Subsidies for distributed generation are expected to increase by 5,360% from 2018 to 2023, according to data from the Aneel (National Electric Energy Agency). For next year, the agency estimates that subsidies will reach R$ 5.4 billion.
The amount does not consider the effects of Bill No. 2703 of 2022by Federal Deputy Celso Russomanno (Republicans-SP). The text intends to extend the deadline for new distributed generation projects to enjoy discounts of 50% to 100% in tariffs for the use of the electrical system by another year.
Distributed generation is when consumers generate energy for their own consumption, mainly from solar panels. The projects have access to the distribution network and inject the excess energy generated into the system.
Distributed generation was encouraged in Brazil, with the granting of discounts on tariffs for using the system. This ends up implicitly burdening consumers who continue to buy energy from the distributor.
According to the Distributed Generation Legal Framework, projects filed with Aneel (National Electric Energy Agency) by January 6, 2023 would receive discounts. After that, there would be a transition period, with progressive reduction of subsidies. It is this deadline that Russomanno’s project intends to postpone.
According to the general director of Aneel, Sandoval Feitosa, the project represents a cost of more than BRL 25 billion In the next years.
🇧🇷The postponement of the period established by law would further aggravate this situation, according to studies presented by the technical areas of Aneel, by approximately BRL 25 billion implicit in tariffs over the next few years”, said on Tuesday (Nov.29, 2022). On that date, Aneel launched the tool “submeter” to give more transparency to the subsidies paid by consumers on their electricity bills.
According to Aneel data until November, consumers paid R$ 25.9 billion in subsidies on their electricity bills. The biggest one is the fuel consumption bill (CCC), which subsidizes thermoelectric generation in areas disconnected from the SIN (National Interconnected System). Below are discounts for incentivized energy sources (such as wind and solar) and for low-income people. Implicit subsidies for distributed generation are the 4th of ranking🇧🇷
Russomanno’s project is on an urgent basis. He was on the agenda of the plenary of the Chamber of Deputies 4 times, without being appreciated.
Last Wednesday (30.Nov), deputy Beto Pereira (PSDB-MS) presented a substitute for the project that could cost BRL 79 billion by 2045, according to the projection of Abradee (Brazilian Association of Electric Energy Distributors).
The rapporteur included in the text the classification of PCHs (Small Hydroelectric Power Plants) of up to 30 MW (megawatts) of power as distributed mini-generation. Pereira also grants discounts on tariffs for the use of the electrical system to these undertakings – extended to 2 years and 6 months from the publication of the Legal Framework, on January 6, 2022.
Pereira also determined the obligatory contracting of up to 50 MW of small hydroelectric plants in the Midwest to replace the gas-powered thermal plants in the Eletrobras Law.
When it approved the privatization of the state-owned company, Congress imposed the mandatory contracting of natural gas thermoelectric plants in the North, Northeast, Midwest and Southeast regions. In the Midwest, 2,500 MW would be contracted at auctions in 2026, 2027 and 2028.
Abradee’s calculation considers the 3 factors. Abragel (Brazilian Association for Clean Energy Generation), however, contests the price increase claims, comparing the cost of thermoelectric plants in the last Aneel auctions (R$ 444 per MWh) with that of PCHs (R$ 352 per MWh) . Considering average prices, consumers would save R$13 billion, said the association.
According to the president of Abradee, Marcos Madureira, the cost of R$ 79 billion considers hiring PCHs in the Midwest instead of thermal plants that are not being made viable. “In those regions where [as térmicas] were placed are regions where the plants are not becoming viable. Despite being in the law [da Eletrobras]there is a high possibility that they will not occur”he stated.
The project can also create a “secondary market” of access to distributed generation, says Madureira. The substitute permits the sale of access opinions requested by undertakings to connect to the energy distribution network. That is, a company or person can ask for the opinion and sell it without implementing the project.
🇧🇷You will start to have a series of orders, not to make a project, but to be able to sell a project. It makes no sense to have this within the concept of distributed generation, which is a generation carried out for that consumer to generate their own energy”, said Madureira.
GD projects were harmed, says association
The ABGD (Brazilian Association of Distributed Generation) claims that Aneel took time to regulate the Legal Framework and that the distributors are using this to deny requests for access to generation projects.
🇧🇷The fact that Aneel had not issued a statement until then created a regulatory vacuum. Many energy distributors used the artifice of saying ‘look, some points provided for in the law I will not comply with because Aneel did not regulate’”, said the executive president of ABGD, Guilherme Chrispim, in an interview with Power360 on November 7th.
According to Chrispim, the request for an extension of the deadline was made because “we had a period of 1 year for the connections to be made and many were not because Aneel had not positioned itself🇧🇷 This would have caused damage to the projects.
Abradee claims that projects that have requested access within the deadline, even if they still do not have permission from the distributor, are guaranteed by law. 🇧🇷What is filed until the 6th of January [de 2023] will be answered”, said Madureira.
The president of Abradee, who represents the distributors, also claims that the Legal Framework is sufficient to ensure the connection, even though Aneel has not yet published the resolutions.
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