Electric power auctions - Biomass

Under the New Model regulatory structure introduced in Brazil in 2004, most new power projects participate in auctions for long-term power purchase agreements (PPAs) with energy distributors organised by Brazils electricity regulatory agency (Agência Nacional de Energia Elétrica, ANEEL). Energy distributors are required to enter into long-term contracts for all of their electricity demand via a reverse auction system. Under the auction system, there are specific auctions for existing energy sources, and those for new energy sources, including renewable energy. ANEEL also carries out reserve energy auctions, designed to purchase additional energy supply for the National Integrated System (SIN) in order to reduce operational costs of the system. Within the new and reserve energy auctions, some are targeted at specific energy sources. In 2008, Brazil held its first biomass-only reserve energy auction. The government auctioned 2,379 MW of power from 31 thermoelectric plants using sugarcane and napier grass as an energy source. The energy auctioned was to be supplied as of 2009 and 2010, with power purchase contracts extending for 15 years. The average final price was BRL 58.84/MWh.

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