The Brazilian experience with auctions for wind power: An assessment of project delays and potential mitigation measures

Abstract

Renewable energy auctions are gaining popularity worldwide. However, practical experiences remain ambiguous. This holds especially true for on-time implementation rates. In Brazil, only 17% of the awarded capacity in the first ten auction rounds reached commercial operation within the set out deadline. In this article, we investigate the causes for these delays and discuss potential mitigation measures, based on expert interviews and extensive data analysis. The most severe delays were caused by expansion to the transmission grid. Delays in the supply of wind turbines also led to significant project setbacks. Other factors could be considered of minor relevance, but have led in individual cases to significant delays. These include factors related to project financing, project or environmental licenses, logistics, land-use conflicts and poor project management. Brazil effectively reduced delays caused by transmission grid expansion through amendments to the auction design. Our analysis also shows that options to further mitigate delays through an advanced auction design are limited, as they lead to conflicts with other energy policy objectives, e.g. local production of wind turbines, or because the delays are caused by factors beyond the control of the project developers.