Market roundup: Massive energy auction aims to solve renewable energy bottlenecks

Wind power farm in Tramandaí, Rio Grande do Sul. Photo: Lucas G. Amaral/Shutterstock

Brazil’s largest energy auction aims to eliminate renewable bottleneck

Every year, more and more wind and solar power plants are being built in Brazil, mostly in the country’s Northeast, where climatic conditions are ideal. Most energy consumers, however, are located in the Southeast.

State of play. An energy distribution auction held on Friday, the largest of its kind to date, attracted international and national players interested in investing BRL 15.3 billion (USD 3.2 billion) to solve this bottleneck, just BRL 400 million less than the maximum bid estimated by the regulatory agency Aneel.

To expand the transmission system in the south of the Northeast (Bahia, Pernambuco, and Sergipe) and in the north of the Southeast states (Minas Gerais and Espírito Santo), the auction included 33 projects with a total of 6,184 kilometers of power transmission lines.

Additional load. The auction also included the construction of substations with a transformation capacity of 400 megavolts-amperes (MVA) because, according to the Brazilian association of electricity distribution Abradee, the growth of wind and solar generation has caused a reversal in the flow of electricity in...

Fabiane Ziolla Menezes

Former editor-in-chief of LABS (Latin America Business Stories), Fabiane has more than 15 years of experience reporting on business, finance, innovation, and cities in Brazil. The latter recently took her back to the classroom and made her a Master in Urban Management from PUCPR. At TBR, she keeps an eye on economic policy, game-changing businesses, and people driving innovation in Latin America.