Conversion Bill No. 10/2025, derived from Provisional Measure 1.304/2025, received a positive evaluation among respondents. Canal Solar, although its content did not fully please all stakeholders in the electricity sector.
The proposal brings together a broad set of measures: review of subsidies, creation of new charges, opening of the free market, contracting of hydroelectric and thermoelectric plants, new rules for self-production, and reimbursement to generators for curtailmentIncentives for energy storage, expansion of the functions of CCEE (Chamber of Electric Energy Commercialization), and definition of conditions for access to and commercialization of natural gas from the Union, among other points.
According to lawyer Urias Martiniano G. Neto, a specialist in electricity sector regulation, the final text of the Provisional Measure did not please everyone, but it represents concrete progress. “There will always be discomfort among certain groups of stakeholders. A reform will never fully please everyone. There are points that could have been better debated and discussed, but we have reached a critical point in the sector model and the legal structure. We need to review them and properly reallocate costs because, at the end of the day, it is the consumer who pays,” Neto assessed.
The expert highlighted the definition of the discount on the grid as a positive point. “Sometimes we get stuck on what didn't go as expected, but this point was very well defined. The wording respects the discount for generators, both in generation and consumption, guaranteeing legal security for electricity purchase and sale operations. Another gain was the opening of the market. There are points of attention regarding the reference price, but overall, it is an important step forward. The sector needed reform. Perhaps we haven't advanced in everything that was desired, but we have progressed on several fronts,” he said.
The bill stipulates that new consumers migrating to the free market will not be entitled to discounts on transmission and distribution tariffs. However, current free market consumers may continue to negotiate incentivized energy. The text also establishes that all consumers connected to low voltage may migrate to the free market by 2028.
For Silla Motta, CEO of the consulting firm Dona Lamparina and a professional with over 27 years of experience in the sector, the moment is delicate: "In my opinion, we are on the verge of collapse, something that has been announced by the National System Operator itself," she warned.
Still, she sees positive aspects in the text. "Generally speaking, MP 1.304 "It has brought progress, mainly in opening up the free market and preserving the rights of distributed generation. Distributed generation is often treated as the villain of the sector, and I totally disagree with that. It contributes to relieving the system and reducing investments in transmission and distribution networks – as long as the consumer receives a correct price signal," he pointed out.
The bill originally stipulated a charge of R$ 20,00 for every 100 kW offset in micro and mini-generation systems, but this point was removed before the vote in the Chamber of Deputies.
"Distributed generation is unfairly seen as a problem. In the UK, for example, companies like Octopus integrate photovoltaic generation, heat pumps, electric vehicles, and air conditioning systems, managing it all intelligently. The result is flexibility and efficiency, with an appropriate price signal. That's what we should be aiming for: less intervention, less excessive regulation, and more market freedom. The consumer with..." GD "It should be able to sell its surplus, whether to distributors, traders or other consumers, as already happens in countries that adopt the peer-to-peer model. Distributed generation is not the problem; it is part of the solution. What is lacking is a structural regulation that guarantees cheap energy, fair tariffs and freedom of choice, both for those who generate and for those who consume," Motta added.
According to Pedro Henrique Dante, partner at Lefosse Advogados, the highlight of the reform lies in the provisions aimed at energy storage. The PLV (Bill of Law) creates a subcategory within REIDI (Special Incentive Regime for Infrastructure Development) to include batteries, with benefits limited to R$ 1 billion per year between 2026 and 2030. The regime suspends the collection of PIS and COFINS taxes on the nationalization and importation of equipment.
“It doesn’t yet have the level of detail everyone expected, but the creation of the storage figure, the autonomous agent, provides a great deal of security, especially for foreign investors. It’s certainly the next step, given the growth of renewable energy sources. Storage isn’t meant to be ‘the solution,’ but a safety mechanism for the next phase of the sector,” Dante stated.
One of the most controversial points is the renewal of contracts for coal-fired power plants, a measure seen by many stakeholders as contrary to the objectives of the energy transition.
“Given Brazil’s size and the complexity of our system, we can coexist with all energy sources. When we look at the energy transition, the mandatory contracting of coal really doesn’t seem to make sense. But, considering that the country needs firm energy, power, and gas, I think the government made decisions within this guideline. And, of course, in this lobbying and conflict of interests, some sources end up having more appeal in Congress. Unfortunately, in Brazil, decisions are not always technical – often they are political,” Dante assessed.
Along the same lines, Alexei Vivan, president of ABCE (Brazilian Association of Electric Energy Companies), also considers the measure questionable. "We understand that all mandatory contracting is bad, and all inflexible contracting is also bad, because it removes the operator's ability to dispatch what has the best cost-benefit ratio."
Vivan also highlights the financial impacts of the measures. “The main negative points are precisely these inflexible contracts, especially those for coal, which increase costs. Furthermore, the Provisional Measure excludes several items from the CDE (Energy Development Account) limit that should not be excluded. Another point is the compensation for curtailment in cases of reliability – something that currently only occurs due to external unavailability. This change benefits investors in centralized wind and solar power plants, who have faced losses in the billions, but at the same time, it tends to increase the consumer's bill, who already bears many subsidies,” he assessed.
The PLV creates a ceiling for the Spanish SporthorseThis charge subsidizes public policies in the sector, based on 2025 values – approximately R$ 50 billion. Those exceeding this limit will have to bear a new charge. However, the text excludes several items, such as the Social Tariff and the "Light for All" program, which tends to maintain the growth of the CDE in the coming years.
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