There are six lots of almost 710 kilometers of transmission lines and substations, with investments of R$3.51bn
12/15/2022
The power transmission auction scheduled for Friday at exchange B3’s headquarters in São Paulo is expected to draw traditional groups, ample competition, and strong discount. The six lots offered in the event held by the Brazilian Electricity Regulatory Agency (ANEEL) foresee the construction and maintenance of almost 710 kilometers of transmission lines and substations and investments of R$3.51 billion.
This is because the transmission segment is considered the safest in the electric sector, which is fully regulated, and the winner gets a 30-year contract. Companies such as Isa Cteep, Energisa, Sterlite, Engie, and CPFL have announced their participation.
The infrastructure will serve the states of Espírito Santo, Maranhão, Minas Gerais, Pará, Rio de Janeiro, Rio Grande do Sul, Rondônia, Santa Catarina, and São Paulo. In total, 5,800 jobs are expected to be created during the construction period, which ranges from 42 to 60 months.
For Nivalde de Castro, a professor at the Federal University of Rio de Janeiro (UFRJ) and coordinator of the Electricity Sector Study Group (Gesel), all the lots are expected to be sold in the bidding with discounts typical of the power transmission segment.
“It is the best-structured segment and with a very large future demand. It is an organized sector and ANEEL acts correctly in differentiating the lots. So, we won’t have lots without bids, and we will have a discount. Besides, the winning companies will have a stable and predictable remuneration,” he said.
“The works that will be tendered have the objective of bringing more security and reliability to the ONS,” said Mayra Guimarães, head of renewable energy and regulation at Thymos. She expects that this bid will follow the same trend as the last transmission auctions, that is, high competitiveness for all the lots, which could be sold with average discounts of 40% to 50%. “In addition, we expect robust and financially well-structured companies to participate,” she added.
The overall value of the reference Annual Allowed Revenue (known as maximum RAP) to be paid to the business is R$604 million. The winner will be the one that presents the lowest RAP in the Brazilian currency per year.
Lots 3 and 5 are the ones that draw the most attention for the strength of the investments: almost R$2.3 billion. The largest of them is Lot 3, with 351 kilometers, which cuts through Maranhão and Pará. Lots 5 and 6, on the other hand, have singularities because they are aimed at the restoration and maintenance of existing undertakings to extend their useful life.
What may cause tension is the risk of litigation in Lot 6. The partner of the energy and natural resources department of law firm Demarest Advogados, Rosi Costa Barros, recalled that ANEEL removed the substation of Isa Cteep from the contract and believes that it may be auctioned.
“In ANEEL’s understanding, the asset is expected to be part of the auction to take place this Friday and be excluded from Isa Cteep’s concession. The company has questioned the inclusion of the asset in Lot 6. Therefore, the maintenance of this asset in the Auction 02/2022 may be questioned in court,” said Mr. Barros.
Brazil has 175,000 kilometers of transmission lines, according to data from national grid operator ONS. Despite that, the segment still suffers from bottlenecks to transport the production of wind and solar energy, especially in the Northeast.
The director-general of ONS, Luiz Carlos Ciocchi, said that the auction was designed based on planning studies by the Empresa de Pesquisa Energética (EPE) and on analyses carried out by ONS considering the operating conditions foreseen for the Interconnected System.
“Most of the projects listed for this auction aim to expand the transmission capacity to cope with the load growth and reduce some of the existing restrictions. They are works that aim to solve localized problems and allow the consumer to be served safely … Item 6 stands out because it deals with the bidding for the concession of facilities that integrate the international interconnection between Brazil and Argentina, including a commitment to the necessary revitalization,” said Mr. Ciocchi.
*By Robson Rodrigues — São Paulo
Source: Valor International