Brazil’s government on Monday cancelled the construction of 25 wind farms and solar parks in the country after companies behind the projects requested to return construction licenses. Following an eight-hour tender, Brazil’s government cancelled PPAs with a capacity of 557.4MW in wind and solar power, equivalent to 13% of the non-performing projects eligible for cancellation, power trading chamber CCEE said in a statement.
Brazil’s power sector has been rattled by a combination of slumping demand, rising construction costs and reduced credit availability as the country has gone through its harshest recession on record.
At the end of the round, companies paid a combined fee of 105.9 million reais ($33.43 million) for the cancellations. Besides the fines, they will be bared for two years from participating in any new round for new projects.
Construction licenses for 16 wind farms and 9 solar parks were scraped.
But new rounds are scheduled for December, the first ones since 2015, as the government sees the beginning of a recovery in power demand.