ANEEL seeks solution for accumulation of generation grants

A ANEEL (National Electric Energy Agency) wants to discuss with society a kind of “pardon” for generators that accumulated concessions in the last year with the intention of guaranteeing a subsidy in the tariffs for use of the transmission and distribution systems. Public Consultation No. 15/2023 It opened this Wednesday (10th) and closes on May 22nd.

The end of the “wire” discount for wind, solar, biomass, qualified cogeneration projects or for small hydroelectric plants was established by Provisional Measure No. 998/20, converted into Law No. 14.120, of March 1, 2021.

By law, from March 2, 2022, renewable plants would not have the benefit of a reduction of up to 50% in TUSD and TUST (Tariff for Use of the Distribution and Transmission Service).

This wire discount makes renewable sources more competitive and without it the cost of projects becomes more expensive. In order to guarantee this benefit, project developers launched a “race” for grants, accumulating thousands of projects that will certainly not get off the ground anytime soon.

According to the agency, at the end of March 2023 there were already around 108 GW of installed capacity granted that were not yet in operation.

“It should be noted that, historically, around 8GW of additional installed generation capacity comes into operation annually in Brazil. In other words, only the generators granted to date correspond to around 13,5 years of typical generation expansion in the country”, highlights the technical note that supported the opening of the public consultation.

It is important to remember that the law established that the discount on network use is only applicable to generating plants that come into operation within 48 months after the signing of the grants.

“In other words, for a large part of the potential granted, it would be necessary for them to come into operation within 4 years, which would mean compressing practically 13,5 years of expansion into just 4 years. It is a reality, therefore, that part of this granted generation is speculative in nature and, in fact, will not be implemented”.

Another problem that ANEEL What is being resolved is the judicialization promoted by some agents so that they are exempt from paying the CUST (Transmission System Usage Contracts) while the projects do not start operating.

“There is an amount of 2,3 GW related to CUSTs that have been running since 2022, with no works started, which is being reserved at no cost for generating plants that have had an injunction granted”. Until March, there was a total of 5,5 GW that had CUST running without receiving income from the sale of energy.

It turns out that, in cases where there is an injunction, the ONS (National System Operator) is legally prevented from collecting debts from generators, generating revenue frustration for transmitters. This revenue frustration will later be paid by all users of the transmission system in the subsequent tariff cycle; in other words, this bill will be paid by electricity consumers.

Another point that ANEEL What it wants to solve is the queue of generation projects that is accumulating while agents wait for the release of access opinions to the distribution and transmission systems, but are unable to do so due to lack of space in the network.

The agency's expectation is to achieve an amicable termination of the CUST of the generating plants, concomitant with the revocation of the respective generation licenses and exemption from any applicable fines by ANEEL, but with some conditions such as the consent of broadcasters; no debts with broadcasters; waiver of legal disputes related to the CUSTs entered into; and no contracts sold in the regulated contracting environment. Along with the Public Consultation, interested parties may send their intention to adhere to the proposal to the ONS until June 6.