Delta Thermal Power Plant

active

The Brazilian company Usina Delta S.A., a subsidiary of Carlos Lyra Group, was granted an authorization to build a 31.9-MW sugar-cane residue fueled power plant located in the state of Minas Gerais (municipality of Delta). The power plant was named UTE Delta. In March 2002, the company signed a 30-year contract with the regulatory agency ANEEL allowing the company to build and operate the power plant. The power plant had already commenced operations as a captive unit prior to 2002 (self-supply), but the new contract allowed the trade of electricity also to large consumers in the unregulated market. Investment on the power plant was not available In 2014, the company took part in a bidding process to establish 30-year power purchase agreements with electricity distribution companies. The company won the contracts by offering the tariff of US$ 59/MWh (BRL 197 /MWh). The company committed to commence operations by 2019. The power purchase agreement required the power plant to expand its capacity to 71.9 MW. The investment committed to the expansion was estimated at US$ 9 million (BRL 30 million). Construction works commenced in October 2014 and were nearly concluded by December 2015. The company was granted the right to take part in the government program called Regime Especial de Incentivos para o Desenvolvimento da Infra-Estrutura (Reidi). Companies selected to take part in this program were given tax cuts in the acquisition of capital equipment and construction material acquired both in the domestic and international markets (this incentive represented a cost reduction of about 9.25%). In addition, the company was allowed to use accelerated depreciation methods of accounting for construction expenditures.