Thursday, March 20, 2014
New hydroelectric contracts due to be signed by 2015 will reduce Brazil’s generation costs by up to 5bn reais (US$2.3bn) per year, according to energy secretary Márcio Zimmermann.
Among existing plants earmarked for auction is the 807.5MW Três Irmãos facility, relinquished by São Paulo-based utility Cesp last year. Generators will bid for a 30-year operating concession for the plant on March 28.
Cesp’s decision to offload Três Irmãos came after the government’s controversial MP 579 bill, introduced in 2012, which cut utilities’ revenue as part of a a pledge to slash consumer power prices by 20%.
According to Zimmermann, the bill has lessened the impact of higher thermoelectric generation as hydroelectric output falters amid continued drought.
“[MP 579] has neutralized the cost of having to generate thermoelectric power this year,” Zimmermann was quoted as saying by local media.
Zimmermann’s comments come a week after the government pledged up to 21bn reais this year to lessen the impact of soaring spot-market costs on distributors.