Energy Newsletter No. 1 – May 2021


With a new look and a new team, we present the first edition of the new Power Newsletter, which gathers information on the main administrative, normative and legal texts related to the regulation of the power sector in Brazil.

Our new Energy and Natural Resources team — led by partners Rafael Gagliardi and Rosi Costa Barros — with the expertise and technical quality that the sector demands, is attentive to constant legal updates and the main events related to the power sector, so that our newsletter works as a reliable, comprehensive and practical source of information.

Check out the first edition of the newsletter below, in a completely redesigned format — more practical and accessible to read and share.

We remain available to help you with any questions and listen to your ideas and suggestions on how we can improve even more.

Boa leitura!

Demarest Energy and Natural Resources Team




Decree regulates contracting of reserve capacity in the form of power

On May 28, 2021, Decree No. 10,107/2021 (“Decree”) was published, which regulates the contracting of reserve capacity, in the form of power, provided for in articles 3 and 3-A of Law No. 10,848/2004, a rule that provides for the sale of electricity in the National Interconnected System (“SIN”). This represents a step towards putting into practice one of the transition measures in the process of modernization of the power sector – the separation between ballast and energy.

This new mode of energy contracting aims to meet the power required by the SIN and to ensure the continuity of energy supply. The following provisions of the Decree are highlighted:

  • The reserve capacity in the form of power will be contracted through auctions held by ANEEL (art. 3). The Ministry of Mines and Energy (“MME”) will be responsible for defining, based on studies by the Energy Research Company (“EPE”) and National Power System Operator (“ONS”), the total amount to be contracted in the auctions (arts. 3 and 4);
  • Contracts – CRCAP. The contracting will be formalized through Reserve Capacity Power Contracts (“CRCAP”) between the winners of the auctions and the Power Commercialization Chamber (“CCEE”), with a maximum term of 15 years (art. 5);
  • Contratos – COPCAP. All distribution agents, free consumers, potential free consumers, self-producers and special consumers must sign a Power Usage Agreement for Reserve Capacity (“COPCAP”) with the CCEE and must provide a financial guarantee. Failure to enter into the contract may result in penalties for agents, including their exclusion from the CCEE framework (art. 7).
  • Surplus and negotiation at the CCEE. The energy associated with the project that trades power for the reserve capacity, will constitute surplus for the sale of energy and may be freely negotiated for acquisition by agents or settlement in the Short-Term Market (“MCP”) (art. 6), unlike the reserve energy that cannot constitute surplus for resale of energy (Decree No. 6,353/2008, § 4, item II of Article 1);
  • All contracting costs will be apportioned among the SIN’s end users of electricity (art. 8);
  • New CCEE competences. The CCEE will be responsible for executing the CRCAP and COPCAP, as well as carrying out the structuring and management of the CRCAP Reserve Capacity Power Contract, the COPCAP and the Reserve Capacity Power Account (art. 2, XIV and XVII of Decree No. 5.177/2004)

A public consultation was also opened by the MME to obtain contributions to the Ordinance containing the Guidelines for holding the Auction for Contracting Electric Power and Associated Energy.

Segundo minuta de portaria, o leilão está previsto para dezembro deste ano e o início do suprimento será em 01/07/2026, para CRCAP; e 01/01/2017, para CCEAR. According to a draft ordinance, the auction is scheduled for December this year and the start of supply will be on July 1, 2026, for CRCAP; and January 1, , to CCEAR.

Read in full – Decree (available only in Portuguese)

Read in full – MME Public Consultation (available only in Portuguese)


House deliberation of the DG Regulatory Framework set for Juneo

Bill No. 5,829/2019, which establishes the legal framework for distributed mini- and micro-generation in Brazil, was on the agenda of the Plenary of the Brazilian House of Representatives ten times in May. However, by May 27, the article had still not be heard.

The regulatory framework is being awaited with anticipation by sector agents. In addition to the discussion of the subject in the Bill, this matter has also been discussed over the last 3 years by ANEEL – by way of Public Consultation No. 10/2018, Public Forum No. 01/2019, Public Consultation No. 25/2019 and Public Forum No. 01/2019 – and was also the subject of discussion by the Federal Audit Court (TCU) last year.

In November of last year, the TCU determined, through Judgment No. 3063/2020-Plenary, that ANEEL was to present within 90 days an action plan to remove the tariff differentiation put forward according to the consumer’s adhesion, or not, to the electricity compensation system (SCEE).

In response, at the end of March this year, ANEEL issued Technical Note 0030/2021. In the proposal put forward, it was proposed to apply Alternative 5 as a final rule for the compensation system, which includes all Distribution System Use Tariffs (TUSD) and Charges and other components of the Energy Consumption Tariff (TE). In any case, ANEEL has expressed its intention to await the deliberation of Bill No. 5,829/2019 in order to avoid regulatory insecurity.

In turn, in early May, the Bill received a new version after undergoing amendments, which will be considered in the Plenary. Among its innovations, there is the modification of distributed mini-generation power, inclusion of criteria for the Consumer Unit to opt for billing with application of the group B tariff, payment of TUSD Fio B, 40% of TUSD Fio A and TFSEE tariff charges and R&D on offset energy, creation of the Social Renewable Energy Program aimed at investments in the installation of systems for Low Income Residential Subclass consumers, among others.

The Bill is also attached to Bill No.2215/2020, which establishes the Electricity Compensation System (SCEE) and Bill No. 1894/2021, which allows the sale of surplus electricity from distributed micro- and mini-generation.

Read in full (available only in Portuguese)


ANEEL publishes Notice of Transmission Auction No. 1/2021-ANEEL

On May 27, 2021, ANEEL published the Transmission Auction Notice No. 1/2021-ANEEL, which has as its object the concession of energy transmission services, comprising the construction, operation and maintenance of transmission lines, substations and other installations forming part of the Basic Network of the National Interconnected System (SIN).

Five lots will be auctioned, comprising installations in the states of Acre and Rondônia, Rio de Janeiro, Mato Grosso, Tocantins and São Paulo, respectively. Each lot includes a date of entry into commercial operation that varies between March 30, 2024, and September 30, 2026.

The winning bidder must submit, for each lot, the lowest Proposed Annual Revenue allowed for the provision of the transmission service so that it can enter into the corresponding concession contract, which is effective for 30 years.

In February of this year, the draft of the Notice and its annexes was sent to the Federal Audit Court (TCU) for analysis of its regularity. From this analysis, on May 26, ministers of the TCU did not detect irregularities or improprieties that would make it unsuitable for the regular continuation of Transmission Auction No. 1/2021, and the Notice was approved by the ANEEL Board of Directors the following day.

Approximately 515km of new transmission lines will be granted, with 2,600MVA in transformation capacity.

The public auction session is scheduled for June 30, 2021.

Read in full (available only in Portuguese)


ANEEL approves and publishes Notice of Existing Energy Auctions ‘A-4’ and ‘A-5’ of 2021

On May 25, 2021, ANEEL deliberated on and approved Auction Notices No. 4 and No. 5/2021-ANEEL, called ‘LEEs A-4 and A-5 of 2021′, intended for the purchase of electricity sourced from thermoelectric generation projects powered by natural gas and domestic coal, respectively, after evaluating the contributions received in Public Consultation No. 42/2019.

At the time, ANEEL also established the Tariffs for the Use of the Transmission System (TUST) and the Tariff for the Use of the Distribution System (TUSDg) fixed at prices from June 1, 2020, for the specified generating plants participating in one of the auctions, according to the Ratifying Resolution ANEEL No. 2.875/2021.

The energy supply period will be from January 1, 2025 to December 31, 2039, for Auction A-4 of 2021 and from January 1, 2026 to December 31, 2040, for Auction A-5 of 2021.

It is noteworthy that in 2023 the termination of energy contracts related to thermoelectric plants, resulting from new energy auctions held between 2005 and 2007 is expected. Thus, according to ANEEL’s board, to ensure the security of the SIN, the upcoming auction will reconstitute the referred thermal energy block.

The public session of the auction is scheduled for June 25, 2021.

Read in full (available only in Portuguese)


Eletrobras Privatization PM is approved by the House and goes to the Senate

On May 20, 2021, Provisional Measure No. 1.031/2021 (“PM”), which deals with the privatization of Eletrobras, was approved by the House of Representatives. The version of the PM (PLC No. 7/2021) that will be considered by the Senate includes some of the following changes:

  1. Contracting of thermoelectric plants for 15 years, with delivery of 1GW in 2026, 2GW in 2027 and 3GW in 2028;
  2. Acquisition of the remaining shares of the Federal Government, following the capital increase, by the employees, both those issued by Eletrobras and the shares issued by its subsidiaries, directly or indirectly;
  3. The Federal Government may grant, for 30 years, a new license of a generation concession under the ownership or control of Eletrobras that has been granted through Concession Agreement No. 004/2004-Aneel-Furnas, in addition to the grant through the Agreement of Concession No. 007/200-Aneel-Eletronorte, which was already included in the original text of the PM;
  4. After the settlement of Itaipu’s debts in 2023, until 2032 the resulting economic surplus will be allocated as 75% to the Energy Development Account (CDE) and 25% to the Federal Government to be applied in an social income transfer program; and from 2033, 25% of the amounts will go to the state-owned company that will be in charge of river revitalization and energy generation obligations in the North; 50% to the CDE and 25% for the Federal Government to invest in a social income transfer program.

Read in full (available only in Portuguese)


ANEEL publishes notices for New Energy Auctions ‘A-3’ and ‘A-4’ of 2021

On May 19, 2020, ANEEL published , corresponding to Auction A-3 and A-4 of 2021.

It is aimed at the purchase of electricity from new generation projects, from hydroelectric, wind, photovoltaic solar and biomass thermal sources, in the Regulated Contracting Environment (ACR), pursuant to MME Ordinance No. 1/2021.

  1. Auction A-3 will start supplying on January 1, 2024 and will have as Marginal Reference Cost BRL 292.00/MWh;
  2. Auction A-4 will start supplying on January 1, 2025 and will have as Marginal Reference Cost BRL 292.00/MWh;

The initial prices for a project without a license and for a project with a license but without a contract vary between BRL 198.00MW/h to BRL292.00/MWh, depending on the energy source; and the reference prices for projects with a license and with a contract vary between BRL 170.37/MWh (HPP hydroelectric source) and BRL 245.14/MWh (SHP and CGH hydroelectric sources).

The Auction schedule initially established was amended by Announcement No. 01, from ANEEL, of May 26, 2021. Thus, the Public Auction Session will take place on July 8, 2021.

Read in full (available only in Portuguese)


BNDES publishes notice for privatization of CEA

On May 17, 2021, the National Bank for Economic and Social Development (“BNDES”) published the notice of privatization of Companhia de Eletricidade do Amapá (“CEA”).

The process aims at granting the energy distribution concession contract in the State of Amapá and the sale of CEA shares held by the State of Amapá, equivalent to 99.864% of the company’s total share capital, all owned by the State of Amapá.

The successful bidder of the auction must also acquire the shares held by the minority shareholders of CEA who exercise their tag along rights, under the same conditions and prices paid by the bidder for shares owned by the State of Amapá.

The public session of the auction is scheduled for June 18, 2021.

Read in full (available only in Portuguese)


CEEE-T publishes privatization notice

On May 12, 2021, the Department of the Environment and Infrastructure of the State of Rio Grande do Sul published Auction Notice No. 01/2021, which has as its object the privatization of the State Electricity Transmission Company (“CEEE-T”) .

The auction consists of the sale of control of CEEE-T, through the offering of a single lot of registered shares held by the State of Rio Grande do Sul (through the holding CEEE-Par), representing approximately 66.08% of the capital stock of CEEE-T.

The minimum economic value for the proposals is BRL 1,699,199,620.04. As indicated in the Notice, the date for submission of proposals will be on June 25, 2021, with the public session starting on June 29, 2021.

Read in full (available only in Portuguese)


CEMIG will dispose of shares in Taesa

On May 6, 2021, Companhia Energética de Minas Gerais (“CEMIG”) published a Material Fact to inform the start of a competitive process for the divestment of its entire shareholding in Transmissora Aliança de Energia Elétrica S.A. (“Taesa”).

Currently, its participation in the company corresponds to 36.97% of the voting share capital and 21.68% of the total share capital of Taesa. The operation will be carried out by auction, observing the following steps:

  1. May 6, 2021 to July 31, 2021: Conducting a due diligence process by potential acquirers;
  2. 1st half of July 2021: Disclosure of the Auction Notice;
  3. Until July 30, 2021: Delivery of envelopes for participation in the Auction;
  4. By August 16, 2021: Approval of the result of the Auction.

Read in full (available only in Portuguese)


MME establishes the Guidelines for the A-5 Auction, 2021

On May 5, 2021, the Ministry of Mines and Energy (“MME”) published Normative Ordinance No. 10/2021, which establishes the guidelines for the New Energy Auction “A-5”, of 2021, which will take place on September 30, 2021 .

Among the relevant provisions, interested parties wishing to include generation projects must request the Registration and Technical Qualification of the projects (i) by 12:00 on May 10, 2021, for HPPs with a capacity greater than 50MW; and (ii) until 12:00 on June 2, 2021, for other sources.

In addition, the Ordinance provides guidelines for technical qualification, public notice and contracts, auction systematic and declaration of the need to purchase electricity to be presented by distributors.

Read in full (available only in Portuguese)

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ANEEL approves CDE budget for the year 2021

On May 3, 2021, ANEEL Ratification Resolution No. 2,864/2021 was published, which approved the annual budget of the Energy Development Account (“CDE”) for the year 2021.

The budget includes:

  1. the Annual Cost Plan (“PAC”) of the Fuel Consumption Account (“CCC”), in the amount of BRL 8,481,030,312.94;
  2. the Administrative, Financial and Tax Costs (“CAFT”) of the CCEE with the management of sector funds, in the amount of BRL 17,819,246.00;
  3. the CDE USO Annual Quota, to be paid by the energy transmission and distribution agents, in the amount of BRL 19,581,206,178.97; and
  4. the forecasts for the other uses and funds of the CDE, pursuant to art. 13 of Law No. 10.438/2002.

Read in full


CMSE decides on the expansion of thermoelectric generation outside the merit order

On May 5, 2021, the Electric Sector Monitoring Committee (“CMSE”) held a meeting to analyze the energy supply to the SIN.

In April, it was verified that all the hydrographic basins of the SIN presented precipitation below the historical average, allocated to the verification of the lack of rain in the Southeast region during this season.

Thus, it was decided on the possibility of expanding thermoelectric generation measures outside the merit order, as well as the import of electricity from Argentina and Uruguay.

Read in full


ANEEL approves revision of PRODIST Modules 4 and 6

ANEEL Normative Resolution No. 931/2021 was published on May 10, 2021, approving revision 2 of Module 4 and revision 15 of Module 6 of the Electric Energy Distribution Procedures in the National Electric System (PRODIST).

Module 4 establishes operating procedures for distribution systems, so that distributors and other agents can formulate operational plans and programs for distribution systems.

Module 6 defines and details how information will be exchanged between distributors, system users, other agents and sector entities.

The obligations of the interested parties are established, aiming to meet the procedures, criteria and requirements of the technical modules.

Read in full


ONS publishes new version of its Master Plan for Technological Development

The National Electric System Operator (“ONS”) updated its Master Plan for Technological Development, a document that deals with technological changes that may influence or be implemented in the management of the operation of the National Interconnected System.

The document, prepared by specialists in the sector, deals with current and relevant topics, such as the dissemination of Distributed Generation, a wide variety of types of digital expansions, storage of technologically advanced batteries and the influence of digitization, decarbonization and decentralization in the sector.

Read in full


PM creates the National Nuclear Safety Authority

On May 17, 2021, Provisional Measure No. 1.049/2021 (“PM”) was published, which creates the National Nuclear Safety Authority (ANSN).

The ANSN is a federal agency whose purpose is to monitor, regulate and inspect nuclear safety, radiological protection and that of nuclear activities and facilities, nuclear materials and radiation sources in the national territory.

The Authority may create rules and grant authorizations for the transfer and trade of minerals, ores and metallurgical slag.

The Rule also establishes infraction types for agents who do not comply with their rules, gradation of sanctions, precautionary measures and provides for licensing, control and inspection fees for nuclear and radioactive materials.

Read in full


ANEEL approves revision of its 2021-2022 Regulatory Agenda

On May 19, 2021, ANEEL Ordinance No. 6.665/2021 was published, which approved the revision of ANEEL’s Regulatory Agenda for the 2021/2022 biennium.

The Regulatory Agenda was initially published in December 2020. However, some topics related to the Regulatory Agenda 2020/2021 had not been delivered in 2020, which justified its inclusion in the review of the Agenda for the 2021/2022 biennium. Among the modified topics on the agenda are:

  1. Review of Module 10 of PRODIST, which deals with the Regulatory Geographic Information System, for identification and separation of operational provisions from others of a legal nature;
  2. Improvement in work and facility safety regulations;
  3. Consolidation of normative acts related to the thematic pertinence of “Regulatory Accounting”. This agenda was met by the issuance of ANEEL Normative Resolution No. 933/2021, published on May 28, 2021, covered further in this Bulletin;
  4. Amendment to Sub-module 5.6 of PRORET, which deals with procedures for calculating the amounts to be invested in R&D and Energy Efficiency projects, and defines the form of correction of the resource to be collected from PROCEL by the electricity distribution companies; and
  5. Enhancement of the Trading Rules in order to improve the Trading Rules Self-Generating Charges and Allocation modules, specifically regarding the calculation of exclusive use generation for the purposes of payment of charges.

Read in full


ANEEL establishes reimbursement of study values for generation and transmission auctions

On May 24, 2020, ANEEL Normative Resolution No. 934/2021 was published, which establishes the values of the studies that comprise generation and transmission auctions and procedures for their reimbursement.

The values and conditions for reimbursement purposes refer to:

  1. The Hydrographic Basin Inventory prepared in accordance with the Hydroelectric Inventory of Hydrographic Basin Manual and approved by Normative Resolution No. 875/2020;
  2. Technical and Economic Feasibility Studies (“EVTE”) for hydroelectric use, approved by ANEEL under the terms of Normative Resolution No. 875/2020;
  3. The bidding processes for contracting a public electricity transmission service (reports R1, R2, R3, R4 and R5).

Read in full


CPPI recommends the qualification of New Energy Auctions A-3, A-4 and A-5 in the PPI

On May 26, 2020, Resolution No. 175/2021 of the Investment Partnership Program Council (“CPPI”) was published, which gave a favorable opinion and submitted to the deliberation of the President of the Republic the qualification of the New Energy Auctions “A- 3”, “A-4” and “A-5” of 2021, under the Investment Partnership Program (“PPI”).

The PPI is intended to expand and strengthen the interaction between the State and the private sector through the signing of partnership contracts for the execution of public infrastructure projects. One of the objectives of the PPI is to guarantee the expansion of public infrastructure of quality, along with appropriate rates.

The qualification of projects in the PPI is of paramount importance, since with this, the government will concentrate its efforts on activities in which the presence of the State is essential for the achievement of national priorities, projects will be given priority treatment provided for in the legislation and there will be greater integration and coordination of the actions of the Federal Government with private partners in infrastructure projects.

Read in full


Aneel institutes Regulatory Accounting and approves the structure of the Electric Sector Accounting Manual

ANEEL Normative Resolution No. 933/2021 was published on May 28, 2021, establishing Regulatory Accounting and approving the structure of the Electric Sector Accounting Manual (“MCSE”).

The MCSE sets out the accounting practices and guidelines necessary for the proper accounting record of operations and the preparation and disclosure of regulatory accounting statements and reaches (i) agents with power transmission and distribution licenses; (ii) agents with public electricity service generation licenses; and (iii) agents with licenses for the generation of the use of public property to explore the potential of hydraulic energy, in an independent production regime.

The Resolution consolidated Normative Resolutions No. 396/2010, No. 605/2014 and No. 814/2018 in a single act, in compliance with Decree No. 10.139/2019, which deals with the review and consolidation of normative acts under the decree issued by agencies and entities of the federal public administration.

Read in full

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No 9/2021 Improvement of the proposal systematic to assess the consideration of plants that have not traded energy in the ACR and that have not started works in the configuration of the Monthly Energy Operation Program (PMO) of the ONS 20.05.2021 to 06.07.2021


No 11/2021 Proposals for the AIR Report, for the consolidation of normative acts related to the thematic pertinence “Rights and duties of the user of the electricity distribution public service”. 16.06.2021


 No 18/2021 Proposals for Normative Resolutions on the consolidation of normative acts related to the “Rights and duties of the user of the electricity distribution public service”, “Transfer of Public Lighting Assets” and the Regulatory Impact Analysis Report. 23.04.2021 to 22.06.2021
No 19/2021 Proposal for Auction Notice No. 2/2021-ANEEL (Transmission Auction), for contracting transmission concessions, with installations located in the states of Bahia, Minas Gerais, Paraná and São Paulo. 29.04.2021 to 14.06.2021
No 20/2021 Proposal for the compatibility of Grid Procedures with the guidelines of MME Ordinance No. 215/2020. 29.04.2021 to 14.06.2021
No 22/2021 Proposed revision of ANEEL Organizational Standard No. 40, which provides for the analysis of regulatory impact on ANEEL. 29.04.2021 to 14.06.2021
No 23/2021 Proposed improvement of PRORET’s Sub-module 11.1, in compliance with Judgment No. 2915/2020 of the Federal Audit Court (TCU). 28.04.2021 to 11.06.2021
No 24/2021 Improvement of the adjustments and complements in the Draft Notice and Annexes 1-5 and 2-5 in view of the inclusion of Lot 5 in Auction No. 2. 2021-ANEEL (Transmission Auction) 20.05.2021 to 14.06.2021
No 27/2021 Improvement of Electric Energy Trading Rules and Procedures, with a view to operationalizing the provisions of Normative Resolutions No. 898/2020, which establishes regulatory processing of Financial Demonstrations of Secondary Energy, and No. 899/2020, which deals with seasonal adjustments . 26.05.2021 to 25.06.2021
No 28/2021 Amendments to the Electric Energy Trading Rules, in view of the regulatory guidelines relating to hydroelectric displacement motivated by inflexible thermoelectric generation. 27.05.2021 to 12.07.2021


 No106/2021 Technical Note EPE-DEE-DEA-NT-004/2020-rev0, entitled “Guidelines for the Preparation of Technical Reports for the Bidding of New Basic Network Installations – Structure and Content of Reports R1, R2, R3, R4 and R5”, 2020, and Ordinance approving the Technical Note. Until 18.06.2021, in accordance with Ordinance MME No. 509/2021.
No 107/2021 Improvement of the Simulation Model to Individualized Plants for Interconnected Hydrothermal Systems (“SUISHI”). It is a medium and long-term model for simulating the energy operation of interconnected hydrothermal systems, which uses the representation of hydroelectric and thermal plants individually. 24.05.2021 to 05.06.2021
No 108/2021 Ordinance containing the Guidelines for carrying out the Capacity Reserve Auction, of 2021, for Contracting Electric Power and Associated Energy, from new and existing generation projects that add electric power to the SIN. 28.05.2021 to 11.06.2021


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18.06.2021 – Privatization – CEA
Disposal of 99.864% of the company’s total share capital.
Notice: BNDES
More information here
25.06.2021 – Existing Energy Auction ‘A-4’ and ‘A-5’ of 2021
Purchase of electricity from generation projects from thermoelectric sources powered by natural gas and domestic mineral coal.
Notice: ANEEL
More information here
29.06.2021 – Privatization – CEEE-T
Disposal of control of CEEE-T, approximately 66.08% of the capital stock.
Notice: Department of Environment and Infrastructure of the State of Rio Grande do Sul
More information here
30.06.2021 – Transmission auction No. 01/2021 – ANEEL
Concession of 5 lots of transmission lines located in the states of Acre and Rondônia, Rio de Janeiro, Mato Grosso, Tocantins and São Paulo.
Notice: ANEEL
More information here
08.07.2021 – New Energy Auction ‘A-3’ e ‘A-4’ de 2021
New projects. Hydroelectric, wind, solar photovoltaic and biomass thermal sources.
Notice: ANEEL
More information  here
30.07.2021 (delivery of envelopes) – Divestment – CEMIG’s participation in Taesa
Operation comprising the steps of (i) Due Diligence of interested parties; and (ii) Auction.
Notice: CEMIG
More information here
30.09.2021 – Auction ‘A-5’ of 2021
Wind, photovoltaic, hydroelectric, biomass thermoelectric and energy recovery from urban solid waste projects.
Notice: ANEEL (to be published)
More information here


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This material is for informational purposes only, and should not be used for decision-making purposes. Specific legal advice may be provided by one of our lawyers.