Government decree aims to stimulate the digitalization of energy distribution networks

With the arrival of new technologies and the constant risk of blackouts due to climate events, the MME (Ministry of Mines and Energy) issued an ordinance establishing guidelines for the digitalization of distributors' electrical grids. Ordinance MME No. 111/25 was published in the Official Gazette of the Union on June 23.

The ordinance contains 13 guidelines that must be considered in the process of modernizing the distributors' electrical grid. They are:

• Encouraging innovation and the provision of new services;
• Promoting the opening of the electricity market for low voltage consumers;
• Transparency of consumption and network operation data, including in relation to actions to reduce non-technical losses and defaults;
• Encouraging improvements in the measurement of the quality of the service provided and the means of communication between dealerships and consumers;
• Affordable rates and optimization of the use and operation of electrical systems;
• Encouraging the expansion of open electricity consumption data (Open Energy);
• Promoting the resilience of distribution networks in the event of extreme weather events;
• Driving the energy transition more quickly and effectively;
• Reducing the frequency and intensity of demand peaks, contributing to optimizing the use of the electricity grid;
• Increasing energy efficiency;
• Reducing the risk of accidents involving people, infrastructure and the environment associated with the operation and maintenance of networks;
• Improving consumer awareness on the use of electricity and the optimization of energy resources; and
• The implementation of mechanisms for measuring performance and meeting targets for electricity distribution service concession contracts.

A ordinance It is an important direction so that energy networks can have more modern mechanisms such as smart grids and better use of REDs (distributed energy resources) that GD (distributed generation) and its market agents are installing in millions of consumer units.

The principles that this digitalization process must follow were also highlighted:

• The equal and non-discriminatory management of access to electricity distribution and communication services for users, observing the criteria of economic reasonableness and the capacity to execute digitalization plans;
• Transparency in communication and provision of information about possible supply interruptions;
• Compliance with technical, safety and regulatory standards established by the competent official bodies, to guarantee the safety of the population, workers and the environment;
• Agility in resolving consumer demands and passing on information to the National Electric Energy Agency – Aneel;
• Tariff affordability, energy transition and modernization in the distribution segment; and
• The guarantee to consumers of the implementation of control and monitoring mechanisms for the quality and continuity of the provision of electricity distribution services.

The order now goes to the regulatory authority ANEEL (National Electric Energy Agency) and should be implemented over the course of 10 years (until 2035).

MME wants to digitalize the energy distribution system by 2035

One of the mechanisms of digitalization is smart meters, or digital clocks. Replacing current clocks with state-of-the-art equipment will allow for more accurate readings, will be an important point for improving energy efficiency in energy consumption and will enable the introduction of new business models, including the digitalization of the electricity sector. New companies should emerge bringing innovative solutions to consumers.

The main point of this ordinance is that it will bring empowerment to the energy consumer, a process that will bring more competition and better costs, and that despite still depending on regulation, should be implemented quickly, starting implementation in places where there is the largest concentration of consumers, which are the large urban centers.

Read MME Ordinance No. 111/25, published in the Official Gazette of the Union.

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