The upcoming power auction in Brazil has registered 400 solar PV projects which have a total capacity in excess of 10.5 GW.
The state of Bahia is by far the leader, in both projects and capacity applications, accounting for 40 per cent of the total. The PV project size averages range from 9 MW to 30 MW, depending on the state, with a total auction average PV project size of 27 MW.
Figure 1: Reserve auction solar PV applications by state
The solar PV projects will be competing not just against each other, but also with other renewables (wind and biogas projects). The auction will set a ceiling price for produced energy on a megawatt-hour basis and then each project will submit an individual bid. Only the most competitively priced projects will be selected for 20-year power purchase agreements.
Brazil has had several auctions previously, but only a state-based auction in Pernambuco saw a specific focus on PV. In fact, none of the previous federal auctions selected any PV projects to proceed.
While Brazil would seem an ideal place for solar power, there are still several challenges remaining, including high import tariffs on PV components and domestic content requirements for certain types of project financing.
However, according to NPD Solarbuzz research, the Brazilian market is forecast to be one of the strongest PV markets in the Latin America and Caribbean region. If PV projects can be competitive against other power sources, it is likely that the market will grow rapidly.
Originally published by NPD Solarbuzz. Reproduced with permission.