In 2011, when discussions about MMGD (distributed micro and mini generation) began, the technical area of Aneel (National Electric Energy Agency) recorded not intending to stimulate larger generating plants and expect incipient expansionjustification used to establish a generous credit system (electricity compensation system, SCEE) and tariff structure with little concern for signaling the impacts of MMGD on the electrical system. Even so, electricity distributors, the segment most affected by the technology that emerged driven by huge subsidies, were already pointing out the need to adapt the tariff structure.
The concern became a reality and was accentuated by subsequent regulatory and legal changes, which expanded the scope and term of subsidies. After dizzying growth, MMGD’s installed capacity (primarily from solar sources, connected to low voltage) today reaches 46 GW, the second largest in the Brazilian electricity sector, second only to hydroelectric plants. The subsidy bill for MMGD grew at the same pace, paid for by distributors and, mainly, by consumers, reaching R$16 billion in 2025, according to Aneel calculations. It is already considered SEB’s largest subsidy, with a tendency to grow even more in the future.
But the impacts of MMGD are not restricted to the subsidies estimated by Aneel. For example, as smaller and lower-income consumers are the ones who bear the largest proportion of MMGD subsidies, the country’s energy poverty increases, also increasing the propensity for energy theft and default. In the physical field, the drastic reduction in load during the day, voltage instabilities, reverse flows, among others, increase costs and investments in networks of electrical energy distribution and pose risks to the continuity of service provision.
The impacts of MMGD also affect the planning and operation of transmission networks and centralized generators. These impacts arise from changes in the system’s aggregate load profile, greater volatility in net demand and limitations in operational predictability, with direct impacts on the planning and operation of the National Interconnected System (SIN). As with most phenomena in the electricity sector, such impacts are strongly correlated with each other and are unlikely to manifest themselves in isolation or as a result of a single factor. Even so, it is possible to identify some central effects associated with the expansion of MMGDwhich reinforce the need for regulatory arrangements aimed at the adequate and integrated allocation of costs and benefits.
Among these effects, those related to power generation cuts due to excess energy supply (curtailment) stand out, which are currently borne by large generators. In this context, the effects of MMGD on curtailment were inevitably the subject of discussions in the third phase of Public Consultation 045/2019 (CP 045), which discusses proposals for regulating generation cuts and ways of apportioning their effects between agents.
The premise of the discussions within the scope of CP 045 seems simple: if MMGD is part of the cause of the curtailment, it must also be part of the solution. However, it is necessary to seek forms of application consistent with the current legal framework, which motivated the rapporteur of CP 045 at Aneel, director Agnes Costa, to request a legal statement from the agency’s attorney’s office, in order to support regulatory decisions and directions on the topic.
The prosecutor’s office produced a succinct document, which clearly addresses the concepts and purposefully presents safe paths supported by law for the agency’s actions. Without going into the legal and regulatory details of the document, the valuable concepts set out in it deserve to be noted, which clarify the regulatory improvements that can be sought to make MMGD part of the solution for curtailment, as well as those that would conflict with legislation, particularly with the MMGD legal framework.
Starting with what cannot be done, as it would be in disagreement with the legislation called “accounting cut”, the main point raised refers to the (disallowance or apportionment of credits after the injection of electrical energy into the grid). According to legislation, the right to credit must be proportional to the energy actually injected, and it is not possible to gloss over or apportion the amounts for economic-financial purposes.
On the other hand, the prosecutor’s office showed that there are relevant regulatory improvements that can be made in light of current legislation. First, the opinion highlights the possibility of promoting physical cuts to the injection of MMGD into networks. Furthermore, it points out that it is inappropriate to state that cutting MMGD would constitute a violation of acquired rights. Emphasizing that there is no acquired right to a legal regime in the abstract, it indicates that the physical cut does not change the SCEE credit regime, making its infra-legal discipline possible. Thus, the infrastructure, with regulatory discretion.
Second, quite relevant, the opinion ratifies the competence of the Aneel cut restriction would be of a technological nature and to structure tariff signals and discipline the use of the network, being able to internalize costs through general, impersonal and prospective tariffs. It indicates that the adoption of tariff stations allows energy to be valued according to the injection time and condition, ensuring equality and adherence to the system’s real costs. The text also highlights the legitimacy of adequate charging for the use of the network and system services, enabling differentiated billing at the time of injection and consumption, as well as charging for control, capacity, flexibility and storage requirements.
The opinion, therefore, helps to put one of SEB’s most important debates on track: how to make MMGD’s accelerated expansion sustainable, physically and financially? The document indicates paths for relevant, prospective and legally secure regulatory improvements, capable of contributing to the desired sustainability. Such paths end up permeating other ongoing regulatory discussions at Aneel, such as that regarding the valuation of MMGD costs and benefits, automatic migration to the White Tariff and smart metering.
Certainly, the journey is long and demands complex, technically and legally based regulatory discussions. We do not understand that the opinion contributes significantly to the debate, in favor of the integration of MMGD the operational logic of the SIN and the mitigation of the transfer of its impacts to other users of the systemwhich generate cross-subsidies and inefficiencies, through undue socialization of costs. We hope that such improvements will be effectively implemented with transparency and decided in the appropriate regulatory forum.
* Angela Gomes is PSR technical director, Jairo Terra is head of regulation at PSR and Gisella Siciliano is team leader at PSR
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