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Brazil’s A-4 and A-5 thermal power auctions: Petrobras’ strategy to win

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30 June 2021

Brazil’s A-4 and A-5 thermal power auctions: Petrobras’ strategy to win

Report summary

On 25 June, Brazil’s Chamber of Electric Energy Commercialization held the A-4 and A-5 existing energy auctions. These two auctions aimed to re-contract existing thermal power plants and allowed new thermal power projects to compete. 36.3 GW of power projects were registered. From the buyers’ side, just three local distribution companies (LDCs) requested demand, totalling 162.5 MWavg. Petrobras’ flexibility, variable cost per unit and fixed revenues submitted for its Cubatão thermal power plant made it the sole winner in both the A-4 and A-5 auctions. In this insight, we explore: The inflexibility declared for different thermal power plants. What Petrobras’ fully flexible strategy means for Brazil’s gas market. The fixed revenues and variable cost per unit used by Petrobras for its power plants. The differences between Cubatão’s submitted and real CVUs. Why LDC electricity demand was so low in these auctions.

Table of contents

  • Executive summary
  • Thermal power competition
  • Auction results
    • Cubatão’s real CVU and operation
    • LDC electricity demand

Tables and charts

This report includes 8 images and tables including:

  • Seasonal inflexibility declared in selected power plants
  • Main parameters of Petrobras’ bids
  • Latest ICB strategies adopted by Petrobras
  • Submitted CVU of Petrobras’ qualified power plants
  • Cubatão’s forecast CVU
  • Recent auction winners’ forecast CVU in 2025 vs CVU submitted at auction
  • Daily operation of Cubatão power plant by dispatch reason (2010-2019)
  • Future estimated yearly requirements by contract type

What's included

This report contains:

  • Document

    Brazil’s A-4 and A-5 thermal power auctions: Petrobras’ strategy to win

    PDF 1.19 MB