurring major losses.”

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