Brazil’s next A-5 tender seen demanding US$2bn in investments

Brazil’s next A-5 power generation tender is expected to contract approximately 1GW of capacity, potentially requiring investments of 12bn reais (US$2.1bn). 

That is the forecast of Alessandra Torres, president of the Brazil's small hydroelectric plant association Abrapch. 

She suggested that the volume may vary since the demand of the power distributors is not made public. 

“We hope that at least 1GW will be contracted. But we depend on the distributors. There are times of day when there's a surplus of energy and late afternoons when there's a shortage of firm energy,” Torres told BNamericas. 

Scheduled for July 25, the A-5 auction will be open for new (greenfield) mini (CGH), small (PCH) and large (UHE) hydro plants. Currently, the construction of 1MW is estimated to require around 12mn reais. 

Some 225 projects totalling 2.88GW have been registered to participate, comprising seven UHEs (269MW), 173 PCHs (2,487MW) and 45 CGHs (128MW), located in 15 states (see the details here, in Portuguese).  

This is a record volume in terms of potency, according to federal energy research company EPE. The last A-5 auction held in 2022, had 1,516MW submitted to compete.  

“The volume registered was very significant. This shows that the [hydroelectric] source really is capable of greatly expanding its share of the matrix and that there are still investors willing to invest in it,” Torres said. 

Abrapch hopes to obtain environmental licenses for between 1GW and 2GW of the projects registered, including the UHEs, which, in this case, have the characteristics of PCHs, with between 30MW and 50MW of power. 

“We're working hard to deliver the environmental license by May. Qualification for the auction depends on this,” Torres underscored.