Brazil’s Ministry of Energy and Mines has cancelled the wind and solar auction scheduled for Dec 19 due to oversupply, says a spokesman from MEM.
In a previous solar and wind auction in July, the MEM postponed the solar auction to December, but solar and wind have both been effectively removed, making this the first year since 2008 that Brazil will not grant new licenses for wind farms.
The decision will impact renewable energy equipment makers such as Brazil’s WEG SA and Norway’s Vestas Wind Systems A/S, which are already scaling back the use of their installed capacity in the country.
The decision to cancel the auction resulted from power oversupply in Brazil, where the worst economic downturn in eight decades has cut electricity demand for two straight years.
Power distribution companies, bound by long-term supply contracts, are having problems paying generators for electricity that they cannot sell.