Company says that the postponement could compromise the country’s energy security and sees good chances in the dispute with thermal plants with contracts to win
THE Enevaone of Brazil’s leading natural gas producers, is looking to the next LRCAP (Capacity Reserve Auction in the form of Power). The event, which aims to contract the power of plants to guarantee the supply of electrical energy in the country, there is still no date for it to be held.
According to Marcelo LopesExecutive Director of Marketing, Commercialization and New Business at Eneva, company believes he has a good chance in the competition with thermal plants that have contracts to win. He argues that the auction should be held as soon as possible, still in 2024, to ensure the country’s energy security in the coming years.
The urgency is due to the time it takes for the projects to come into operation, which ranges from 3 to 4 years. For a new thermal plant to come into operation in 2027 or 2028, it needs to be contracted in 2024. And by 2027, several thermal assets that are currently dispatching to the system will have their contracts coming to an end.
“The system has increasingly expanded with intermittent sources, such as wind and solar. And to meet safety requirements, there needs to be a percentage of dispatchable energy that the operator can control. But since we will have many thermoelectric plants with contracts ending by 2027, if we do not have a new contract, these assets may be hibernated,” it says.
Lopes draws attention to the fact that the electrical system has increasingly used thermal power plants, either to provide stability to the system with the advance of renewables or to fill the gap left by hydroelectric plants due to the severe dry period in 2024.
“Since June, the ONS has been using thermoelectric plants to meet the demand for power. And now this is becoming more critical because the hydrology is very bad. So we are worried if the auction does not happen this year, with operations starting in 2028, because if another water crisis comes we may need an emergency auction, which is not ideal.”he stated.
Eneva is an integrated energy company. In the production segment, it operates 14 natural gas fields in the Parnaíba (MA) and Amazonas (AM) basins, totaling a concession area of over 63,000 km².
In the generation area, the company owns thermal plants with 5.9 GW of capacity in the states of Maranhão, Ceará, Sergipe and Roraima. It recently announced the purchase of 6 thermoelectric plants from BTG Pactual which add up to 0.8 GW of capacity in Espírito Santo.
Marcelo Lopes states that Eneva has 1 GW in plants that will be decontracted, such as the Parnaíba 1 and 3 thermal plants, which have a supply contract until 2027. In 2026, the contracts with the recently purchased thermal plants in Linhares, Viana and Povoação will end.
The company also plans to expand its generating park in Sergipe, with an investment to expand 1.5 GW of its power capacity. “These are our priority projects that we believe are competitive for the auction”it says.
The Eneva executive criticizes attempts to enter the auction made by other sources, such as battery technologies, which he claims are not yet mature enough, or even hydroelectric power, given the supply risks during dry periods.
“We are concerned about other segments that want to participate in this auction, which is to hire security in view of the low reliability and intermittency of other sources. It would be inconsistent to include sources that do not deliver this reliability in this auction.”he says.
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