Energy Newsletter No. 9 – January 2022

HIGHLIGHTS          NEWS         PUBLIC CONSULTATIONS AND FORUMS         WHAT’S NEXT…

Check out our Energy Newsletter, which gathers information on the main administrative, normative and legal texts related to the regulation of the electricity sector in Brazil, for the month of January.

We are available to help you with any questions and hear your ideas and suggestions on how we can improve even more.
Enjoy reading!

Demarest Energy and Natural Resources Team


HIGHLIGHTS

Government establishes economic subsidies for energy distribution companies

On January 01, Law No. 14.299/2022 was published, establishing an economic subsidy to small-scale electricity distributors (with markets that make up for less than 350 GWh per year) and creating the Fair Energy Transition Program (TEJ) to help the Santa Catarina coal industry.

The economic subsidy to distributors will be funded by CDE resources.

The TEJ aims to promote the energy transition in the coal region of the State of Santa Catarina, whereby in 2040 the State will no longer produce energy via thermoelectric generation using national mineral coal. It will include the contracting of electric energy generated by the Jorge Lacerda Thermoelectric Complex (CTJL), as reserve energy in an amount corresponding to the consumption of the minimum amount of purchase of national mineral coal stipulated in the current contracts.

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Decree regulates measures to address the financial impacts on the electricity sector due to water scarcity

On January 14, 2022, Decree No. 10,939/2022 was published, which regulates the measures aiming to deal with the financial impacts on the electricity sector resulting from the water scarcity situation.

The decree authorizes the creation and management of the Water Scarcity Account by the CCEE, intended to receive funds to fully or partially cover the additional costs distribution companies are facing, arising from the water scarcity situation, whose amortization of financial operations will be done via CDE quotas. These additional costs include the estimated balance of the Centralizing Account of Tariff Flag Resources for the April 2022 period and the energy import in a decision approved by CREG.

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Published Decree that will allow the development of offshore projects

On January 25, 2022, Decree No. 10,946/2022 was published, regarding the assignment of use of physical spaces and the use of natural resources in inland waters under the Union’s domain, in the territorial sea, in the exclusive economic zone, and on the continental shelf for the generation of electric energy from offshore projects.

Our team prepared a client alert on Decree No. 10,946/2022, which can be accessed here.

CPFL Energia opens public call for R&D about wind potential

Companies from the CPFL Energia Group published a Public Call to select proposals for the development of RD&I projects on the improvement of Wind Potential through Knowledge of Generation Deviations and Predictive Maintenance Philosophy.

The projects must address the objectives (i) to master the energy potential of wind farms through knowledge of observed generation deviations; (ii) to carry out a study of wind turbine failures, and (iii) develop a predictive maintenance philosophy based on the study of wind turbine failures.

The deadline for submitting the Project Proposal will end on February 11, 2022.

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NOTÍCIAS

EPE is developing studies on blue, gray, and turquoise hydrogen

On January 05, 2022, EPE announced that it is developing studies on blue, gray, and turquoise hydrogen. This initiative is in line with the National Hydrogen Program (PNH2), published last year by the MME, whose guidelines have as thematic axes, among others, energy planning and international cooperation. The Technical Notes and the studies have not yet been published.

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Report R1 on the study of generation flow in the Northeast region was published by EPE

On January 07, 2022, EPE published the report R1 “Study of Generation Flow in the Northeast Region – Volume 1: South Area”. This is the first study of a set of three volumes, which will recommend reinforcements for the National Interconnected System, aimed at solving restrictions for the connection of future generation projects.

It is estimated that, when all studies are completed, the exchange capacity will increase significantly. This first volume deals only with the expansion of the South Area of the Northeast region. The Ministry of Mines and Energy and EPE are planning a Webinar, still without a set date, to present the premises, solutions, and linkage with other studies in progress, brought about by the aforementioned study.

Read in full

Furnas launches public notice for auction of renewable energy certificates – I-REC and RECFY

On January 10, 2022, Furnas Centrais Elétricas S.S. (“Furnas”) launched the public notice for its Second Renewable Energy Certificate Assignment Auction, which will offer certificates to companies wishing to prove the renewable origin of the energy used in their activities.

The following single delivery products will be offered in this auction:

  • I-REC – Certificates of Electric Energy from Water Source for Trader (Trader), referring to FURNAS projects certified by the Totum Institute, namely UHE Itumbiara and UHE Serra da Mesa.
  • I-REC – Certificates of Electric Energy from Water Sources for Final Beneficiaries, referring to FURNAS projects certified by the Totum Institute, namely UHE Itumbiara and UHE Serra da Mesa.
  • RECFY – Certificates of Electric Energy from Water Sources for Final Beneficiaries, referring to the FURNAS UHE Mascarenhas de Moraes project.

See below for the schedule of the event:

Event Date
Publication of the Notice January 10, 2022
Requests for information or clarifications by the Assignee Bidders linked to the notice and attachments Until January 21, 2022
Publication of clarifications January 27, 2022
Submission by the Assignee Bidders of the Term of Adhesion and the documentation required in item 4.2 of the Notice Until February 10, 2022
Submission for confirmation of participation with login and password February 15, 2022
Auction training/simulation February 16, 2022, from 10 AM
Disclosure of prices At the beginning of the auction, on the website
Holding of the auction February 17, 2022, from 2 PM
Publication of the results Until 6 PM, of the same day as the auction
Submission of the completed Draft of the Renewable Energy Certificate Assignment Agreement to the winning companies Until March 11, 2022

 

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EPE publishes Technical Note “Methodology: Economic Scenario”

On January 17, 2022, EPE published the Technical Note “Methodology: Economic Scenario”, intending to describe the methodology used by EPE in the elaboration of the economic scenario used as the foundation for the development of the Ten-Year Energy Expansion Plan (PDE).

The note brings the process of construction of the economic scenario, which is divided into two stages, the first being the qualitative discussion of the perspectives for the 10-year future, bringing an analysis of the economic situation and mapping of investments. In the second stage, the scenarios are qualified in two modules: macroeconomic projections and sectoral projections.

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Standard on the Provision of the Public Electricity Distribution Service is republished for corrections

On January 21, 2022, ANEEL published the Normative Resolution No. 1.000/2021, which establishes the Rules for Provision of the Public Electricity Distribution Service and revokes several resolutions dealing with the matter. This is a republication of the original text, dated December 20, 2021, due to inaccuracies/changes in the previous version.

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ANEEL publishes complementary modules of the Electricity Transmission Services Rules

On January 21, 2022, ANEEL published Normative Resolution No. 1001/2022, which will enter into force on January 08, 2022, with the complementary modules of the Rules for Electricity Transmission Services, established in REN 905/2021, and some revisions in the modules in force:

  • Module 2 – Classification of Installations of the Electricity Transmission Services Rules;
  • Module 5 – Access to the Electricity Transmission Services Rules System
  • Review of Module 1 – Glossary of Electricity Transmission Services Rules;
  • Review of Module 3 – Installations and Equipment of the Rules of Electricity Transmission Services.

The Normative Resolution also approved the revision of Sub-module 9.1 and Sub-module 9.2 of the Tariff Regulation Procedures, which deals with the Periodic Review of Revenues of Existing and Bidded Concessionaires.

One of the relevant changes concerns the deadlines for issuing access opinions carried out by the ONS; (ii) deadlines for signing usage and connection agreements; (iii) access by distributors to Other Transmission Installations (DIT); (iv) reimbursement of costs incurred by transmission companies in approving project compliance and releasing installations; and (v) the Contracts for Connection to Transmission Facilities (CCT).

The ONS must forward to ANEEL amendment proposals to the Network Procedures associated with the Access Rules within 90 days, counted from the date of publication of the proposed rule to be amended.

Read in full

CONSULTATIONS AND PUBLIC HEARINGS

SUBMISSION OF CONTRIBUTIONS (ANEEL) SUBJECT MATTER CONTRIBUTION TERM
No 21/2021 Contributions for investigating the possible need for regulatory intervention to improve the reliability requirements of transmission facilities. Until February 02, 2022
Nº 01/2022 Contributions for the improvement of the proposal to use the new version of the Newave computational model (version 28), as of the PMO of March 2022. Until February 09, 2022

 

PUBLIC CONSULTATIONS (ANEEL) SUBJECT MATTER CONTRIBUTION TERM
No 73/2021 Obtain contributions for the Regulatory Impact Assessment and the proposal for regulatory improvements related to the sharing of infrastructure between the electricity distribution and telecommunications sectors. Until February 02, 2022
No 80/2021 Obtain contributions on the improvement of the Demand Response Program, referred to in REN No. 792/2017 Until February 14, 2022
No 81/2021 Improvement of the proposal for the Annual Budget of the Energy Development Account – CDE 2022. Until January 30, 2022
No 82/2021 Review of REN No. 696/2015, which establishes criteria and safety actions for dams supervised by ANEEL, as a result of the amendment to Law No. 12,334/2010, which deals with the National Dam Safety Policy. Until February 14, 2022
No 83/2021 Contributions to the improvement of the Regulatory Impact Analysis Report and the draft resolution with the proposed revision of REN 697/2015, which regulates the provision and remuneration of ancillary services in the National Interconnected System. Until February 14, 2022

 

PUBLIC CONSULTATIONS (MME) SUBJECT MATTER CONTRIBUTION TERM
No 118 Proposal of Guidelines for the Consideration of Environmental Benefits in the Electricity Sector – Law No. 14.120/2021 Until February 07, 2022
No 119 Ten-Year Energy Expansion Plan 2031 (PDE 2031) Until February 23, 2022

WHAT’S COMING UP…

 

February 17, 2022 – 2nd Auction for Assignment of Renewable Energy Certificates (FURNAS)
Supply of Water Source Electricity Certificates to the Trader (Trader) and Final Beneficiary, referring to the UHE Itumbiara and UHE Serra da Mesa projects and Certificates to the Final Beneficiary, referring to the UHE Mascarenhas de Moraes project.

More information here
May 2022 – New Energy Auction A-4
Notice: ANEEL (to be published)
More information here
June 2022 – Transmission Auction No. 1/2022 (forecast according to CP 071/2021)
Consisting of 13 lots in the states of Minas Gerais, São Paulo, Espirito Santo, Amapá, Bahia, Pará, Rondônia, Mato Grosso, Pará, Santa Catarina, Mato Grosso do Sul, Amazonas and Acre

Notice: ANEEL (to be published)

More information here
August 2022 – New Energy Auction A-5 e A-6
Notice: ANEEL (to be published)

More information here
September 2022 – Auction for Contracting Capacity Reserve, in the form of reserve energy and according to Law No. 14.182/2021
Notice: ANEEL (to be published)
More information here
October 2022 – Auction to Supply for Isolated Systems
Notice: ANEEL (to be published)
More information here
November 2022 – Auction for Contracting Capacity Reserve in the form of power
Notice: ANEEL (to be published)
More information here
December 2022 – Existing Energy Auction “A-1” e “A-2
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.