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How Will Brazil's Changes in Energy Regulations Affect Costs?

Electricity customers in Brazil have different tariff schemes depending on their voltage level connection to the grid. They pay for both grid costs and energy costs.

Small customers are usually connected at low voltage and pay tariffs per Mega-Watt hour (MWh) consumed (monomial tariffs). High-voltage customers (usually larger energy consumers) have binomial tariffs, paying the grid fee (for capacity usage and a fee calculated using energy consumption in MWh); and the energy cost (which can be acquired freely or not). These two components also include sector charges.

Customers producing energy (or acquiring energy) from small generation (< 5 MW), called distributed generation, have their bills deduced from the energy amounts produced and injected into the grid. Thus, their production is valued at the same price as their DisCo tariffs in R$/MWh).

Thermal costs currently inflate the energy component in the regulated market. Charges and the amortization of older, more expensive power plants, the total electricity cost charged for the GenCo component can look costly compared to some contracts signed for new power plants.

In the future, energy costs in both markets will likely be closer, reflecting the system's security and new renewable technology. Moreover, grid costs could grow from subsidies. Consequently, the free-market migration movement may remain strong if prices remain reasonable, especially while some renewables and distributed generation (DG) subsidies are still in place.

@Maria Carolina Carneiro