Brazil's Aneel increases auction rate for small hydroelectric plants

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Brazilian power regulator Agencia Nacional de Energia Eletricqa (Aneel) has announced a plan allowing power developers to seek higher rates for energy generated by small hydroelectric projects to be auctioned during an upcoming A-5 power sale in April.

The increase is intended to maintain interest in the country's small hydro sector after the Banco Nacional de Desenvolvimento Economico e Social (BNDES) cut its financing for small plants from a maximum of 70% to 50%.

Now, Aneel will allow a cap of US$65.8 p/MWh generated by small hydropower projects -- up from about $51.4 p/MWh from an auction in November and $46.4 p/MWh from an auction in June.

Brazilian energy auctions have Aneel-established ceilings, with developers bidding to supply power generated by the proposed projects. Contracts are then awarded to whichever company bids lowest.

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