Solar photovoltaic (PV) surprises at A-4 new energy auction, taking the lead in capacity volume contracted and with a strong price reduction.

According to the Brazilian Photovoltaic Solar Energy Association (ABSOLAR), the results of the A-4 New Energy Auction (LEN A-4 of 2017) indicate a new level of competitiveness of solar PV in Brazil.


São Paulo, December 18th, 2017 - With a strong reduction of 55.7% compared to the initial offer price of R$ 329.00 / MWh, reaching an average sale price of R$ 145.68 / MWh (equivalent to US$ 43.88 / MWh), solar PV projects surprised positively in the LEN A-4 of 2017, held today (December 18th) by the Electricity Energy Trading Chamber (CCEE), in São Paulo (SP). According to the CEO of the Brazilian Photovoltaic Solar Energy Association (ABSOLAR), Dr Rodrigo Sauaia, these results indicate a new level of competitiveness of solar PV in the country, due to the reduction of prices of equipment, recovery of the Brazilian currency and fierce competition among entrepreneurs.

This was the first time that in an electricity energy auction solar PV projects sold energy at lower prices than hydropower plants and biomass thermoelectric plants. "The LEN A-4 of 2017 represents a strategic step in the resumption of investments in the solar PV sector, in line with the expansion of this renewable, clean and low environmental impact energy source in the Brazilian electricity matrix. Brazil gives an important signal to the national and international market by contracting 20 new solar PV power plants summing 574.0 megawatts (MW) of installed capacity to be injected in the national grid, for which private investments of more than R $ 2.5 billion by 2021 will be made" says Sauaia.

The solar PV projects contracted by LEN A-4 of 2017 are in the Northeast and Southeast regions, in the states of Piauí (240MW), Pernambuco (147 MW), Bahia (112 MW) and São Paulo (75 MW).


Sauaia also points out that, from a procedural point of view, the new methodology of a continuous auction was much more agile than the previous auctions in which solar PV projects participated. "Innovations in the auction mechanism allowed the conclusion of the auction in less than 2 hours, while previous auctions exceeded 8 hours of duration", he says. ABSOLAR greets the CCEE, the National Electricity Regulatory Agency (ANEEL) and the Ministry of Mines and Energy (MME) for carrying out this auction and congratulates the winners for their achievements", he adds. The CEO of ABSOLAR points out, however, that the success of an energy auction is defined not only by the average price or by the number of projects contracted, but also by the successful completion of projects construction and operation, providing electricity to the national grid. “In this way, from 2021 on we will have the clear measure of the success of this auction when contracted projects should start commercial operation," says Sauaia.