Brazil to Allow Energy Developers to Seek Rate Hike

Brazil to Allow Energy Developers to Seek Rate Hike

With Brazil’s development bank BNDES offering less financing for small hydroelectric power projects, the country’s energy regulator will let developers seek higher rates at an energy auction planned for next month.

The regulator, Aneel, approved a ceiling price of 210 reais ($65) a megawatt-hour for small hydro projects, typically with 50 megawatts of capacity or less. That compares with maximum prices of 164 reais a megawatt-hour in a similar auction in November and 148 reais in June.

BNDES, formally Banco Nacional de Desenvolvimento Economico & Social, will now finance no more than 50 percent of small hydropower plants, compared with 70 percent in the past, according to Andre Pepitone da Nobrega, director of Aneel.

In Brazil’s energy auctions, regulators set a ceiling and developers bid down the price at which they are willing to provide electricity from planned projects. The lowest bids win contracts to sell power.
Regulators set a ceiling price of 281 reais a megawatt-hour for thermal plants that burn coal, biomass and natural gas for the April 30 auction. The projects must be complete within 5 years.

Source: Bloomberg


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