Carlos Evangelista

There has been much talk in the electricity sector, among parliamentarians and in the press regarding amendments supposedly unrelated to the text of Bill No. 576/2021, which establishes a regulatory framework for the generation of offshore wind energy. In particular, criticism focuses on the costs that may be incurred by the end consumer and contradictions regarding the low-carbon economy. We have been surprised, in many of the demonstrations, by the lack of direct mentions of article 23 of the Offshore Wind Farms Bill, which, in the understanding of a considerable number of experts in the electricity and sustainability sector, brings contributions to the generation of clean energy, meeting the objectives of the regulatory framework in question. Article 23 is of strategic importance for the Brazilian electricity sector and has positive impacts in several dimensions, as it proposes extending the deadline for connecting micro and mini distributed generation (MMGD) solar plants from 12 to 24 months from the signing of the Distribution System Usage Agreement (CUSD). Source: Chamber of Deputies This measure only corrects an inconsistency in the regulatory system, while directly benefiting Brazil's energy transition, as shown below: Legal certainty and investor confidence: Changing the regulatory framework for counting the deadline for the Connection Budget for the CUSD promotes greater legal certainty, allowing entrepreneurs essential predictability for the completion of projects. This reinforces investor confidence, especially in a market that already faces significant infrastructure and bureaucracy challenges. No new costs: Extending the deadline does not generate additional costs for consumers or for public policies to encourage distributed generation. The text does not open space for new projects under the same rules, but only allows existing projects to have enough time to overcome delays caused by third parties. Preservation of investments and job creation: The veto of the article could lead to the loss of 8,6 GW of capacity in projects already approved, compromising R$36 billion in investments and thousands of jobs. Guaranteeing this additional period ensures that such resources remain in Brazil, encouraging economic development and sustainability. Justifications go beyond the incentive aspect The implementation of MMGD projects faces obstacles that are beyond the control of entrepreneurs, often unknown to the press and parliamentarians, hence the need to extend the deadline for connecting ongoing projects: Energy distributors are still adapting to MMGD: As this is a recent generation modality, distributors are still adapting their systems and procedures to this service, which is why the regulated deadlines for issuing documents and inspections end up being breached, causing delays that can compromise the viability of the projects. Delays in environmental agencies: Environmental licensing often takes longer than expected, jeopardizing the project schedule. Lack of infrastructure and coordination: The difficulty in making investments viable by energy distributors and the complexity of bureaucratic processes also contribute to the slow completion of projects. Reduction of judicialization and social benefits Maintaining Article 23 has the potential to reduce judicialization in the electricity sector, as it corrects a structural imbalance that often results in litigation. Furthermore, by allowing projects to be completed, the article ensures direct benefits for “prosumers” (conventional consumers who produce their own energy), small rural producers and local entrepreneurs, in addition to encouraging the diversification of the Brazilian energy matrix with clean and renewable energy. Generation close to the load An additional justification is that generation by MMGD occurs close to consumers, presenting benefits for the electrical system such as: (i) reduction of technical losses in distribution; (ii) postponement or even elimination of investments in distribution and transmission networks; and, (iii) minimization of the effects of climate change that threaten energy transportation infrastructures. In the future, there will be a need to adapt to this new way of generating energy through greater control of the networks, but only when the level of MMGD penetration increases significantly, which is not the case with the extension foreseen in the article in question. The importance of sanctioning Article 23 Article 23 is a measure that promotes regulatory justice, preserves investments already made and encourages the advancement of Distributed Generation in Brazil. Its veto would compromise not only the development of the sector, but also the transition to a cleaner and more inclusive energy matrix. In this context, it is important that the Executive, when sanctioning PL 576/2021, guarantees the maintenance of article 23, reaffirming Brazil's commitment to sustainability, energy security and the promotion of a low-carbon economy.

Carlos Evangelista

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