Brazil will add 1627 MW of new thermal capacity following its latest auction of power contracts.
Thermoelectric developers won 82 per cent of contracts sold at an end-April auction in the country, which remains in the grip of a drought that has affected the ability of its hydropower plants to produce energy.
The winning bidders included projects using natural gas and biomass as fuel and included Genpower, a Rio de Janeiro based developer planning construction of a 1500 MW gas-fired plant in Sergipe state.
Around 356 MW of hydropower capacity was also awarded in the auction, while another auction for wind energy awarded 90 MW of capacity, far below the 500 MW expected by analysis firm Bloomberg New Energy Finance.
Brazil is keen to increase both thermal and non-hydro renewable energy capacity to help counter the high level of hydropower capacity in its system. The government wants to add 7500 MW of thermal capacity to the grid by 2023.
According to ratings agency Fitch, reservoir levels in Brazil's southeastern/midwest subsystem rose to 33 per cent of total capacity in April thanks to normal rainfall levels in March. In December 2014 they had been at 19 per cent of capacity.