Secretariat TPR |
WT/TPR/S/358/REV.1 |
S-IV§72 |
Brazil |
2017 |
Sectors |
Other price and market based measures |
Energy |
Relevant information
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The domestic biodiesel market remains regulated by the Government through an ANP operated electronic auction system (reverse auctions), which gives preference to producers certified with the Social Fuel Seal. [103] The ANP sets the volume of government purchases and a maximum price that suppliers must underbid. The distributors are responsible for the commercialization of biodiesel. PETROBRAS operates as a system administrator and has no interference with the volumes to be acquired by distributors. Biodiesel prices received by producers are determined by the auction system. At auctions held between June 2014 and October 2016, average prices followed an overall rising trend and ranged from R$1,884.15 per m3 (June 2014) to R$2,855.10 per m3 (October 2016).
[103] To obtain this certification, biodiesel producers must purchase a minimum share of raw materials from family farmers registered under the PRONAF (Section 4.2.4.3). Minimum shares differ by region: 15% in the north and mid-west; 30% in the south-east, north-east and the semiarid area; and 35% in the south. In the 2014/2015 harvest biodiesel producers purchases stood at approximately R$ 4 billion.
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Secretariat TPR |
WT/TPR/S/358/REV.1 |
S-IV§73 |
Brazil |
2017 |
Sectors |
General environmental reference |
Energy |
Relevant information
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Between 2011 and 2015, Brazil's installed capacity and power generation continued to grow faster than electricity consumption. In 2015, Brazil had 140.6 GW of installed capacity for electricity generation, generated 581.5 TWh of electricity, and consumed 522.8 TWh; these figures represented annual increases of 20.1%, 9.3% and 8.9% respectively compared to 2011 levels. Hydroelectric sources accounted for 64% (70.4% in 2011) of installed capacity, followed by thermal (30.2%), wind (3.5%) and, nuclear (2.4%) sources. [108] Brazil's electricity imports in 2014 accounted for 5.7% of domestic supply, down from 7.4% in 2012; the drop in the hydropower share due to Brazil's exceptional drought in 2015 and 2016 was compensated by the output of thermal power plants which increased the cost of energy. Electricity produced by the Itaipu plant and imported from Paraguay continues to account for most of Brazil's imports. In 2015, Brazil imported 33,651.5 GWh from Paraguay and 913.2 GWh from the Bolivarian Republic of Venezuela, and exported 219 GWh to Argentina and 0.4 GWh to Uruguay. Although under the Ten Year Plan for Energy Expansion 2024 (Section 4.2.2), the share of hydropower capacity is to rise and a number of auctions have been conducted, construction of several hydroelectric plants is behind schedule. The main power consumption groups consist of manufacturing (37.6%), residential consumers (25.1%), service activities (17.5%) and agriculture (5.1%).
[108] There are two operational nuclear reactors in Brazil; a third reactor was due to come online by January 2016 but construction of the plant has become paralysed due to investigations by federal prosecutors into corruption.
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Secretariat TPR |
WT/TPR/S/358/REV.1 |
S-IV§74 |
Brazil |
2017 |
Sectors |
General environmental reference |
Energy |
Relevant information
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ELETROBRAS continues to play a major role in the electricity sector; as at March 2017, the Federal Government owned 40.99% of its common shares, BNDES/BNDESPAR 15.99%, Brazilian Government funds 3.44%, and others 19.94%; in addition, its preferred shares, i.e. those with a higher claim on its assets and earnings than common stock, are owned by BNDES/BNDESPAR (2.73 %) and others funds (16.89%). [112] (...)
[112] ELETROBRAS consists of the following 14 companies: Holding, CGTEE, Chesf, Eletronorte, Eletronuclear, Eletrosul, Furnas, Amazonas Energia, Amazonas Geração e Transmissão, Distribuição Acre, Distribuição Alagoas, Distribuição Piauí, Distribuição Rondônia, Distribuição Roraima, and it owns half of Itaipu Binacional. ELETROBRAS had 50.93% of the shares of the company Celg Distribuição S.A. (CELG) an energy distribution company operating in the Brazilian state of Goiás until November 2016 when Enel Brasil S.A. (subsidiary of the Italian Enel S.P.A.) acquired 94.6% of CELG's shares in a public tender. Moreover, the ELETROBRAS holding controls the Electric Energy Research Center (Eletrobras Cepel), and Eletropar Participações S.A. (Eletrobras Eletropar). It owns 47 hydroelectric power plants, 121 thermal power plants, 2 nuclear power plants, 60 wind farms, and 1 solar power plant. ELETROBRAS (2016), Annual and Sustainability Report 2015. Viewed at: http://www.eletrobras.com/elb/main.asp?Team={D00A1456-A64A-40DC-B7D8-BB2E23A8FACE}; ELETROBRAS online information. Viewed at: http://ri.eletrobras.com/pt/ri/Paginas/Capital-Social.aspx; ENEL online information. Viewed at: https://www.enel.com/content/dam/enel-common/press/en/1666524-1_PDF-1.pdf; and Investopedia online information. Viewed at: http://www.investopedia.com/terms/p/preferredstock.asp.
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Secretariat TPR |
WT/TPR/S/358/REV.1 |
S-IV§77 |
Brazil |
2017 |
Sectors |
General environmental reference |
Energy |
Relevant information
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During the review period, the main regulatory framework of the electricity sector remained virtually unchanged. Law No. 12,783 of 11 January 2013, which governs electricity generation, transmission, and distribution concessions, was amended by Law No. 13.203 of 8 December 2015, which provides for the renegotiation of the hydrological risk of electricity generation and establishes the bonus for the granting of a concession.
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Secretariat TPR |
WT/TPR/S/358/REV.1 |
S-IV§78 |
Brazil |
2017 |
Sectors |
Other price and market based measures |
Energy |
Relevant information
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The National Agency for Electrical Energy (ANEEL) grants concessions for electricity generation, transmission, and distribution through authorizations or public tender procedures; the latter may involve auctions, which are organized by the ANEEL and carried out by the CCEE. The generation concessions granted for hydropower may be extended at the discretion of the Government, only once, for up to 30 years, in order to ensure the continuity and efficiency of the service provided as well as low electricity tariffs. The extension is contingent upon the generator's acceptance of certain conditions set by the ANEEL, including the remuneration tariffs to be applied, a guaranteed supply quota allocation, and quality standards. Quotas are allocated through contracts and they are revised periodically by ANEEL. Regarding self-generation of hydropower, concessions for up to 50MW may be extended once for up to 30 years; generators may sell any non-consumed surplus in the spot market and those not linked to the National Interconnected Grid (SIN) are not bound by the 50MW threshold. In the case of thermo-electric power generation, the renewal of concessions is allowed for up to 20 years and must be requested by the concessionary at least 24 months prior to the expiration of the concession.
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Secretariat TPR |
WT/TPR/S/358/REV.1 |
S-IV§79 |
Brazil |
2017 |
Sectors |
Other price and market based measures |
Energy |
Relevant information
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Setting-up thermoelectric plants with a capacity of more than 5 MW requires ANEEL authorization; the same applies to hydroelectric plants with a capacity greater than 1 MW but equal to or lower than 50 MW. Hydroelectric projects with capacity greater than 50 MW require public-provider concessions in order to trade part of their electricity via auctions. Authorizations for building and operating new thermoelectric generators and certain hydropower plants are granted for 30 years, non-renewable. A renewable period of 35 years is envisaged for new hydroelectric generators. Concessions for building hydropower plants with a capacity greater than 50 MW are granted for 35 years, non-renewable. In 2015, legislation in this area was modified to include the possibility of undertaking existing hydropower plants auctions as a means of collecting a bonus for the concession (a payment for the concession right); two MME ordinances were issued to define the possible bidding evaluation criteria, i.e. through the offering of the lowest tariff (2015) and the additional possibility of bidding by offering the largest payment of bonus (2017). On 25 November 2015, Brazil held one auction under the new regulatory framework that led to the concession of 29 existing hydropower plants, totalling 6 GW of installed power, representing a R$17 billion bonus payment for these concessions. As of March 2017, no auctions have been held under the 2017 alternative criterion.
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Secretariat TPR |
WT/TPR/S/358/REV.1 |
S-IV§83 |
Brazil |
2017 |
Sectors |
General environmental reference |
Energy |
Relevant information
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Average electricity supply tariffs dropped by 13% in 2013 and then rose progressively by 8.8% (2014), 42.6% (2015), and 6.7% (2016) to R$ 421.72 per MWh excluding taxes; these developments (except for 2015) were broadly in line with the average inflation rate of 6.7% in the period 2012-15 (Section 1.2.1). These tariff developments, inter alia, were due to: (...) electricity tariff cuts for households and businesses in 2013 compensated by subsidies to distributors as energy costs rose when low water levels at hydro plants forced a turn to more expensive thermal plants (Section 4.2.4.1); (...)
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Secretariat TPR |
WT/TPR/S/358/REV.1 |
S-IV§84 |
Brazil |
2017 |
Sectors |
Internal taxes |
Energy |
Relevant information
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(...) According to a 2011 Federation of Industries of the State of Rio de Janeiro (FIRJAN) survey at the time of the previous TPR, Brazil had the fourth (out of 27 countries) highest electricity price for industrial consumers; some 48.6% of that price was attributable to federal and state-level taxes (PIS/COFINS and ICMS), as well as to sector-specific charges. [127] (...)
[127] The sector-specific charges finance a variety of programmes, including for cross-subsidization of regions and consumers, safety of the electricity system, research and development, alternative energy sources, and energy conservation. WTO document WT/TPR/S/283/Rev.1, 26 July 2013.
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Secretariat TPR |
WT/TPR/S/358/REV.1 |
S-IV§94 |
Brazil |
2017 |
Sectors |
Loans and financing |
Energy |
Relevant information
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(...) The National Bank of Social and Economic Development (BNDES) provided approximately R$20.8 billion to the Investment Maintenance Program (PSI) in 2015, compared to US$18 billion (R$42.5 billion) in 2014, to finance the purchase of locally manufactured capital goods at administered interest rates. BNDES also provides similar financing for wind and solar farm development, contingent upon progressively more stringent production step-related local content requirements. Wind turbine suppliers of any origin are also eligible to BNDES administered interest rate financing, provided the wind towers are built with at least 70% Brazilian steel by 2016, and photovoltaic suppliers use 60% Brazilian-made components by 2020. (...)
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Secretariat TPR |
WT/TPR/S/358/REV.1 |
S-IV§99 |
Brazil |
2017 |
Sectors |
Tax concessions |
Manufacturing |
Relevant information
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(...) As of October 2015, the import duty on electric and cell-powered vehicles was removed, and the 35% import duty on other hybrid vehicles was reduced, depending on certain specifications such as energy efficiency, in a bid to make these vehicles more attractive to buyers compared to the flex-fuel vehicles.
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