The Brazilian Government reduces energy load requirement for entry into the Free energy Market, starting in the second half of 2019

Submitted on Tue, 01/29/2019 - 18:51
new rules for the free energy market

The Brazilian Ministry of Mines and Energy published in a decree at the end of December 2018 the expansion of access by companies to the Free Procurement Environment (ACL) in the Free Energy Market.

Decree no. 514/2018 explains that starting 1 July 2019, energy consumers with a load of 2.5 MW or greater, fulfilled at any voltage level, can freely choose the concessionary, seller, or permittee from which electricity is to be purchased. Starting the first day of 2020, the load load limit will be reduced to 2 MW.

Currently to participate as a free consumer agent, companies need to reach a load of more than 3 MW and a connection voltage exceeding 69 kV. Companies having a load between 500 kW and 3 MW can buy via the Special Procurement Environment, and the contracted energy must, necessarily, originate from renewable sources, such as solar, biomass, wind, etc.

These changes by the government are anchored in the Brazilian Free Energy Market Law, created in 1995, which defines the ability to review required load limits eight years after the creation of the law.

The reduction of the minimum contracting level is part of a series of policies to drive the free market. According to the Brazilian National Electricity Agency (ANEEL) and the Brazilian Ministry of Mines and Energy, the market has reached a maturity level that allows consumer agents to decide for themselves where they want to buy. ANEEL added that the expansion of the Free Energy Market seeks to bring greater competitiveness and efficiency between agents, in addition to reducing costs for consumers with lower energy consumption.