Brazil plans RE auctions for isolated regions

Brazil’s Ministry of Mines and Energy (MME) has announced it is updating the conditions for the contracting of power supplies to serve consumer markets located in its isolated electrical systems.

The initiative was developed to guarantee the supply of electric power to over 200 localities located in the north of Brazil, including the capital Boa Vista, as well as the Island of Fernando de Noronha, which do not have connection to Brazil’s national interconnected system.

“Innovation makes it possible to increase the share of renewable sources in those regions, currently served mostly by diesel-fired thermoelectric plants,” the MME said in its statement.

The ministry has said that distribution companies must submit, by June 30 each year, a planning proposal for their respective consumer markets, located in isolated systems, for the following five years, to the MME, through its energy agency Empresa de Pesquisa Energética (EPE).

After the technical evaluation of the proposals by the EPE, the MME may define the guidelines for conducting auctions for these isolated regions, which will be promoted directly or indirectly by the local regulator, ANEEL.

In a separate development, the Ministry of Finance of the southern state of Santa Catarina, Paulo Eli, has announced it will be the next Brazilian state to adopt the ICMS (state sales tax) exemptions for net-metered solar PV systems up to 1 MW.

The number of states that have now agreed to the exemption of the value-added tax for solar prosumers has increased to 24, with only two states left still to join the initiative: Amazonas and Paraná.

The size limit of a project under Brazil’s net metering scheme was recently expanded from 1 MW to 5 MW. The 1 MW limitation, however, remained for the ICMS exemption.