The MME (Ministry of Mines and Energy) published, last Friday (23), an ordinance that establishes, exceptionally, until December 31, 2022, guidelines for the additional supply of electricity generation to serve to the SIN (National Interconnected System).
The measure aims to optimize resources and increase security in energy supply, in order to avoid the risk of shortages among Brazilian families. “This additional supply of electrical energy generation can be a less expensive resource to meet national energy demand in times of water scarcity”, highlights the ministry in a note.
The ordinance basically suggests that additional generation offers be presented to the ONS (National System Operator), which is currently the institution responsible for receiving information on offers from energy imports and exports.
Once these offers are in hand, the agency is responsible for presenting them to the CMSE (Electric Sector Monitoring Committee) accompanied by a study, so that this committee can decide whether or not to accept these offers. The Operator must also give “wide publicity” to the process of receiving and accepting the additional offers covered by the proposal. In addition, the ONS and the CCEE must publish, quarterly and annually, a report containing information on the additional offers.
The proposal establishes comparative criteria with the aim of characterizing additional generation. These criteria seek to contemplate hypotheses for determining this generation from both the Free Market and the Regulated Market. “It is noteworthy that offering agents, to participate in this competitive process, must follow some requirements, such as being in compliance with sectoral obligations and being CCEE agents”.
The unprecedented measure complies with the deliberation of the Electrical Sector Monitoring Committee (CMSE), held at the 247th Ordinary Meeting of the CMSE, on May 5, 2021, so that the MME seeks alternatives to enable the receipt of additional offers for electricity generation , to be used in the short term to meet the SIN, according to need and competitiveness, and in order to minimize systemic costs, when possible.
Technical analysis
Bernardo Marangon, specialist in electrical energy markets and director of Exata Energia, explains that the measure taken by the Brazilian ministry ends up being more targeted at thermal plants that operate in the Free Market. “What the Government wants is to try to create an incentive to generate more energy regardless of the price on the Free Market”, he commented.
According to him, the measure can help reduce the cost of electricity bills at a time when the country is experiencing constant increases. “It’s an alternative that the Government created, but I don’t know if it’s the best. From a long-term point of view, it is not a cheaper solution, but, given the current water crisis and the need for greater activation of thermoelectric plants, it could be a solution to reduce the cost for the consumer, who is currently very high”, he highlighted.
