Brazil awarded 1,024.5 MW of clean power supply contracts in an energy auction held on April 4, 2018.

Reflecting solar's increasingly competitive pricing in Brazil, solar PV accounted for approximately 80% of total contracted capacity (806.6 MW). The final average price for solar was 118 BRL (US$35.2)/MWh, according to a report in PV Magazine.

The remaining capacity was allocated to wind (114.4 MW), biomass (61.8 MW), and small hydro projects (41.6 MW).

The April 2018 auction was the fifth national auction in Brazil that included solar PV. In the previous four auctions held between 2014 and 2017, a total of approximately 3.5 GW of large-scale PV capacity was allocated.

Also in April, Brazil's Ministry of Mines and Energy announced plans to hold a new energy auction on August 31, 2018 to contract power from wind, hydro, and thermal plants (biomass, natural gas and coal). The government will award power purchase agreements (PPA) with a term of 30 years for hydro, 20 years for wind, and 25 years for the other sources, according to a report in Renewables Now.

Brazil's National Economic Policy Council recently eliminated state and federal government taxes on power generated from small-scale renewables, according to Bloomberg New Energy Finance's Week in Review. The move is expected to encourage homeowners and small businesses to generate electricity from renewables such as rooftop solar. The country’s energy regulator, ANEEL, estimates rooftop solar in Brazil could reach 2GW of capacity by 2024 if all states agree to drop the tax.

Brazil postponed an auction to sell rights to build a controversial 8,000-MW hydroelectric dam on the Sao Luiz do Tapajos River in the lower Amazon Basin, Reuters reports. The $13 billion project had outraged environmentalists and indigenous rights groups. "The dam on Sao Luiz do Tapajos that was planned for auction this year will be pushed back until next year," Altino Ventura, the Energy Ministry's secretary for development, told reporters in Sao Paulo. The Energy Ministry said that the consortium of companies planning the project had not fully addressed the concerns of nearby indigenous communities. Recently auctioned mega-dams in the Brazilian Amazon have fallen far behind schedule due to delays in environmental approval, labor protests and occupations of the dams' sites by indigenous groups.

In Brazil's most recent national power auction held on June 6, wind won 551MW, more than half of of the 968MW contracted. Bloomberg New Energy Finance (BNEF) projects 2.7GW of wind build-out in 2014, and 3.7GW in 2015. 

Brazilian presidential candidate, Eduardo Campos, proposed incentives for renewable energy in a set of guidelines outlining his new coalition’s policies. The guidelines include tax, fiscal and credit incentives to spur wider use of clean energy, according to Bloomberg. Campos is currently the governor of Pernambuco state, which held Brazil's first solar-only auction in December 2013. Former environment minister Marina Silva, best known as a champion for conservation of the Amazon forest, forged an alliance in October 2013 with Campos’s Brazilian Socialist Party.

The Brazilian state of Pernambuco held Brazil's first solar-only auction on Dec. 27, 2013. A total of 122.82MW of solar projects were approved at a final clearing price of $98/MWh over a 20 year contract. Competing in the auction were 34 project bidders – six from Brazil along with others based in China, Germany, Italy and Spain.

The final clearing price of $98/MWh was above the range that has been suggested by solar industry representatives ($83 to $87/MWh) yet it was lower than the ceiling price of $109/megawatt-hour set by the state, indicating a win-win for both the solar industry and electricity customers. According to the Pernambuco government, the solar auction attracted BRL597 million ($253 million) in investments. The winning projects have to be installed within 18 months and are expected to generate thousands of construction jobs.

The six winning contracts in Pernambuco state were awarded as follows:

• Italian renewable energy developer Enel Green Power: two 5 MW plants in Tacaratu.
• The local subsidiary of German renewable energy company Sowitec: 30 MW plant in Santa Maria da Boa Vista.
• Brazilian company Kroma Comercializadora de Energia Ltda: 29.2 MW plant in Flores.
• Brazilian company Cone Concierge S/A: 22.8 MW plant in Cabo de Santo Agostinho.
• Chinese-Spanish company Sun Premier Holding Participações Ltda:  29.7 MW PV plant in Joaquim Nabuco.

Brazil currently has only approximately 20 MW of installed solar and virtually no grid-connected solar. GTM solar research analyst Adam James terms the Pernambuco auction a "huge step forward" that places Brazil firmly in the running to become a dominant force in the Latin America PV market alongside Mexico and Chile in coming years. Commenting on the Pernambuco auction, Frost & Sullivan energy and environmental research analyst Vinicius Vargas told PV Tech that further state level auctions were likely in Brazil in 2014, rather than national-level auctions.

More than 63,500 MW of new power generation capacity will be installed in Brazil by 2022, according to the government's ten-year power expansion plan, PDE 2022. The plan calls for the majority of new capacity to be large hydropower, which has dominated Brazil’s electricity matrix for decades. However, the International Energy Agency (IEA) expects multiple factors to constrain hydropower’s expansion. Most importantly, environmental and social sensitivities are expected to increase over time due to the nature and location of Brazil’s remaining hydropower resources, which are heavily concentrated in the Amazon region. Large hydropower projects in the Amazon rainforest (more than 20,000 megawatts are contracted or under construction) are far from the main centers of demand and face resolute opposition from indigenous peoples and civil society organizations. If the Amazon were to be off-limits for new hydropower projects, a scenario the IEA World Energy Outlook 2013 contemplates, a significant portion of new capacity would shift to other sources.  

Wind farms won all the contracts in Brazil's November 18, 2013 A-3 auction for new power capacity. Developers of thirty-nine contracted projects will install 868 MW of capacity and sell energy at an average price of 124.43 reais ($54.87) a megawatt-hour, according to EPE. Wind, solar, small hydro, and biomass competed in the auction. Brazil is on track to auction more than 3,000 megawatts of wind in 2013, the most ever, Elbia Melo, president of the wind energy trade group Associacao Brasileira de Energia Eolica (ABEEólica), told Bloomberg. That will benefit turbine suppliers including France’s Alstom SA (ALO) and Spain’s Acciona SA that are investing in factories to meet a local-content requirement.

Three Brazilian industry associations, The Brazilian Association of Independent Power Producers (APINE), the Industry Association of Cogeneration (COGEN), and the Brazilian Electrical and Electronics Industry Association (ABINEE), are preparing to send the government a proposal for solar only auctions. The three 500MW auctions will be held in 2014, 2015, and 2016, according to COGEN. Solar energy would be supplied for 25 years starting in 2016.

As reported in PV-Tech, executive vice president of COGEN, Leonardo Calabró, said a reasonable price for the auction to offer is BRL190 (US$83) to BRL200 (US$87), per MWh, as solar is not yet competitive with wind and other energy sources in Brazil. He said it was therefore unfair for solar to compete in this year's A-3 and A-5 energy auctions; the first national auctions open to include solar projects. The proposed plan also includes two auctions for other renewable energy projects, in 2015 and 2016, which could expand to include biomass, wind and hydro.