Iberdrola has been awarded a contract by the Agência Nacional de Energia Elétrica (ANEEL) for the construction and commissioning of the 500kV Estreito substation in Brazil.
The Spanish developer obtained the agreement through its subsidiary Neoenergia in a competitive transmission auction held at São Paulo stock exchange and includes an investment of approximately €103m.
The Estreito project comprises a 500kV substation with three -300/+300 Mvar synchronous compensators located in Ibiraci, in the state of Minas Gerais.
The facility is set to provide greater reliability and operational flexibility in critical scenarios of high energy imports by the Southeast region, in addition to guaranteeing stability in São Paulo’s high and medium voltage system.
The maximum deadline for the entry into commercial operation established by ANEEL, Brazil’s electricity system regulator, is 48 months, to be met in March 2026, although this deadline is expected to be brought forward, Iberdrola said.
ANEEL presented the contract in an international tender with the aim of attracting investment to upgrade and expand the country’s transmission networks with award prices being, on average, 66% lower than those expected by the market.
Iberdrola said that the awarded investment represents a significant increase in revenue generation and decisively expands the company’s area of operation in the Southeast region.
The developer added that the asset presents synergies during the construction period of other Iberdrola projects, which were fed into the detailed study prepared by the company for the bid.
Around 1700 direct jobs and numerous indirect jobs are expected be created during the construction of the substation.
Neoenergia has more than 3.7GW of renewable energy in operation in Brazil and provides electricity services to 15 million customers.
Iberdrola said that with its new investment plan by 2030, the value of the group’s regulated assets will rise to €60bn.
The developer has set itself the 2030 target of bringing electricity to more than 16 million people who currently lack access as part of its Electricity for All programme.