Daniel Steffens

ANEEL, which consolidated the technical basis for studies on the role of storage in the sector — but still without regulatory developments. There are still important gaps regarding the structuring of the model applicable to storage systems, both in access to the grid and in the granting of concessions, as well as in the definition of charges and forms of remuneration. In other words, although the topic remains present on the institutional agenda, the lack of clearer regulatory guidelines has been inhibiting investment decisions and hindering the consolidation of viable business models for storage. The moment requires not only continued studies, but also the definition of minimum regulatory frameworks that provide legal certainty and allow the strategic role of storage in the Brazilian electricity sector to be unlocked. Curtailment: regulatory reviews and the bill that threatens to return The mandatory reduction of generation — the so-called curtailment — remains the center of attention in 2025 — as it was in 2024 — especially given the continued great influence of renewable sources in the system and the dysfunctional expansion of restrictions demanded by the ONS. As is widely known, Normative Resolution No. 1.030/2022 of the ANEEL established three distinct modalities that can lead to generation cuts: due to external unavailability, due to electrical reliability and due to energy reasons. The rule, although innovative at the time, has come under pressure due to the increase in the number of affected agents and the lack of a clearer economic treatment for the effects of these limitations. Other aspects, such as the “5% or 5 MW” criterion established by the ONS, accentuate the rigor of the operational rules, while reducing the scope for compensation — which has been bad news for generation companies, which, as far as we know, have made a herculean effort to operate in light of the new systemic reality. In the context of public consultation, the ANEEL seeks to revisit the logic of compensation and improve the parameters that support reasonable decisions on dispatch — or its restriction. The technical debate has already been established and points to the need to better calibrate planning instruments, in order to mitigate the financial effects that currently fall asymmetrically on certain agents. On the other hand, the federal government is moving towards a solution of a different nature. The MME (Ministry of Mines and Energy), in conjunction with entities and associations in the sector, began to envision the possibility of treating the impacts of curtailment as a cost to be absorbed through the System Service Charge (ESS). The proposal, still being formulated, would involve the socialization of these values among consumers, without the need to open a sectoral credit line — as has occurred in exceptional situations in the past — or formal renegotiation between agents. The solution, however, is not yet consensual. ANEELhas not signaled agreement with this approach, warning of the tariff impacts and the risk of emptying the logic of individual responsibility that historically guides sectoral regulation — especially with regard to the allocation of risks among agents. If it goes ahead, the proposal could generate significant tariff effects and add another level of pressure on inflation, in a context in which other increases are already on the horizon. The issue remains ongoing, but it reveals a concern that goes beyond the technical debate: how to finance the imbalances in the operation without breaking with the structuring principles of the sector? The MME and the paradoxes of the reform of the electricity sector The search for a more modern and efficient electricity sector has been a recurring topic in official statements. In practice, however, we observe a succession of measures and speeches that do not always align. The coexistence of ambitious goals and fragile institutional structures raises doubts about the real viability of some of the proposals under discussion. One of the most sensitive points is the announced opening of the market for low voltage consumers. The proposal resonates with the expectation of greater freedom of contracting, but it comes up against concrete technical limitations: the lack of adequate measurement, the fragility of the portability mechanisms and the lack of infrastructure to support the massification of the operation already limit the practical applicability of the measure. At the same time, there are signs of expanding tariff benefits, such as the proposed exemption for consumption of up to 80 kWh by low-income families and the reinforcement of mechanisms aimed at the vulnerable population. Even if these measures find social support, their funding through cross-transfers increases the pressure on consumers who do not benefit — especially in a scenario of rising energy inflation. The panorama becomes even more complex given the discussion on the repositioning of sectoral charges. Behind the scenes, the proposal to redistribute financial obligations is gaining strength, increasing the responsibility of the free market for certain systemic costs. The measure, if implemented, could compromise the attractiveness of this environment — precisely at the moment when we are trying to boost it. The lack of coherence between these directions compromises the clarity of the signals that should guide investments and the organization of the sector. Modernization, so often evoked, requires more than good intentions or well-formulated slogans. It requires alignment between technical, institutional and economic objectives, as well as a willingness to address distributive tensions in a transparent and predictable way. The former Bill No. 414/2021, which served as the conceptual basis for the proposal recently forwarded to the Civil House, has not yet had its own outcome — at least in relation to the main points it sought to address. Meanwhile, the sector continues to operate through regulatory patches, one-off compensations and often reactive decisions. The risk is that the promise of transformation will be diluted, once again, by short-term measures. Is it still possible to talk about modernization without making room for voluntary exchanges, consistent economic signals, and solutions less dependent on centralized political decision-making—and the usual parade of hidden clauses that tends to accompany any reform proposal?

Daniel Steffens

Published articles

Modernization in check: tensions and uncertainties in the electricity sector in 2025

When the account doesn't add up, the sector creates another: the Curtailment Account is born?