New Energy Auction – LEN A-6, 2019

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Holding auctions for the purchase of electricity, especially those for new generation projects, is the basis for the expansion of the Brazilian electrical system. In order to meet the demands of distribution agents of the National Interconnected System (SIN), on 3/1/2019, through MME Ordinance No. 151, the estimated dates for holding auctions for the purchase of energy from new energy projects were announced. generation, or New Energy Auctions (LEN), including the “A-6” Auction. MME Ordinance No. 222, of May 6, 2019, established the guidelines for holding the auction for the purchase of electricity from new generation projects, called “A-6”, of 2019, whose selection criteria were based on lower price of energy offered (in R$/MW), observing the demand partition strategy between sources defined by the Ministry of Mines and Energy (MME), as well as the relative supply of each source in the auctions. The negotiated Energy Trading Contracts in a Regulated Environment (CCEARs) have a term of 20 years for wind and solar photovoltaic sources, 25 years for biomass, natural gas and mineral coal sources and 30 years for hydraulic sources, starting of supply on January 1, 2025. Through CPPI Resolution No. 53, of May 8, 2019, the “A-6” New Energy Auction was recommended for qualification in the Investment Partnership Program (PPI). The project was qualified in the PPI through Decree No. 9,973, of August 14, 2019. The Auction that took place on October 18, 2019 involved R$44 billion in contracts, equivalent to the amount of 250,148,822 MWh of energy. The contracts enable investments of around R$11.2 billion. At the end of the negotiations, 91 generation projects were contracted, 27 hydro plants, 44 wind plants, 11 solar photovoltaic plants and 9 thermal plants (6 powered by biomass and 3 by natural gas), totaling 1,155 average MW of contracted energy. The average price at the end of negotiations was R$ 176.09 per MWh, with a discount of 39.5% in relation to the established price ceilings. All documents related to the auction, as well as its results, are available at: https://www2.aneel.gov.br/aplicacoes/editais_geracao/documentos_editais.cfm?IdProgramaEdital=181