Brazil extends Jirau hydropower concession through August 2047

By Brazil Stock Guide – Brazil’s electricity regulator extended the concession for the Jirau hydropower plant by 615 days, moving the expiration date from December 2045 to August 2047 after reviewing the project’s regulated-market energy allocation.

The National Electric Energy Agency, known as Aneel, approved the request from Energia Sustentável do Brasil SA, the privately held company that operates the facility. The operator argued that the original calculation failed to include portions of the plant’s assured energy used to cover electricity losses and reduce exposure to hydrological risk.

Aneel concluded that the difference should be compensated through an extension of the existing concession. The decision changes the expiration date of the current authorization rather than granting a new operating contract.

The adjustment is provided for under Brazil’s Federal Law 10,848 of 2004, which governs electricity commercialization. The legislation allows energy volumes supplied to the regulated market above the allocation initially estimated by the state-run Energy Research Office, or EPE, to be converted into additional concession time.

The extension must be equivalent to the period required to fully compensate the operator for the excess allocation. In Jirau’s case, the regulator determined that the appropriate adjustment was 615 days.

One of Brazil’s largest power plants

Energia Sustentável do Brasil secured the right to develop and operate Jirau after winning Aneel’s 005/2008 auction.

The plant has 3,300 megawatts of installed capacity and is part of the Madeira River hydropower complex, a major source of electricity for Brazil’s national interconnected grid.

Jirau is located about 120 kilometers, or 75 miles, from Porto Velho, the capital of Rondônia state. The project uses the Madeira River, one of the Amazon River’s largest tributaries, to generate electricity.

The revised concession period will allow Energia Sustentável do Brasil to operate the facility through August 2047. The company does not have a publicly traded stock ticker.