100 Megawatts - Solar Project in Brazil (Stephan Nielsen)

Brazil, which has only one utility- scale solar project, may auction off next year contracts to sell at least 100 megawatts of electricity produced from sunlight.

The auction, which has not been formally announced, may be the first of many, Leonidas Andrade, director of photovoltaics at the trade group Associacao Brasileira da Industria Eletrica e Eletronica, said today in a telephone interview.

Brazil has organized similar auctions for wind power that attracted developers and equipment producers to the country and drove down prices. A solar auction would have a similar effect, Andrade said.

“Auctions are fundamental for solar development,” Andrade said. “Wind energy is now very competitive. Solar could follow the same path.”

Auctions for solar capacity “shouldn’t be for anything less than 100 megawatts,” he said.

An auction for wind energy in 2009 prompted turbine makers including General Electric Co. and Gamesa Corp. Tecnologica SA to establish factories in Brazil and made equipment less expensive in the region.

Developers offered to buy electricity for an average of 102.18 reais ($59) a megawatt-hour in the last auction on Dec. 20, according to data from the national energy agency Empresa de Pesquisa Energetica. That’s 31 percent lower than the 148.39- real average in the 2009 auction.

The Ministry of Mines and Energy, which has organized renewable energy auctions for wind power, didn’t reply to inquiries today.

Brazil’s only utility-scale photovoltaic project, in Taua, has 1 megawatt of capacity and is owned by Rio de Janeiro-based MPX Energia SA, according to power regulator Agencia Nacional de Energia Eletrica.