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Market bets on imminent decision on renewable energy compensation

The market believes that the MME (Ministry of Mines and Energy) should issue a measure soon.

Canal Solar - Market bets on imminent decision on renewable energy compensation

Photo: Freepik

Even as debates surrounding Provisional Measure 1300 begin in the National Congress, expectations for a solution to financially compensate renewable energy generators affected by production cuts—known as curtailments—remain lingering among industry players.

The market believes the MME (Ministry of Mines and Energy) will issue a measure soon. The decision is considered urgent given the accumulated losses, which already exceed R$5 billion and threaten the financial sustainability of wind and solar farms across the country.

Most interested parties, however, prefer to wait for the MME's decisions to be announced before expressing their views.

Law

In the view of the president of Abeeólica (Brazilian Association of Wind Energy and New Technologies), Elbia Gannoum, who directly participated in discussions with the MME, reparation is essential to guarantee legal certainty and preserve investor confidence.

"These outages aren't due to power plant failures, but rather to limitations in the transmission grid and the new dynamics of the electrical system. Generators have a right to be compensated," he argues.

According to the executive, the Minister of Mines and Energy, Alexandre Silveira, has already indicated that guidelines will be indicated for the National Electric Energy Agency (Aneel) to adjust the reimbursement mechanisms, which could even lead to the withdrawal of legal actions.

Tariff risk

The president of APINE (Brazilian Association of Independent Electric Energy Producers), Rui Altieri, understands that the reimbursement must cover all impacted sources, including hydroelectric plants and biomass.

He warns, however, of the risks of passing the costs of financial compensation directly onto tariffs. "Any form of compensation, if done in the traditional way today, will impact consumers' pockets. That's what we want to avoid," he stated.

As an alternative, the APINE director advocates a mechanism similar to the one recently applied in the GSF auction, involving the use of concession extensions, whose payments by interested companies would be used to cover compensation, avoiding an increase in electricity bills.

Structural change

Elbia reinforced that the responsibility for repairs lies with the state, since the law already stipulates that generators cannot be penalized for system outages. "It's about complying with the law and ensuring that investments already made don't become unviable," he argued.

Altieri, in turn, drew attention to the need for structural change in the system, recalling recent cases in which hydroelectric plants had to release water during dry periods, due to electrical restrictions or insufficient load.

For him, the solution must be designed with balance. "Compensation is fair and necessary, but it needs to be constructed responsibly, without shifting the entire burden onto society."

The MME was consulted by Canal Solar on the content of the measures being prepared by the Ministry to repair the damage caused by curtailment, but did not comment. The ANEEL (National Electric Energy Agency) said it would not comment on the matter.

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Antonio Carlos Sil
About the Author
Antonio Carlos Sil

Antonio Carlos Sil is a journalist graduated from FMU/FIAM. He worked as a reporter for Brasil Energia, in addition to providing services to Agência Estado, Exame and Canal Energy. Worked in communications consultancies for CPFL Energia, CESP and AES Tietê. Has covered the electricity sector since 2000. Has experience covering events such as energy auctions, conventions, lectures, fairs, congresses and seminars.

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  • Manuel Fernandes de Lima Filho

    I think that in relation to the reimbursement to producers, generators of energy not transmitted, and consequently not sold, it is necessary to verify
    if, when designing and implementing the plants, whether wind, solar or any other source, the transmission capacity of the lines that would be used to transport the generated energy was not previously certified, an obvious fact to make the projects viable.
    Or even if there was a forecast in a reasonable timeframe to increase this capacity (of existing adjacent lines).

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