Outcomes from the first large-scale solar PV auction in Brazil

Auctions have been used to promote renewables and introduce new technologies, and Brazil has a tradition in this field. The Brazilian government designed a framework with the goal of introducing solar PV into the power mix that includes contracts to reduce the risks for investors. The first large-scale auction for this technology was held in October 2014, and the process achieved an average price reduction of 17.26% below the starting price. The auction process was also successful with respect to new contracted capacity, with 31 new power plants and 889.7 MW (AC) of new capacity. Observed capacity factors of winning bids were high, but they were in accordance with new technologies and recent studies. Nonetheless, the regulatory agency must monitor generation performance. Higher investments are likely related to the deployment of tracking technology, reflecting a higher capacity factor. Furthermore, the Brazilian case is unique due to long-term experience and large scale in using auctions for renewables, such as wind and biomass. Lastly, Brazil's example is relevant in international debate given that the country replaced its Feed-in-Tariff program for auctions in 2005, a point that is worth studying in its own right.