The energy market is attentive to the results of the gas-fired power plant auction, scheduled for Friday (30). Those who follow the sector believe that the event will define the strength of the lobby in defense of public funding for the expansion of the gas pipeline network in Brazil.
The requirement to build these thermal plants was included, via amendments, in the provisional measure for the privatization of Eletrobras. As they had nothing to do with the privatization of the company, the gas-fired thermal expansion project became known as Eletrobras’s tortoise.
Under the argument that it is necessary to promote the use of gas in Brazil, the parliamentarians demanded the offer of 8 MW (megawatts) with projects where there are no pipelines to carry the gas or transmission lines to transport the energy to consumer centers. The plants are also inflexible — that is, they cannot be shut down.
Experts in the energy sector question the measure, claiming that it makes no technical sense, that the gas will increase the electricity bill and the cost in Brazil and that the implementation of the infrastructure of these projects also tends to weigh on consumers’ pockets.
In this first auction, in the capacity reserve modality with 15-year contracts, 2 GW will be offered. The generation of 1 GW needs to be installed in metropolitan areas of the North region, with delivery starting in December 2026. The other 1 GW is for the Northeast, specifically 700 MW in Piauà and 300 MW in Maranhão, as of December 2026. 2027
37 projects presented a physical guarantee to apply for the auction, totaling almost 12 GW, but the final list of those qualified to participate in the auction was not disclosed by the EPE (Energy Planning Company).
The ceiling price was R$ 444 per MWh (megawatt-hour) and is considered a cut-off, as it limits gains and the room for maneuver to take risks. During the public hearing, for example, distributors claimed a ceiling of BRL 600 to BRL 700.
Experts argue that only a select group of investors are able to participate, when considering the value of the ceiling, the limitations on gas transport in these regions and the instability in gas supply due to the unfolding of the Ukrainian War. Russia is an important producer that has been messing with the price and supply of gas on a global scale.
Piauà is pointed out as a critical place. Eight projects were submitted, but if rationality prevails, experts say, no investor should submit a proposal.
The reading in the sector is that if plants win in Piauà there will be a new onslaught in defense of the expansion of the gas pipeline network, with special attention to the Meio Norte Gas Pipeline. In the drawer for years, this pipeline with almost 1,000 km would connect the port of Pacém to São LuÃs (MA), crossing the capital of PiauÃ. In Pecém there is already a liquefied natural gas terminal.
The construction of the Meio Norte would demand from R$ 3 billion to R$ 5 billion, according to market estimates.
The gas guarantee would also enable Gaspisa, a gas distributor that does not operate due to lack of input, and whose partners are the government of the state of Piauà and businessman Carlos Suarez.
The sector’s lobby has already tried numerous times to transfer the expansion of the gas pipeline network to public funds, through the insertion of amendments in projects that were in progress.
The most recent initiatives have tried to create Brasduto, a fund with resources from pre-salt royalties. As the solution would take resources from the social area, it has been overturned. There is a fear that the Brasduto proposal could be revived with a jabuti amendment in PL (Bill) 414, which deals with the restructuring of the energy sector.
In Maranhão, the scenario for the auction is complicated, but with a higher operating margin. Investors have the option to receive LNG (Liquefied Natural Gas) via the port, as long as they assume price and supply risks.
Eneva is the best-positioned company in the dispute in this state, as it owns five gas fields already in production in the ParnaÃba Basin (MA). The guarantee of local input is considered the great asset for this auction, but it requires the construction of a gas pipeline of about 300 km.
However, analysts believe she tends to focus efforts in the North, where she is a favorite. Eneva explores Azulão, in the Amazon Basin (AM), and is already using the field to supply the Jaguatirica II thermal plant, in Boa Vista (RO), the only capital isolated from the national energy system. The gas is transported by trucks. The company also owns the Juruá field, in the Solimões Basin (AM).
According to Sheet found, Global is also considering entering the dispute in the North with a group of three plants, Manaus and Manaus I and II. Its input supply alternative is in the Urucu Complex, one of the largest onshore reserves, with seven fields in the Solimões Basin (AM).
Eletronorte is considering participating with the Rio Negro (AM) plant. In theory, according to those accompanying the event, the company, now privatized, can take advantage of part of its local infrastructure and be supplied by Cigas (Companhia de Gás do Amazonas).
Abegás (Brazilian Association of Piped Gas Distributors) tried, at the last minute, but failed, to raise the price of energy to R$ 550 per MWh. Still, he believes in the success of the event. The entity was one of the supporters of the auction claiming that the thermal plants can act as anchors to take gas to regions not yet served.
The projects of this first event will need 4 million m3/day (cubic meters per day). Abegás even proposed that PPSA (Pré-sal Petróleo SA), Petrobras’ pre-salt arm, manage gas production for these projects and offer 15-year contracts. However, the state-owned company said it did not have enough gas.
In any case, the entity says that the auction contract gives almost six years for entry into operation, enough time to increase the supply of gas and investment in infrastructure to take the fuel to the regions where the thermal plants will be.
This Tuesday (26), the Instituto Internacional Arayara filed a civil suit in the Federal Court in BrasÃlia asking for the suspension of this Friday’s auction. The entity questions the financial and environmental costs of these plants. The Court, however, did not manifest itself until the publication of this text.
The National Front of Energy Consumers has among its goals to convince the new wave of parliamentarians and review the Eletrobras law to remove the mandatory construction of other plants.
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