Pampa Sul power station

From Global Energy Monitor

[português]

Pampa Sul power station, also known as Miroel Wolowski power station (UTE Pampa Sul or UTE Miroel Wolowski in Portuguese) is a 345-megawatt (MW) coal-fired power plant in Candiota, Rio Grande do Sul, Brazil.

Location

The map below shows the plant under construction in Candiota, RS, Brazil.

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Background

Originally a project of Tractebel Energia SA - renamed Engie Brasil Energia in 2016 - the Pampa plant languished for many years in the shadow of Tractebel's larger Seival power plant.[1] However, with the sale of Seival to MPX Energia in November 2010[2] and President Dilma Roussef's March 2013 decision to re-open Brazil's energy auctions to coal plants[3], Pampa got a new lease on life. As of August 2013 companies from China, Spain and Korea had expressed interest in placing construction bids.[4]

While the project met all the licensing requirements for inclusion in Brazil's August and December 2013 energy auctions, management ultimately declined to participate, citing both auctions' unviably low ceiling prices per KWh.[5][6] However, higher prices in the November 2014 auction encouraged Tractebel to participate, and the Pampa power station emerged as the lone successful bidder for a coal-fired project. Plans called for construction of the plant to begin in the first half of 2015, with a completion date no later than December 2018. Starting in 2019, the R$1.8 billion project was expected to generate 340 MW annually over a 25 year period.[7]

In June 2015, Tractebel announced that Brazil's national environment agency IBAMA had issued a permit allowing construction of Unit 1 to begin at the Pampa plant site. The plant was reported as 340 MW. Initial work was expected to begin during the first two weeks of July, with completion of the plant now projected for January 2019.[8][9]

In July 2016 plant owner Tractebel changed its name to Engie Brasil Energia.[10]

In August 2017, two years after construction began, Engie Brasil Energia representative Hugo Roger Stamm announced that 50% of Unit I’s structures were complete, including the transmission line and most of the conveyor belt system, and that the plant was on track to begin operational testing in the second half of 2018, with commercial electricity production to begin in January 2019.[11] In January 2018, Engie Brasil Energia announced that construction was 75% complete and that the total cost of the project was now R $2.5 billion.[12]

Unit 1 was commissioned in May 2019[13] and received authorization from ANEEL to begin commercial operations in June 2019.[14] The plant is fueled with coal from the nearby Seival mine.[15]

Proposed Unit 2

In April 2015, the Brazilian news site Valor Econômico cited statements from Tractebel's CFO Eduardo Sattamini indicating that Tractebel has plans for a second unit that would raise the Pampa plant's capacity to 640 MW. The report speculated that Tractebel might bid for increased capacity at Brazil's April 30 national energy auction[16], but Tractebel did not appear on the official list of bidders published by ANEEL (Brazil's energy regulation authority) and no new coal projects were approved in the April 30 auction.[17]

In August 2017, press reports cited the 300MW Pampa Sul II project as one of four possible coal-fired contenders in Brazil’s upcoming A-6 energy auction.[18] However, there were ultimately no successful bids from coal projects in the December 2017 auction, with the Brazilian government granting virtually all new energy contracts to wind and natural gas-fueled projects instead.[19]

Unit 2 was again listed as a participant in Brazil's October 2019 A-6 energy auction but did not enter into any purchasing agreements.[20]

In February 2020, Brazil's national environment agency IBAMA issued a preliminary environmental permit for Unit 2, valid for 5 years. Engie's stated goal for obtaining the permit was to allow the project to participate in future energy auctions, thus making it more attractive to a potential buyer; Engie itself has pledged to build no new coal plants in Brazil.[21]

Possible Sale

In April 2018, as part of its plan to decarbonise its portfolio, Engie attempted to sell the Pampa Sul project and its Jorge Lacerda power station to Contour Global but the sale fell through over a disagreement on the projects' valuation.[22] In September 2018 it was reported that China’s State Power Investment Corp (SPIC) was in talks with Engie SA to purchase Pampa Sul.[23] In January 2019 Engie gave a planned commissioning date of May 2019 or June 2019 for Unit 1, and announced that it would not try to sell the plant until it was commissioned.[24]

Engie announced in a July 2019 press release that the company had revived its efforts to sell the Pampa Sul power station,[25] and the following month an Engie executive confirmed to Reuters that Pampa Sul was up for sale.[26] By year's end, however, efforts to sell the plant had been put on hold due to problems with lower-than-expected operational capacity in the plant's first months of operation. In a February 2020 teleconference with investors, Engie executive Rafael Bósio reported that the plant would be put up for sale again later in 2020 once operational capacity targets had been achieved.[27]

In March 2021, Engie resumed efforts to sell the plant in accordance with its announced transition towards carbon neutrality.[28][29]

Financing

In August 2020, Engie announced that it was "preparing to issue up to $142 million in debentures to finance its Pampa Sul coal-fired power plant."[30] In the same month, it was announced that BTG Pactual would be the bond arranger for that debt.[31] In September 2020, Engie announced that it had completed settlement of the initial debenture offering, raising a total of R$ 340 million (roughly US$ 61 million at prevailing exchange rates[32]) to offset expenses at the Pampa Sul plant over the next 24 months.[33]

In October 2020, Engie finalized the issuance of an additional R$ 582 million in debentures to finance the Pampa Sul plant[34][35], an offering that was originally announced in late September.[36][37]

Project Details

  • Sponsor: Engie Brasil Energia (formerly Tractebel Energia SA)[10]
  • Parent company: Engie[25]
  • Location: Candiota, Rio Grande do Sul, Brazil
  • Coordinates: -31.549407, -53.682978 (exact)
  • Status:
    • Unit 1: Operating (2019)[25]
    • Unit 2: Permitted[21]
  • Gross Capacity:
  • Type:
  • Coal Type:
  • Coal Source: Seival mine, Candiota[15]
  • Source of financing: R$922 million (US$163 million)[32][33][34] in debt from BTG Pactual[31]

Articles and resources

References

  1. "Tractebel exporta energia ao Uruguai". Ambiente Já!. March 4, 2008.
  2. "MPX Energia adquire projeto em Candiota por R$ 37 milhões". GZH. November 23, 2010.
  3. "Dilma agora quer o carvão,", Jornal do Povo, March 2013.
  4. "Novos investidores chineses visitam Mina de Candiota". Farrapo/CRM (Companhia Riograndense de Mineração). August 22, 2013.
  5. "Consórcios e empresas rearticulam projetos de térmicas a carvão no Rio Grande do Sul,", Zero Hora, September 2013.
  6. "Preço no leilão marcado para dezembro joga água fria na exploração do pré-sal gaúcho,", Zero Hora, November 2013.
  7. "Confirmada nova usina em Candiota". Jornal Minuano. November 29, 2014.
  8. "Licença de instalação da Tractebel é assinada". Jornal Minuano. June 20, 2015.
  9. "IBAMA emite Licença de Instalação da UTE Pampa Sul em Candiota". Reporter Brasilia. June 29, 2015.
  10. 10.0 10.1 "IN BRIEF: Tractebel changes name to Engie Br..." BNamericas. July 14, 2016.
  11. "Obra da UTE Pampa Sul completa dois anos com mais de 50% das estruturas concluídas,", Jornal Minuano, August 29, 2017.
  12. Usina Pampa Sul está com 75% das obras concluídas - Jornal do Comércio, Jornal do Comercio, Jan. 25, 2018
  13. "Bancada do carvão renasce no Congresso com apoio do governo Bolsonaro", Gazeta De Povo, Jun. 27, 2019
  14. "Engie: Aneel autoriza início de operação de termelétrica a carvão no RS". Isto é Dinheiro. June 28, 2019.
  15. 15.0 15.1 "Seival Sul Mineradora começa operação em Candiota". Jornal Minuano. March 21, 2019.
  16. "Tractebel considers selling extension of Pampa Sul Coal Plant,", Valor International, April 28, 2015.
  17. "Leilão A-5 contrata 14 usinas e garante investimentos de R$ 6 bi no país". GNPW Group. May 1, 2015.
  18. "Projetos a carvão são confirmados em leilão,", Jornal do Comércio, August 8, 2017.
  19. "Leilão A-6 viabiliza 3,8 GW e R$ 13,9 bilhões em novos investimentos," CanalEnergia, December 20, 2017
  20. Minas e Energia quer viabilizar financiamento do BNDES para usinas a carvão, epbr, Oct. 18, 2019
  21. 21.0 21.1 21.2 "Segunda fase da UTE Pampa Sul recebe LP válida por cinco anos". Jornal Tribuna do Pampa. February 26, 2020.
  22. Negociação para venda da usina Pampa Sul nao avança, Jornal Minuano, Apr. 13, 2018
  23. Deals of the day-mergers and acquisitions, Reuters, Sep. 5, 2018
  24. Engie will only sell Pampa South upon completion, Jornal do Comércio, Jan. 15, 2019
  25. 25.0 25.1 25.2 25.3 "Pampa Sul Thermoelectric Power Plant begins commercial operations". ENGIE Brasil press release. July 9, 2019.
  26. "Engie Brasil will restart sale process for Pampa Sul power plant - executive". Reuters. August 7, 2019.
  27. "Engie aponta contratempos em processo para vender termelétricas a carvão no Brasil". Negócios/Reuters. February 19, 2020.
  28. "ENGIE retoma processo de venda de Pampa Sul". ENGIE Brasil. Retrieved 2021-07-02.
  29. "Engie resumes sale of 345-MW coal-fired plant in Brazil". Renewablesnow.com. Retrieved 2021-06-14.
  30. "Engie to issue debentures for Brazil coal-fired plant | Power Finance & Risk". www.powerfinancerisk.com. Retrieved 2020-10-05.
  31. 31.0 31.1 "Preview of Pampa Sul Thermal Power Plant (340MW) Additional Facility | Transaction | IJGlobal". ijglobal.com. Retrieved 2020-10-05.
  32. 32.0 32.1 "Brazilian Real to US Dollar Exchange Rate History For 23 September 2020 (23/09/20)". www.exchangerates.org.uk. Retrieved 2020-12-30.
  33. 33.0 33.1 "UTE Pampa Sul conclui captação de R$ 340 milhões". Canal Energia. September 23, 2020.
  34. 34.0 34.1 "Engie (EGIE3): Pampa Sul faz emissão de R$ 582 mi em debêntures". Eu Quero Investir. 2020-10-28.
  35. "'Debênture-carvão' da Engie sai com demanda de quatro vezes e redução de taxa". Capital Reset. October 27, 2020.
  36. "Engie Brasil Energia S A : Announcement to the Market - Debentures 400 Pampa Sul | MarketScreener". MarketScreener. September 27, 2020.
  37. "AVISO AO MERCADO: OFERTA PÚBLICA DE DISTRIBUIÇÃO DE DEBÊNTURES SIMPLES" (PDF). Engie. September 28, 2020.

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