The provisional measure (MP) report for the electricity sector establishes the opening of the energy market for all consumers and the creation of a ceiling for subsidies funded by the Energy Development Account (CDE). The text will be assessed by the joint commission created for its analysis in Congress this Wednesday.
The rapporteur, senator Eduardo Braga (MDB-AM) welcomed more than 100 amendments to the report. The parliamentarian presented the report this Tuesday. After analysis by the Commission, the proposal must pass through the plenary sessions of the Chamber and the Senate.
The text establishes changes on different issues in the electricity sector, such as generation cuts at power plants and regulation of electrical energy storage activities.
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Market opening
- The proposal foresees the opening of the market so that all consumers can freely choose their suppliers and energy sources from 2028.
- The text aims to ensure that all consumers can choose their energy supplier, whether by their preferred source (hydraulic, solar, wind, etc.), or by the most advantageous price offered.
- The objective is for consumers to have the same freedom that exists in the telephone market, for example.
- For industry and commerce: from August 2026.
- For other consumers: from December 2027.
- Currently, only large consumers can participate in the free energy market. However, this was restricted only to consumers with a high consumption standard.
- To make this possible, the MP creates the figure of the supplier of last resort, who will supply energy if the company contracted by the user fails.
Subsidy limitation
- According to the text, a ceiling will be created to limit the growth of the CDE from 2027 onwards. The CDE is a fund used to bring together all the benefits of the sector, paid for by consumers in their electricity bills. The total cost of the fund will reach R$50 billion in 2025.
- The CDE pays for benefits such as incentives granted to incentivized sources, and social programs, such as the social tariff and the Luz Para Todos program. The text establishes a ceiling for each subsidy granted. The benefited sectors will have to bear costs to cover any eventual exceeding of the budgeted ceiling.
The text, however, creates exceptions for expenses that do not have a CDE funding limit:
- Light For All
- Social Tariff
- Consumers benefiting from the Fuel Consumption Account (CCC);
- CDE administration costs, Fuel Consumption Account (CCC) and Global Reversion Reserve (RGR) by the Energy Trading Chamber (CCEE)
- Small distributors
Energy storage
The project advances the regulation of energy storage activity, creating incentives for battery energy storage systems in Brazil. The National Electric Energy Agency (Aneel) will be responsible for regulating and monitoring the market in the country.
The sector will have an anticipation of the effects of the Tax Reform to 2026, with relief from IPI, Cofins, and PIS/PASEP when purchasing from the domestic market and importing materials for energy storage systems.
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Aneel may establish requirements for control, capacity, flexibility and energy storage among the general conditions for contracting access to and use of electrical energy transmission and distribution systems.
With the growth of intermittent sources in the electrical matrix, the need for an energy storage solution grew, increasing the control of load injection into the system in wind and solar plants.
Generation cuts
The text also advances measures to try to contain the growth of forced generation cuts in wind and solar power plants.
- The situation is complex and is called curtailment. Basically, every second, the ONS needs to activate the energy generating park in a volume exactly equal to the country’s demand at that moment. Therefore, there are situations in which it is necessary to stop production to avoid excess supply.
- Solar and wind plants are the main ones affected by the cuts, which for the most part are not financially compensated.
- The proposal creates a compensation mechanism for these companies from September 1, 2023 until the measure is approved. The rules must still be defined for a term of commitment that will be signed.
