BRAZIL Law and Practice Contributed by: Débora Yanasse, Bruno Salzano, Luisa Tortolano Barreto and Julia Braga, Tauil & Chequer Advogados in association with Mayer Brown
Since January 2024, all consumers connected to the grid with a voltage level equal to or higher than 2.3 kV are allowed to freely negotiate in the free market, regardless of their consumption level. Customers with total demand below 500 kW must, however, be represented by a retail trading company ( comercializadora varejista ) in order to participate in the free market. High-load consumers – such as industrial facili- ties and data centres – frequently opt to oper- ate within the free market, given the potential for cost savings, contractual flexibility, and the ability to procure energy exclusively from renew- able sources. As further detailed in 1.1 Law Governing the Structure and Ownership of the Power Indus- try , Provisional Measure No 1,300/2025 recently introduced a gradual expansion of the free mar- ket. From 1 December 2027, all consumers, including residential users, will be able to freely This distinction between the regulated market and the free market was created in 2004 by Law No 10,848/2004. The regulated market has been primarily responsible for the develop- ment of greenfield power generation projects, but recently the free market has been gaining relevance, as: choose their electricity supplier. Distinctions Between the Two • the free market offers lower energy prices; • requirements for migrating to the free market are being reduced; and • the BNDES and other lenders have been financing projects in the free market. Power generation companies have been building mixed portfolios of PPAs to develop greenfield power generation projects, both in the regulat-
ed and free markets. With the ongoing expan- sion of the free market in the past years, power generation companies have been increasingly relying on the free market, specifically through self-production structures and corporate PPAs, to develop greenfield projects. 2.2 Electricity Imports and Exports The importation or exportation of electricity is an activity subject to authorisation by the MME pur- suant to MME Ordinance No 596/2011. Pursuant to Decree No 5,668/2006 and ANEEL Norma- tive Resolution No 1,009/2022, electricity import and export transactions are subject to ANEEL’s approval through an importation licence or the exportation registry with the Foreign Trade Integrated System ( Registro de Exportação no Sistema Integrado do Comércio Exterior or SIS- COMEX). MME Normative Ordinance No 60/2022 and MME Ordinance No 418/2019 regulate specific importation and exportation transactions to and from Argentina and Uruguay. 2.3 Supply Mix of Electricity According to information available on ANEEL’s website (reference date: May, 2025), the supply mix of electricity in Brazil comes from the follow- ing principal sources, with corresponding round- ed percentages based on installed capacity:
• hydro – 52.35%; • wind – 15.89%; • biomass – 8.41%; • natural gas – 8.42%; • solar – 8.41%; • oil – 3.93%; • coal – 1.65%; and • nuclear – 0.95%.
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