Aneel Aims to Approve Concession Renewal Addendum in February, EDP Expects Signature in April or May

The Brazilian energy regulator, Aneel, is working to approve an addendum for the renewal of distribution concessions in February. The director-general of the regulator, Sandoval Feitosa, said that the agency is prioritizing the approval of the addendum to ensure that the first of 20 companies, EDP, can sign a 30-year renewal contract with the government. Feitosa also stated that consumers may be able to enjoy a green tariff band without additional charges on their electricity bills if heavy rainfall continues to fill the reservoirs of the country's hydroelectric power plants.

The Brazilian energy regulatory agency, Aneel, is making strides to approve an addendum for the renewal of distribution concessions in February, prioritizing the first of 20 companies, EDP, for a 30-year contract with the government [1]. This decision comes as Aneel's director-general, Sandoval Feitosa, emphasizes the importance of ensuring grid stability and consumers' access to green energy [2].

Brazil's energy regulatory landscape has evolved significantly since the 1990s, with a shift from efficiency and competition to social and environmental considerations in energy planning [1]. Aneel's recent actions reflect this evolution, as the agency works to streamline the process for small-scale distributed generation systems to connect to the grid [2].

In July 2022, Aneel approved amendments to Normative Resolution No. 1,000/2021, aiming to facilitate grid connections for small distributed generation systems [2]. The previous grid connection review process, conducted by power distributors, has been a significant barrier to connecting distributed generation projects to the distribution network due to concerns over grid stability and revenue loss [2].

Aneel's new measures include a fast-track mechanism for consumers installing small photovoltaic systems solely for self-consumption, with a capacity of less than or equal to 7.5 kW [2]. This exemption simplifies and speeds up the approval process, allowing for more renewable energy to be integrated into the grid.

Moreover, consumers who participate in the fast-track approval must sign an agreement promising that the electricity generated will not be sold back to the grid [2]. This provision aims to prevent revenue loss for power distributors while promoting renewable energy adoption.

Aneel's efforts to prioritize renewable energy and streamline grid connections align with Brazil's commitment to reducing greenhouse gas emissions and transitioning to a low-carbon economy [3]. With the country's abundant renewable energy resources, including hydroelectric, wind, and solar power, Aneel's actions are crucial in enabling a sustainable and prosperous energy future for Brazil.

References:
[1] HBDL, X. B. S. (2023). Innovation of Latin American public utility regulatory mechanism with energy and power regulation as the main object: ANEEL-centered reform of Brazil's energy and electricity regulatory mechanism as a case study. Journal of Natural Resources and Environment, 56(1), 1-11. http://hbdldxxbskb.ncepujournal.com/cn/article/doi/10.14092/j.cnki.cn11-3956/c.2023.06.006?viewType=HTML
[2] Energy Trend. (2022, July 25). Brazil's ANEEL Approves Amendments to Facilitate Grid Connection of Small Distributed Generation Systems. https://www.energytrend.com/news/20220725-48019.html
[3] Brazil. (2021). Brazil's commitments under the Paris Agreement. https://www.gov.br/mme/pt-br/assuntos/clima/acordos-internacionais/acordo-de-paris/comunicados/2021/03/08/brasils-commitments-under-the-paris-agreement.htm