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Eight entities from the electricity and industry sectors sent a formal request to the National Congress to overturn President Luiz Inácio Lula da Silva's vetoes on the offshore wind farm law.
The document was forwarded to the President of the Senate, David Alcolumbre (Union-AP), and to the President of the Chamber of Deputies, Hugo Motta (Republicans-PB). According to the entities, the changes made by the government can affect investments in the sector and increase energy costs in Brazil.
Furthermore, the associations argue that removing these points harms the predictability of the energy market. As such, investors may feel insecure about making investments in the sector, which compromises the growth of renewable energy.
Main vetoed points
Among the sections vetoed in the presidential sanction, two points are considered crucial by the sector:
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- Postponement of the end of the contracting of thermal power plants until 2050 com Energy Commercialization Contracts in the Regulated Environment (CCEAR). According to the government, this measure could prolong dependence on fossil sources, delaying the transition to renewable energy.
- 20-year extension of Small Hydroelectric Power Plant (PCH) contracts, biomass and wind power plants included in the Incentive Program for Alternative Sources of Electric Energy (Proinfa). The government's justification is that this extension would create an imbalance in the energy market, hindering competition and affecting innovation in the sector.
Furthermore, the government argues that maintaining these rules would only benefit some companies. At the same time, it would prevent new competitors from entering the sector. To avoid this scenario, vetoes were applied.
Impacts on the electricity sector
The entities that signed the request warn that maintaining the vetoes could have an impact new investments, the development of renewable sources and the generation of jobs.
According to the calculations presented, the revocation of the vetoes could attract R$68 billion in investments and generate 200 thousand new jobs per year.
Furthermore, the group argues that the expansion of Hydroelectric Power Plants up to 50 MW could reduce the need for thermal power plants. This way, there would be a more sustainable transition to cleaner and less expensive sources.
Another point highlighted in the document sent to Congress is the impact on electricity costs.
According to estimates, overturning the vetoes would reduce the price of energy for consumers. In the case of SHPs, the cost per megawatt-hour would increase from $ 465 to $ 285. To the Proinfa wind farms, the reduction would be R$801 to R$189 per MWh.
For this reason, the entities argue that overturning the vetoes would have positive impacts on both the market and end consumers. This would ensure a more accessible and competitive energy sector.
Energy security issue
Another central argument of the electricity sector is that overturning the vetoes could strengthen national energy security.
The entities state that, if the expansion of the hydroelectric plants up to 50 MW, there would be an increase of 4,9 GW of firm capacity in the system. With that, this expansion would replace 3,75 GW of natural gas-fired thermal plants, provided for in the Eletrobras Law of 2021.
Furthermore, the signatories of the document emphasize that the vetoed thermal generation was already provided for in previous legislation. For the sector, its replacement by renewable sources would be more economical and sustainable.
This would strengthen the Brazilian electricity grid without compromising the sector's competitiveness. Furthermore, the integration of new renewable sources would reduce the risks associated with fluctuations in fossil fuel prices.
Impact on Proinfa and electricity bills
The proposal also covers the impacts on Incentive Program for Alternative Sources of Electric Energy (Proinfa), which finances renewable energy projects.
According to the entities, overturning the vetoes would allow a relief of R$1,4 billion in the Energy Development Account (CDE) in 2025. This factor would reduce the cost of energy for consumers and businesses.
Additionally, expanding hydroelectric power could help offset the intermittency of offshore wind farms, ensuring a more balanced matrix.
With this change, it would be possible to offer greater stability in the energy supply, avoiding price fluctuations over time.
On the other hand, the lack of incentives for renewable sources could compromise Brazil's competitiveness in the energy transition. As a result, the country could miss out on strategic investment opportunities in the sector.
Entities signing the request
The request to review the vetoes was signed by the following entities in the electricity sector:
- Brazilian Association for Clean Energy Generation (Abragel)
- Brazilian Association of PCHs and CGHs (ABRAPCH)
- Gaucho Association for the Promotion of Small Hydroelectric Power Plants (AGPCH)
- Association of Small Hydroelectric Plants of Goiás (APCH)
- Santa Catarina Energy Producers Association (Apesc)
- Intermunicipal Union of Energy Generation, Transmission and Distribution Companies of the State of Minas Gerais (SINGTD)
- Union of the Construction, Generation, Transmission and Distribution of Energy Industry in the State of Goiás (Sindienergias)
The entities state that the overturning of vetoes by Congress will ensure legal certainty and predictability for the electricity sector.
This change could facilitate new investments and allow Brazil advance the energy transition in a competitive and sustainable way. Furthermore, the measure can generate direct benefits for the consumer, reducing the cost of electricity in the long term.
With this, the country would have a more balanced, sustainable and efficient matrix, guaranteeing the supply of electricity in a reliable and accessible way for the population.
