The Energy Regulation and Markets Review - Stikeman Elliott

Brazil
and a draft of the concession contract is issued. Therefore, the agents have knowledge of
the terms and conditions of the regulated contract before they take part into the auction.
It is prudent that the conditions of the regulated contract are determined by
the granting authority in order to ensure the envisaged provision of the electric power
services.
iv Market developments
There appears to be a continuous trend of the Brazilian government in promoting the
development of different types of clean energy. The wind power market has received
special attention from the EPE and, after an auction procedure held in 2011, many wind
power projects were contracted at competitive prices.
The solar energy market is currently a focus, due to the fact that it is a renewable
and non-polluting source and solar resources are particularly plentiful in Brazil. As a
result, ANEEL is discussing the possibility of a discount for solar generators equivalent to
80 per cent of the rates for the use of transmission system and for the use of distribution
system for the first 10 years of the plants’ operations. After such term the discount would
be reduced to 50 per cent.
The state governments are also engaged in the development of the solar energy
industry in order to bring it in the electric power matrix; however, this source is still
considered expensive, inefficient and not currently necessary.
V
RENEWABLE ENERGY AND CONSERVATION
i Development of renewable energy
In Brazil, wind and biomass sources are complementary to hydro sources, especially
considering that the dry season corresponds with the biomass harvest and the windy
season. For this reason, these renewable sources, which jointly with small hydro plants
(‘PCHs’) are called alternative sources, are part of a development programme.
The Program to Foster Electric Power Alternative Sources (‘PROINFA’), as
provided by Decree No. 5,025/2004, was created to increase the participation of the
wind, biomass and PCH sources in the SIN and diversify existing and overexploited
energy matrices.
The main strategic objectives of PROINFA are the diversification of the Brazilian
energy matrix, increasing the power supply security in a sustainable manner; the
reduction of emissions of greenhouse gases; and the encouragement of new technologies.
The contract resulting from the auction held for one of the alternatives sources of
PROINFA has special conditions, such as a discount of 50 per cent or 100 per cent of
the rate for the use of transmission system or the rate for the use of distribution system,
as provided by ANEEL Normative Resolution No. 77/2004.
ii Energy efficiency and conservation
Energy efficiency in Brazil involves the rational use of the energy sources in accordance
with their cost of production and availability; the ONS is responsible for national
energy efficiency. It controls the SIN, deciding which power unit will be dispatched, in
accordance with its efficiency in certain seasons.
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