Distributed Generation In Brazil

Author:Mr Fabiano Gallo and Flavia Cerutti Alves Pinto
Profession:DLA Piper
 
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In brief

In recent years the Brazilian government has stimulated the electricity distribution generation sector and the sector has responded to government incentives with significant development. Now, the Brazilian Electricity Regulatory Agency (ANEEL) has decided that it is time to reevaluate the economic balance of the Brazilian net metering system and revise the current regulations for its sustainable development.

Overview

In April 2012, the Normative Resolution No. 482/2012, issued by ANEEL, came into force and established the initial rules for the development of electricity distributed generation in Brazil. From that moment, Brazilian consumers have been able to produce electricity from renewable sources and offset the surplus with their local distribution company (DISCO).

Aiming to improve the initial regulation, promote the distributed generation market and increase consumer participation in the Brazilian power matrix, in November 2015 ANEEL issued a new resolution (Normative Resolution No. 687/2015), amending ANEEL Resolution 482/2012. The improvements brought by this new resolution served their purpose and boosted the Brazilian distributed generation market.

Brazil now has approximately 90,500 consumer units (including residential, industrial, commercial and public sector) benefiting from the distributed electricity generation, totaling roughly 820MW of installed capacity (solar power is the main source, producing around 84% of capacity).

Anticipating the impact that Normative Resolution No. 687/2015 would have, ANEEL established that a revision of the rules of the net metering system would need to be implemented by 2020, this time focusing on its economic aspects (i.e. the cost for consumers that do not benefit from the system and fair compensation for DISCOs). At the end of 2018, ANEEL released a Regulatory Impact Analysis Report (RIAR) with its preliminary conclusions for the changes to be implemented. It also promoted three public hearings at the beginning of 2019 to discuss the proposed amendments with consumers, DISCOs and players in the electricity sector.

What is being discussed

There is consensus regarding the need for a change in the current rules. Electricity sector players, consumers and DISCOs, however, have not yet agreed how and when such changes should be implemented.

The current net metering system allows the consumers to offset 100% of consumed electricity with the electricity generated by them, without paying...

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