Energy sector jurists analyze text of PL 5829

Collaborated Henrique Hein 

Lawyers from the photovoltaic energy sector, heard by the Canal Solar, gave their legal assessments on the new substitute text of PL 5829, which aims to create the Legal Framework for DG (distributed generation) in Brazil. The document should be voted on next Tuesday (17) and sanctioned by President Jair Bolsonaro (no party) in 2021.

According to Frederico Boschin, a lawyer specializing in regulation of the electricity sector, the first point that draws attention is the inspection process in relation to credits – which, apparently, will require a lot of attention from the market in terms of the distributors' billing procedures. .

“It is already complex to understand this for those who work in the sector, imagine for the consumer who has a photovoltaic system at home and will need to monitor all credit billing metrics for at least 10 years”, he said.

Regarding the idea of ​​maintaining the acquired right until 2045, the expert believes that this is great for the segment, because it guarantees the entire life cycle of the assets. However, this could result in an acceleration of the segment.

“Consequently, it will have an inflationary impact on equipment, precisely due to a combination of market conditions, that is, the rise in the dollar, the pandemic, high freight, the race for access opinions until this period. So, a year after the publication of the PL, turned into law, this could bring a big rush that could have an effect on the cost of products”, explained Boschin.

Still on this point, the lawyer said that it will be a challenge for the supply chain, in relation to meeting these new demands for inverters, panels and fixing systems. “Ultimately, PL 5829 makes great progress in the issue of debureaucratization and the creation of a new frontier of more advanced business models regarding the type of energy sharing”, he highlighted.

According to Pedro Dante, partner in the energy and infrastructure area at Lefosse Advogados, the consensus among the associations, MME (Ministry of Mines and Energy) and leaders in Congress for the approval of the new proposal is a major step towards pacifying the issue. “The great security of the proposed regulation is the existence of a transition between the current regime and the new energy compensation criteria, which is essential for the predictability of all investments made in the distributed generation segment,” he highlighted.

The expert also pointed out that the new DG rules will come into force one year after the law is sanctioned, with a transition period of six years being foreseen for systems installed after the new legal framework comes into force to pay in full for all tariff components not associated with the cost of electricity.

“Among them, the use of the distribution network, with all the benefits to the electrical system provided by micro and mini-generation plants being deducted, which must be calculated by ANEEL (National Electric Energy Agency) according to guidelines previously defined by the CNPE (National Energy Policy Council)”, reported Dante.

Regarding article 15 of the text, which defines, precisely, this issue of tariff rules being established by ANEEL, Frederico Boschin commented that this pushes a problem forward again, as it actually brings it back to the customers' exposure. “As of this date, there would be a possibility that is given, by the proposal, which leaves open what the rules would be. It seems to me that there will be a discussion in the future about these conditions. For now, the problem has been resolved, but it suggests that from 2045 we will have, perhaps, a new rule”, he added.

Associations

According to Tássio Barboza, deputy secretary for technical affairs at INEL (National Institute of Clean Energy), the text of Bill 5829 has managed to move forward without losing the foundations of the previous bill, ensuring predictability for new investors and preserving rights for current ones. “In addition, the bill is packed with technical innovations, such as the provision for payment of the TUSD for generation, improvements in the calculation of the cost of availability, among others. DG players have a lot to celebrate. But only after approval, of course,” he reinforced.

According to Carlos Evangelista, president of ABGD (Brazilian Association of Distributed Generation), the new version of the document will help maintain consumer safety, giving them enough time to see a return on their investments. “On the other hand, we were able to achieve an interesting formula for consumers who choose DG, which will maintain the growth trajectory of distributed generation,” he emphasized.

Heber Galarce, president of INEL (National Clean Energy Institute) and director of Government Relations at ABGD, also commented on the subject and emphasized that the document contains measures that will help expand clean energy matrices in the country. “Brazil needs laws that allow for the growth of this sector, in line with the demands imposed by the fight against climate change,” he concluded.

Read more: Sector professionals discuss the new PL 5829 proposal

In turn, Rodrigo Sauaia, president of ABSOLAR (Brazilian Association of Photovoltaic Solar Energy), explains that the new substitute text of PL 5829 provides for the settlement of accounts to be carried out in two stages. In the first, there will be a period of six months for the CNPE (National Council for Energy Policy) to establish the guidelines for carrying out the settlement of accounts.

In the second period, the ANEEL will be responsible for conducting a study on the valuation of GD in Brazil. To do so, the entity will have a period of 18 months after the date of publication of the document in the Official Gazette of the Union. “What will happen is that those who join between the 13th and 18th month will have a different transition rule, with a longer period for amortization of investments, of eight years instead of six,” he said.

“For this investor, the transition rule will be valid for the first six years, while, in the last two years, they will continue to pay TUSD (Distribution System Usage Tariff) Fio B on the energy credit when making compensation. Only after that will it be possible to enter into the account meeting rule”, pointed out the executive.

Sauaia also highlights that the eight-year amortization period aims to provide greater legal certainty to investors who will not have much clarity about what the new rules will be. “As of the 18th month, the bill will be published and clear to everyone, so that investors will be able to make their investments already knowing what the compensation conditions will be after the transition period,” he concluded.

New text alleviates water crisis

In the view of ABSOLAR, the new proposal aims to alleviate the water crisis and help reduce electricity bills for all Brazilians. “Bill 5.829 will strengthen the diversity and security of Brazil’s electricity supply, further alleviating pressure on water resources, reducing dependence on fossil fuel thermoelectric plants and energy imports, in addition to strengthening economic recovery, attracting new investments, generating new jobs, income and opportunities for citizens,” highlighted Bárbara Rubim, vice president of distributed generation at the entity.

For the executive, the legal framework is a priority in the current scenario, as it accelerates socioeconomic development, in line with the fight against climate change in the country. In doing so, it contributes to the energy transition at a time of water shortage and reduced use of fossil fuels, which are more expensive and polluting. “With the approval, Brazil will take another step forward in building a positive, stable and balanced law, which reinforces society’s confidence in a cleaner and more renewable future, with more freedom, prosperity and sustainability,” she concluded.