The A-3 auction for the rights to build power projects operational from 2015 was originally meant to take place in March, and was subsequently postponed until September and then October. The auction will now take place on 12 December.
At the same time as announcing this further delay, Brazil's federal government also confirmed it was pushing back the date of the A-5 auction for projects operational from 2017 - also scheduled for October - to 14 December. So far hundreds of projects totalling 16GW in installed capacity have been registered for the two auctions.
The chief reason for the auction delays by EPE, Brazil's Energy Planning Company, has been the cooling down of the country's economy, which saw GDP growth fall from 7.5% in 2010 to 2.7% in 2011, in turn shrinking projected power consumption for 2015 and beyond.
EPE has said the decision on the go ahead of the A-3 auction will depend on whether power regulator Aneel cancels concessions for five power plants totalling 1GW, which were meant to be operational by 2013 but on which construction is yet to start.
Local developer Bertin Group has been unable to build the plants due to financial troubles, and if Aneel decides to strip it of its rights to develop the projects, it will then run the A-3 auction. But the shrinking projection of power consumption means there is no room for both the Bertin projects and the A-3 projects to proceed.
However, developers have failed to be discouraged by the delays.
Renova, which already operates some 200MW in wind power and has another 1GW contracted, registered 270MW in projects for this year's auctions. Renova investor relations officer Pedro Pileggi said the firm has signed an average of 200MW in yearly contracts and plans to continue at this rate to guarantee its growth plan.
Other companies confirmed their interest in the auction. EDP Renovaveis said it registered one project for the auction and reaffirmed its interest even as operation dates have been postponed. Eletrosul, the southern unit of federal power company Eletrobras, also confirmed its interest with 404MW registered for the A-3 auctions.
"We consider the A-5 more risky because it is too long for projects that take less than three years to build," said Ronaldo dos Santos Custodio, engineering and operations director at the company.
Future uncertain
A key driver behind the hesitance of utilities such as Eletrosul to make long-term plans for investment as required by the A-5 auctions is uncertainty over new rules regarding the renewal of expiring 30-year concessions of all utilities. According to specialists, the new rules affect how power companies calculate assets, cash flow and investment capacity. This includes all power distribution concessions and most large generation companies holding hydroelectric concession contracts, some of which have invested in wind-power generation.
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