Parliamentary amendments by 'tortoises' in offshore wind project put pressure on tariffs and oversupply of energy, experts warn

Approval of the bill foresees an increase of R$39 billion/year in energy tariffs, impacting contracts and plants.

Os tortoises They are terrestrial reptiles, known for their round and resistant carapace. They are found in diverse habitats, from tropical forests to cerrados and savannas.

Os tortoises They are protected by environmental laws in several countries, due to hunting and illegal trade. In Brazil, they are considered wild animals and hunting is prohibited, but unfortunately many are captured and sold illegally.

Bill on offshore wind farms receives parliamentary amendments

The project, at its base, envisaged regulating wind farms at sea. However, measures with different objectives were included by deputies shortly before the vote in the House.

Approval of the bill

• Extension of the contraction of coal-fired thermal plants: R$5 billion
• End of the ceiling price for gas thermal plants in the North, Northeast and Central-West regions: R$ 16 billion
• Subsidy for the use of transmission lines using renewable sources: R$6 billion
• Hiring de the energy wind farm in the south of the country: R$500 million
• contracting green hydrogen thermal plants: R$3 billion.
• Contracting of small hydroelectric plants (PCHs): R$8,6 billion

Abrace's director of Electric Energy, Victor Hugo iOcca, predicts that the and impact nose rates start within four years.

'We estimate that the final impact is around R$39 billion. That increase it should start in three or four years and will last until 2050. So, we are talking about a tariff impact for at least another two decades', he said.

In addition to a more expensive bill, experts point out that 'jabutis' — a term used to describe parliamentary amendments without a direct link to the main text — go against the grain of Brazilian energy policy, being considered interference. In the assessment of professor Nivalde de Castro, from the Institute of Economics at the Federal University of Rio de Janeiro (UFRJ), Brazil has the capacity to formulate and produce an energy policy 'that few countries have'.

Impact of parliamentary amendments

The professor mentions the various entities and institutions that lead the energy sector, such as the Ministry of Mines and Energy itself, the National Electric Energy Agency (Aneel) and the National Electric System Operator (ONS).

Another point that draws specialist attention is in relation to the energy oversupply scenario in Brazil, which could worsen.

The National Energy Consumers Front also criticized the amendments added to the project. For Luiz Eduardo Barata, president of the front, in a scenario of increased oversupply it could generate lack of interest among energy producers, which distorts the market.

For Victor Hugo iOcca, Brazil has the capacity to cover all sources, but it is necessary to focus on development to generate a homogeneous increase in consumption in all regions of the country.

'Any mandatory energy contract unfortunately worsens the current scenario. We live with very high reservoir levels and we have an oversupply of energy because we are investing heavily in distributed generation and centralized renewable generation. So today Brazil is already experiencing an oversupply that could be used, for example, for the reindustrialization of the country'.

Approval of the project by the Chamber

However, a section was inserted that extends until 2050 contracts in force with coal-fired thermoelectric plants — one of the most polluting energy sources in the world. These contracts would end in 2028, but can now be extended for another 27 years.

For experts, the amendments go against the agenda of decarbonizing the electrical matrix.

'The country has already lost the opportunity to decarbonize its matrix by 2025, as long as it continues to use this technology. As well as the obligation that Brazil has to contract thermal plants at the base was placed. In other words, they need to generate every day throughout the year and use natural gas, burning another fossil fuel to generate on the basis of our electrical matrix', says iOcca.

Approval in the Senate

Although the project was approved by the Chamber last Tuesday (28), the text must now be analyzed by the Senate.

Impact on energy prices

The possible increase in energy prices raises an alarm among experts, since the cost of energy in Brazilians' budgets already represents 23,1%, according to a study produced by Abrace. The value refers to the final price of the goods that make up the basic basket.

When analyzing isolated items, the association points out that the daily bread is one of the items that most feel the weight of rising energy bills – as soon as it comes out of the oven, 27,2% of the final price of the bread is energy and the gas used throughout the production process.

Final approval and impact on Brazilians’ pockets

The weight is even greater between meat and milk, with 33,3% of the price on the shelf being energy, according to the study. The 'jabutis' present in the project have generated concern among experts, as it will directly impact Brazilians' energy bills.

Source: CNN Brazil