The Brazilian government approved the construction of 53 new solar and wind farms that will add 1.5 gigawatts to its power generation capacity as part of a bid to diversify energy sources and increase the system's reliability.
Brazil granted contracts for companies to deliver 548.2 megawatts from wind farms and 929.3 megawatt from solar installations with initial deliveries scheduled for November 2018. The government estimates those projects will cost companies some 6.8 billion reais ($1.77 billion).
Brazil is struggling to overcome its worst energy crisis in 14 years after back-to-back seasons of below-average rains depleted reservoirs of hydropower plants, which account for more than 60 percent of electricity generation.
The government is holding regular auctions to award contracts for companies to produce electricity from several sources.
In Friday's auction, companies including Portugal's EDP Renovaveis, France's Voltalia and U.S. SunEdison signed contracts to sell energy for 20 years.
Agreed prices for wind generation ranged between 178 reais and 212 reais per megawatt, depending on the locations.
Solar generation was priced between 290 reais to 302 reais. Values will be adjusted according to annual inflation rates during contract period.
Wind power experienced a quick development in Brazil in the past few years and solar power now is expanding rapidly, helped by the auctions.
This was the third round to grant contracts to solar generation since October 2014. With them, Brazil has gone from basically zero solar generation to close to 3 gigawatts.
