Brazil’s national electric company just wrapped up an auction for contracts with wind, biomass, hydro and natural gas developers. And for the first time ever, the price per megawatt-hour from the wind plants came in below the price for natural gas.
The auctions covered 44 new wind projects worth 2 GW of capacity. The owners of those wind farms signed contracts to sell electricity for 99.58 reais ($61.93) a megawatt-hour — about 6.2 cents per kilowatt-hour. The prices for natural gas projects came in at 103 reais per MWh ($64.48). The price difference isn’t staggering, but it marks a major downward pricing trend for wind, which was priced 19% higher on average in auctions last year.
The Brazilian government issued a press release after the auctions:
These energy auctions were the first in Brazil for 2011. [The President and CEO of Brazil’s Energy Research Company (EPE), Mauricio] Tolmasquim noted that they were significant for two key reasons: they reflect a new feasibility of market competition between wind and natural gas sources – something unheard of internationally; and they demonstrate that wind prices continue to fall in Brazil.
“That wind power plants have been contracted at two digit prices, below R$ 100/MWh, showcases the energy market competition through auctions. That wind power could reach these lows vs. natural gas was unimaginable until recently,” said Mr. Tolmasquim.