Data & analytics solutions

Insight 30 January 2020

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Report summary

Thermal power auctions are key drivers for future LNG and gas supply agreements in Brazil. In 2017, the thermal power auction mechanism was improved, increasing the possibilities for developers design creative approaches to win long-term power purchase agreements. In this insight we analyze how the auction framework works, which parameters are key to determine the competitiveness of a project, which are the possible strategies for each condition, why recent awarded projects succeeded and how market intelligence plays key role on increasing a developer's awareness.

Executive Summary
Procuring thermal power plants in Brazil: a uniquely crafted mechanism for a hydro-intensive market
Balancing the auction input parameters is key to assure the competitiveness of a project
Creative inflexibility declaration strategies unlock additional space for generating revenue
- Flexible projects
- Projects inflexible in the wet season
- Projects inflexible in the dry season
- Projects with constant inflexibility
Recent auction results highlight the success of multiple strategies
Assessing competitors’ strategies and auction conditions is vital for bidding successfully
Amid a growing renewable penetration in the Brazilian power mix, natural gas will have an increasing complementarity role

Tables and charts

This report includes 4 images and tables including:

ICB formula
ICB scenarios for different natural gas prices and inflexibility patterns
Recent auction results
Assessing competitors’ ICBs through market intelligence (illustrative figures only)