Wind was cheaper than hydropower and natural gas in a government-organized auction in Brazil last week and is becoming the cheapest source of energy in the country. Wind farm developers agreed to sell power to utilities at an average price of 99.58 reais ($62.91) per megawatt hour, below the overall auction average of 102.07 reais. The costs promised by the wind-farm owners were 24% lower than developers agreed to in a similar auction a year ago. The low cost makes it the most cost-effective new power source in the country and the cheapest wind power anywhere in the world, if the auction winners are able to deliver. Possible causes for the drop in rate include a cut in the price of turbines following the 2008 financial crisis, more efficient wind farms, and a strong real against the U.S. dollar, which together have driven down the cost of producing wind power. Turbines still cost about one-third more in Brazil due to the country's import tax, but the launch of domestic factories set up by Siemens AG, GE, and Vestas may drive down the cost of producing wind power even further. Wind projects won 39% of the total contracted capacity, while natural gas won 38%. The farms may help diversify the country's hydropower dependent system--a needed addition to the portfolio as energy demand may rise as much as 60% from 2010 to 2020. For the full story, see http://af.reuters.com/article/energyOilNews/idAFN1E77G22E20110818?pageNumber=1&virtualBrandChannel=0 and http://www.bloomberg.com/news/2011-08-18/wind-beats-natural-gas-hydro-in-brazil-power-supply-bidding.html.