Wind Developers Seen Bidding to Build Brazil Transmission Lines

(Bloomberg) — Companies that develop power plants in
Brazil may be planning to bid for work building the transmission
lines to link them to the grid, a business that’s been dominated
by state-owned utilities.

CPFL Energia SA is authorized to participate in a
government auction today. Other developers may follow suit,
according to Brazil’s trade group for wind-power companies.

Developers may be expanding into transmission projects
because the state-owned companies are pulling back, said Elbia
Silva Gannoum, president of Brazil’s wind-power association
known as Abeeolica. Centrais Eletricas Brasileiras SA, one of
the country’s most important transmission companies, won’t bid
in today’s event.

“State-owned companies that are usually present in the
transmission-line tenders don’t have resources to invest,”
Gannoum said in a phone interview. The companies that build
generating sites “are already considering investing in
transmission-line auctions.”

Eletricas Brasileiras, known as Eletrobras, said it won’t
bid in the auction because of cash-flow problems, the local
newspaper Valor Economico reported yesterday.

There are 12 wind farms in Brazil, with 333 megawatts of
total capacity, that are complete but not delivering power to
the grid because they lack transmission lines, according to
Abeeolica.

Losing Revenue

Companies would prefer to build the connections themselves
than lose money from projects that aren’t selling power, said
Thais Prandini, director at the energy consulting Thymos
Energia, said in a telephone interview.

“If generators start operating in the transmission line
sector, it’s only because they don’t want to lose revenue,” he
said in an interview.

Transmission lines aren’t CPFL’s core business. The Sao
Paulo-based company participates in auctions for such
connections when it expects the projects to generate a return,
said a press official who asked not be identified because of
company policies.

Companies are expected to bid for four packages of
transmission projects in today’s auction. CPFL has authorization
to bid for a group known as Slot I, with two lines.

Slot A, the largest group, is key for Brazil’s wind
industry. It includes more than 900 kilometers (560 miles) of
lines in the northeastern state of Bahia. There are 48 wind
farms still under construction in the region that are depending
on those connections, according to Abeeolica.

“The main lines to be auctioned tomorrow are strategic for
the wind market,” said Gannoum.

To contact the reporter on this story:
Vanessa Dezem in Sao Paulo at
vdezem@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Will Wade, Steven Frank

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