Plants that met the deadline will have contracts terminated without penalties; cost would be up to 4.5% in tariffs over the next 3 years
The Ministry of Mines and Energy intends to terminate the Emergency Auction contracts, held in October 2021 to contract reserve energy. The proposal was submitted, this Thursday (27.Oct.2022), for public consultation. Here’s the intact (88 KB).
According to the ordinance under consultation, the ring (National Electric Energy Agency) is authorized to terminate the contracts without applying penalties to the plants that came into operation within the auction term. The ventures had until May 1 to start operating. If they were unable to do so, they could operate until August 1, under penalty of a fine.
The plants that fail to comply with the deadlines will have their contracts terminated due to default, with the collection of penalties, such as fines and execution of guarantees of faithful compliance – insurance contracted by the plant to guarantee the fulfillment of the contract.
as showed the Power 360, only one plant met the May 1 deadline: the Fênix biomass thermoelectric plant in Mato Grosso. Recently, this same thermal requested amicable termination from the ministry.
Another 8 managed to start operations within the deadline of August 1st, being subject to fines to be executed by the CCEE (Electric Energy Commercialization Chamber). According to the Chamber, the penalties reached R$ 1.7 billion, from May to August – R$ 1.3 billion has not yet been paid.
According to data from Aneel, 8 plants have not yet come into operation.
Named PCS (Simplified Competitive Procedure), the auction aimed at contracting energy to supply an eventual lack of system capacity. It was approved in September 2021, at the height of the water crisis. At that time, the government was concerned about the possibility of energy rationing in an election year.
The deadline for entry into operation was short. The contracts were signed in November 2021 and the plants were supposed to be available for the ONS (National Electric System Operator) on May 1, 2022.
O Power 360 found that the projects already had a delay in starting operations and considered the cost of penalties in the energy sale price, which was high: R$ 1,563.61 per megawatt-hour, on average.
Still, not all ventures were able to operate. With the improvement of the reservoirs, market agents started to defend the termination to avoid the cost of up to R$ 39 billion in the electricity bill, which would increase the electricity tariff by 4.5% over the next 3 years, according to information from the ministry itself. .
The plants would be paid by the Reserve Energy Charge, a fee that makes up the electricity bill. As published the Power 360in 2022 alone, the event would cost R$ 1.66 billion.
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