The agenda included discussions on the supply of incentivized energy and migration to the free market
A technical team from the Ministry of Mines and Energy visited Comerc Energia headquarters in São Paulo this past Wednesday, August 16. Comerc was one of four companies chosen to present how it works in the energy market, and submit proposals to improve the industry. According to Comerc CEO Cristopher Vlavianos, “it was an honor to have been chosen for a visit from the Ministry. This type of interaction is important to look for solutions to develop the industry, benefiting energy consumers”. In addition to Ministry representatives, executives from the Electric Energy Trading Chamber (CCEE) and over ten representatives of different areas within Comerc participated in the discussions.
One of the main topics addressed at the meeting was a shortage of incentivized energy such as wind, biomass, solar and small hydro (PCH). Right now, consumers in the special category – those with contracted demand between 500 and 3,000 kW -, may only contract energy from incentivized sources. According to Vlavianos, one option to increase the supply of this type of energy would be to adjust the rule that defines what constitutes an incentivized source. Today, incentivized energy is limited to generators no larger than 50 MW, and only those generating 30 KW or less have the right to a discount on the distribution fee. “There are larger generators capable of delivering clean energy that are not considered incentivized simply because they can generate more than 50 MW”, added the executive. “This reduces the supply available to special consumers, and does not foster an increase in clean energy generation in Brazil, limiting any potential benefits for the environment”.
The solution Comerc suggests is for the government to incentivize any renewable energy source produced by generators up to 300 MW, be they biomass, solar, wind or qualified cogeneration. However, according to Law 13,203/2015, currently incentives apply only to energy generated by plants auctioned or authorized after January 1 2016. “The idea is to extend the benefit to all energy generated from clean sources including in plants that came on-stream before January 2016, without changing the current criteria for discounted distribution rates, which currently apply to generators up to 30 MW. All that would be needed would be to include generators up to 300 MW in the incentive plan, without necessarily conceding any discount on the distribution fee (TUSD). This would vastly increase the supply of energy for special consumers, and the volume generators can negotiate, with no need for new incentives. In such a scenario, pretty much all players would be winners “, added Vlavianos.
Comerc also took the opportunity to address migration to the free energy market, which already accounts for 30% of all the energy consumed in Brazil. “The last big migration wave happened in 2015 and 2016. At the time, we faced a number of hurdles because of the large amount of bureaucracy that is still required to migrate”, said the CEO. “In tough economic times, it is even more important for companies to have options to lower their energy costs. This is why it is so important to do whatever possible to facilitate migration to the free market”.
The Ministry visit is part of the government’s incentives to learn more about processes in the energy industry in Brazil. In addition to items related to regulation process and pricing in the free market, Comerc executives discussed issues concerning the natural gas industry and energy efficiency.