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Energy Sector: Bolsonaro Administration Priority Must Be Solution For Hydrological Risk



Electric sector points out that the priority of the Bolsonaro future administration is expected to be an immediate solution to the problem for the GSF (hydrological risk), an imbroglio that currently holds $ 9 billion in the short-term market energy, and makes investments for the free market environment unfeasible.

The president of CCEE (Electric Energy Trading Chamber), Rui Altieri, said that the matter needs to be resolved urgently. “Today, we have almost R $ 9 billion open. The solution really has to be in the short term,” he warned in an interview.

Medium and long term

The expectation, according to Altieri, is that the next government can also resolve medium and long-term issues in structural areas to prevent the problem from recurring. In this sense, the MRE (Energy Relocation Mechanism) is one of the three subjects indicated to be remedied by the next government.

“It is a very important mechanism, both for the operation and for the commercialization of energy,” notes the president of CCEE, stressing the need to improve its operation.

The MRE determines which plants should or should not generate in the interconnected system, and which volume should be produced. The ONS (National System Operator) centralizes this operation.

For Altieri, another demand that deserves a solution in the medium term is the “organized expansion of the free market”. “When you talk about organized expansion, it is feasible to actually retail in Brazil, which we already have, but not the size it should be,” he explains. The third point is to improve the hiring of distributors.

In the long run, the first issue highlighted by Altieri concerns the resumption of Public Consultation 33 of the Ministry of Mines and Energy. According to the president of CCEE, she addresses issues that deserve to be addressed. As an example, it cites the separation of ballast and energy and other issues, considered by him very important for the market. The measures proposed by CP 33 are now in the PL (bill) 1917/15, which stands in the House.

Provisional Measure

Regarding an alternative to the overthrow of the PLC (supplementary bill) 77, which dealt with the Eletrobras distributors and provided an alternative to the GSF, Rui Altieri sees three possibilities: the first, by legislative means, would be the edition of a Measure Provisional or a new Bill.

ANEEL Proposal

The second way can be a sectoral agreement. This is the proposal made by ANEEL (National Electric Energy Agency) to enable the negotiation of debtors with Coner (Reserve Energy Account) resources as a solution to the hydrological risk.

“It is an alternative that, being feasible, solves the problem,” he says. However, he points out that, since it is an agreement, it is necessary for the two parties (in the case of debtors and creditors) to agree to the proposals. Altieri highlighted the role of ANEEL in the role of conciliator in this case.


The third way out would be a judicial form. “These three fronts have to be dealt with at the same time. You can not bet on just one,” he argues. The president of the CCEE also stressed that the body is open to talks with the market and the new government in order to unlock these guidelines in the sector.

Industry Associations

Brazilian Association of Electric Power Distributors CEO (Abradee), Nelson Leite, said that the expectation for government from 2019 is an environment in which contracts and business sustainability are respected. Another point he points out concerns tariff reductions in order to make them fairer.

According to the president of the Phase (Forum of the Associations of the Electric Sector), Mario Menel, the expectations for the government of Bolsonaro are “the best ones”. He referred to the president-elect’s willingness to dialogue and market opening.

On the other hand, Environment Forum of the Electricity Sector (FMASE) CEO, Marcelo Moraes, believes that with the new president, there will be an improvement in the environmental licensing process, which would facilitate new investments. For him, licensing should be faster, but without loss of quality.

Carlos Baccan partner of Focus Energia, welcomes the liberal trend and the opening to dialogue with the sector. Brazilian Clean Energy Generation Association (Abragel) CEO, Ricardo Pigatto, believes that the government will reduce bureaucracy and stimulate entrepreneurship, and take decisions seriously.