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Aneel Released Data Indicating That Requests for the Installation of Solar and Wind Power Plants Doubled with the Granting of Subsidy
After Provisional Measure 998/2020, which aims to reduce energy tariffs for consumers was approved, requests for the installation of solar and wind power projects nearly doubled, according to data from the National Electric Energy Agency – Aneel. To be eligible for the approved subsidy, only projects that presented their plans one year after the publication of the PM would be authorized.
Subsidy for Solar and Wind Power Projects
In early March, President Jair Bolsonaro signed the PM that modified the proposals in the renewable energy sector, which cover the following segments: solar, biomass, and wind power plants.
The text of the PM indicates the benefits of tariffs applicable to the transmission and distribution systems of clean energy projects. These are counted from the date of approval of the projects, request financing for up to 12 months, and start operating on the project implementation date, up to 48 months thereafter. After this period, such resources will not apply to these new projects.
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Aneel Shows That Requests for Solar and Wind Energy Doubled
Data from Aneel shows that from January to August last year – the period before the publication of the Provisional Measure – 931 projects to install solar and wind power plants were presented. These had a potential of 41 GW.
Shortly after the approval of the PM – between September last year and March this year – the number of requests for the installation of solar and wind power projects doubled, reaching 1,886 requests. Planning shows that if approved, the potential would reach 85 GW of energy.
Provisional Measure 998
The provisional measure ensures that these plants derived from alternative renewable resources receive discounts on transmission and distribution tariffs. This makes the energy they produce cheaper. The aim of generation is to stimulate the growth of energy production from new renewable resources in the country. In addition to solar and wind energy, biomass plants for electricity generation and small hydropower plants also bring benefits.
However, the discounts issued for the electricity generation plants are paid for by other consumers in the country, through the electricity bill. In recent years, the growth of these sources and the increase in subsidy values have begun to pressure energy tariffs, which led the Government to review incentive policies. According to Aneel, the cost of subsidies for renewable energy was R$ 1.1 billion in 2015 and will rise to R$ 5 billion by 2020.
According to Elbia Gannoum, Executive President of the Brazilian Wind Energy Association (Abeeólica), Brazil invests about R$ 14 billion annually in this source. She believes that the price of renewable sources will rise after the subsidy period ends. Nevertheless, she still believes that interest in the area remains high.
Requesting Subsidy for Solar and Wind Power Plants
According to the MME, PM 998 was converted into law in March, recalculating the 12-month deadline for the subsidy for new renewable source plants.
Now, investors must submit authorization requests and rely on incentives before the end of February 2022. The law also stipulates that to guarantee the subsidy, the plant must generate all the planned electricity within 48 months after Aneel’s authorization.
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