Rousseff: New thermal plants auction planned for 2006

Brazil plans to auction the first licenses for the construction of thermoelectric power plants under the new power sector rules in 2006, newspaper O Estado de Sao Paulo quoted mines and energy minister Dilma Rousseff as saying. Thermal generation will be complementary in Brazil's generation park, but gas-fired generators will be important to raise the level of "trustworthiness" in the system, she told the newspaper. The first auction of new generating capacities, scheduled for September 2004, will be strictly for new hydroelectric plant licenses, and not hydro and thermo, as previously reported by BNamericas. In the September auctions, the government plans to grant licenses for the construction of 4.5GW generating capacity. The new plants should start producing in 2009 and will have 20-year energy sales contracts, Rousseff explained. Although she said electricity generation will be competitive, state-controlled companies, which account for more than half of Brazil's 85,200MW installed capacity, should still have what the newspaper described as an "important role", since they face the least financial troubles. However, the government will strictly oversee state companies' investment capacity, as they have limited autonomy for investments, which could be made in partnership with private companies. The new rules restrict distributors' room for maneuver in an attempt to guarantee that power is distributed according to regional needs and not market returns. A totally market-oriented system would "delete" poor states due to their low energy consumption, whereas the new rules will create a national manager of electricity contracts, which will determine which distributors get contracts on a regional basis, Rousseff said.