Hiring thermal plants could double the cost paid by consumers

A contracting thermal plants in Reserve Energy mode can double the cost of EER (Reserve Energy Charge) charged to consumers in 2031 to R$46/MWh compared to the value predicted for this year, if the PLD (Difference Settlement Price) remains at the regulatory floor of R$69,04 both this year and in 2031.

This is the main result of TR Soluções analysis on the impact on the hiring PCS thermal plants (Simplified Competitive Program) and the 8 GW of natural gas thermal plants whose contracting in this modality was determined in the Eletrobras privatization law.

“It is important to note that the study only considered fixed revenue from contracts. If plants are called upon to dispatch beyond their inflexibility, there will be extraordinary costs for consumers”, explains the director of Regulation at TR Soluções, Helder Sousa, remembering that the rules require that, in the case of 8 GW, for example, the plants must operate with an inflexibility of 70%.

Reserve energy is a long-term contracting modality, usually from 15 to 30 years, with the aim of increasing energy security. supply in the SIN (National Interconnected System). The EER is intended to cover the costs arising from contracting this energy, which are shared among all end users of electricity in the SIN.

Since 2008, eleven reserve energy auctions have been held. The last event took place in December 2016, but was cancelled. In 2023, the fixed revenue contracted until the 10th Reserve Energy Auction is R$9,9 billion. The following graph shows the expected evolution of this fixed revenue until 2031.

The PCS was carried out in October 2021 and resulted in the contracting of 778,2 MWm from a total of 17 generation projects, with 22,4 MWm of the quantity product, at the average price (updated for January 2023) of R$371,17, 755,80 /MWh; and the remainder, 1.729,76 MWm, from the availability product, at an average price of R$ 44 /MWh. The total contracted supply period was 1 months, starting on May 2022, 31 and ending on December 2025, XNUMX.

If all the plants that won the PCS had come into operation according to the result of the competition, this contracting of reserve energy under the procedure would represent a fixed revenue of R$12,7 billion in 2023.

But, considering that part of these contracts is under discussion in ANEEL (National Electric Energy Agency) and the TCU (Federal Court of Auditors), the study took into account only the fixed revenue from current contracts, of around R$2,7 billion this year.

As for the thermal plants involved in the privatization of Eletrobrás, as they are plants with a high inflexibility factor (70%), TR Soluções considered in the study that they will all be contracted through LRCE (Capacity Reserve Auction in the Form of Energy), as This was the case with the 2022 auction, when 700 MWm were contracted. Another 6.000 MW, or 4.200 MWm, should still be offered in the coming years due to inflexibility.

Considering all these contracts, the fixed revenue from Reserve Energy must evolve as indicated in the following table.

As all Reserve Energy is settled in the short-term market (MCP), the difference between the total fixed revenue required to activate each plant and the revenue resulting from the settlement of energy generated to the PLD is what actually becomes the charge.

For simulation purposes, the TR considered three hypotheses for the PLD value: R$ 15,05/MWh (value for the minimum PLD defended in legal action), R$ 69,04 (current minimum PLD) and R$ 200,00, XNUMX/MWh, whose tariff impacts are indicated in the following table.

In tariff terms, in a scenario in which the PLD is at R$69,04/MWh, in 2031 the EER would be around R$46/MWh nominal, which would represent a 6% share in the average application tariff for consumers Brazilian residential projects projected for that year. In the R$15/MWh price scenario, the value would be R$52,94, and R$200,00, R$29,17/MWh.