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4.102. (...) In September 2021, a state-owned holding company was established to take over those operations that have been excluded from the Eletrobras privatization plan, i.e. Eletronuclear (nuclear power subsidiary) and the 50% participation Itaipu hydropower project. (...)

4.103. Brazil's Ten-year Energy Expansion Plan 2030 (PDE 2030) covering the electricity sector consolidates strategic objectives and initiatives to improve its performance. It aims to anticipate discussions and assess how technological changes, combined with economic, environmental, and consumers' preferences, should affect the national electricity system, as well as the opportunities to expand the matrix of generation and transmission. (...)

4.104. The Energy Expansion Plan (PDE) reaffirmed the commitment for the supply of electricity from renewable sources to reach 85% in 2020, set the objective to reach the level of 88% by 2030, in line with Nationally Determined Contribution (NDC) assumed under the Paris Agreement, as well as the determinations of Decree No. 9,578/2018. The Plan also set focus on the decarbonization of matrices. The challenges related to the participation of renewable sources variables, such as wind and solar photovoltaic, are increasingly present in the technical aspect as well as in the commercial and regulatory aspects of the Plan.

4.106. (...) 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. (...)

4.108. As preliminary results of this joint work, the sectoral institutions have already enabled (...) the reduction of sectoral charges related to the construction of new renewable energy projects (...)

4.109. In terms of competencies, 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 ANEEL and carried out by the Electric Energy Commercialization Chamber (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. (...) Regarding self generation of hydropower, concessions for up to 50 MW may be extended once for up to 30 years; generators may sell any non-consumed surplus in the spot free market. (...)

4.110. Setting up thermoelectric plants with a capacity of more than 5 MW requires the National Agency for Electrical Energy (ANEEL) authorization; the same applies to hydroelectric plants with a capacity greater than 15 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. Legislation in this area included the possibility of undertaking existing hydropower plants auctions as a means of collecting a bonus for the concession (a payment for the concession right).

4.112. Energy auctions organized by the Ministry of Mines and Energy (MME) are the main procurement mechanism for distribution companies to acquire energy from generating companies. (...) the National Agency for Electrical Energy (ANEEL) approved the final result of the New Energy Auction A-5 from September 2021, whose investments attracted up to BRL 3.067 billion, enabling the operation of 40 plants with a combined capacity of 860,796 MW. The supply of electricity from this auction is scheduled for January 2026. The auction included electricity from new generation projects, including hydropower, wind, and solar photovoltaic sources, as well as biomass, natural gas, mineral coal, and urban solid waste treatment plants. (...)

4.113. Average electricity supply tariffs increased by 14.99% in 2018 and then rose progressively by 1.67% (2019), 3.25% (2020), and 8.23% (2021) to BRL 602.73 per MWh excluding taxes; these developments were broadly in line with the average inflation rate of 16.6% (IGPM) and 7.0% (IPCA) in the period 2017-21. These tariff developments, inter alia, were due to (...) rainfall scarcity directly impacting hydroelectricity offer, and recourse to generation from thermal plants). [166]
[166] EIU (2022), Industry Report – Energy – Brazil, 17 February: "Severe drought afflicted Brazil's hydropower-dependent economy in 2021. To address this, the state authorities permitted thermal power plants to operate for up to six months without power-purchase agreements (...)

4.114. The tariffs charged to the final consumers remain regulated by the National Agency for Electrical Energy (ANEEL) and vary depending on operational and other costs incurred by the distribution company. Several changes were introduced during the review period. A tariff flag system, which allows the monthly pass through of the extra costs of generating thermal energy to consumers, continued to be applied by all concessionaires connected to the National Integrated Grid (SIN) and to energy distribution concessionaires; the system is aimed at preventing energy distributors from experiencing financial problems again. (...) Industries can be credited with the Tax on the Circulation of Goods and Services (ICMS) according to their production processes. [169] (...)
[169] There are federal (PIS/COFINS), state (ICMS), local (CIP or COSIP (Contribuição para Custeio do Serviço de Iluminação Pública or Contribution for the Cost of Public Lighting) and other taxes/taxes CCC (Conta de Consumo de Combustíveis or Fuel Consumption Account) (...) CFURH (Compensação financeira pelo uso de recursos hídrico or Financial Compensation for the Use of Water Resources) included in the electricity bill.