Adecoagro, an international company with a strong presence in Brazil, announced last week that it could become the first company in the country's sugar-energy segment to sell cogeneration energy for sugarcane bagasse to other countries.

The company obtained authorization from the Ministry of Mines and Energy (MME) to sell energy produced at its plant in Angélica, located in MS, to Argentina and Uruguay. In addition to Brazil, Adecoagro maintains agricultural operations also in these two countries.

To achieve the sale of bioenergy to neighboring countries, the company still relies on authorizations from the authorities of these countries. More bureaucratic procedures will also be needed in Brazil, such as the opening of an application for adtome in the Electric Energy Trading Chamber (CCEE).

The possibility of selling energy out of Brazil may be an opportunity to expand the gains with cogeneration at times when the national market is not favorable. The company told Valor Econômico newspaper that energy prices "will be evaluated and set in due course."

In a statement, Adecoagro said this is another business opportunity that can be attractive depending on when each country is. "Our focus is to meet demand in our country as a priority and, if there is opportunity and interest from both Uruguay and Argentina, the company will be ready to meet," Adecoagro said.

The company is selling energy this year at an average price of $42 a megawatt-hour (MWh) – the figure, calculated in the first half, is 11% higher than that recorded a year earlier. The spot market, however, is weak, as the level of reservoirs has been recovering this year. In the second quarter of the year, the Difference Settlement Price (PLD) was 76% below the levels of the same period of 2021.

Although sugarcane has been processing sugarcane for much of the year, Adecoagro has been reserving part of the bagasse and straw to cogenerate energy when spot market prices were higher. In the last week of September, the average value of pld in the submarket of the Midwest and Southeast was R$ 55.70.

The company now has a conversion capacity of 1 ton of sugarcane at 70 kilowatt-hours (KWh) sold to the national system. Its power delivery this year is lower than in 2021 because of the drop in sugarcane volume – from the beginning of 2022 to June, Adecoagro delivered 205,700 megawatt-hours (MWh) to the system, or 33% less than a year earlier.

The commercialization of energy to Argentina will take place through converter stations located in Garruchos, RS, with up to 2,200 MW of power. With Uruguay, the converter stations of Rivera, in Uruguayan territory, with up to 70 MW of power, and the municipality of Melo, also in Uruguayan soil, with up to 500 MW of power, will be used.

Source: RPA news