BRAZIL Law and Practice Contributed by: Débora Yanasse, Bruno Salzano and Luisa Tortolano Barreto, Tauil & Chequer Advogados in association with Mayer Brown
and behaviours violating competition laws by power companies, pursuant to ANEEL’s Normative Resolu- tion No 948/2021. In the event of violation of competition laws, CADE may impose fines for an amount equivalent to 0.1% to 20% of the company’s or group’s gross revenues, as well as other penalties, such as: • prohibition from entering into contracts with official financial institutions and participating in public tenders for a five-year period; • denial of payment by instalment of federal taxes and cancellation of tax incentives or public subsi- dies; and • the transfer of corporate control, sale of assets or partial suspension of activities. Furthermore, companies may be subject to prosecu- tion in the civil sphere and individuals in the criminal sphere. 3. Generation Facilities 3.1 Constructing and Operating Generation Facilities Pursuant to Law No 9,074/1995 and the Concession Renewal Law, the construction and operation rights of power generation facilities may be granted through concessions or authorisations by the MME or ANEEL, depending on the source and size of the power plant. Both concessions and authorisations grant the con- cessionaire or authorised agent a 35-year term in which to act as an independent power producer or self-producer. The construction and operation of large hydropower plants (equal to or greater than 50 MW of installed capacity) is subject to a concession, which is granted after a public bidding process. The construction and operation of small hydro, wind, solar, biomass and fossil fuel thermal power plants is subject to authorisa- tion by the MME or ANEEL. Power generation projects with installed capacity equal to or lower than 5 MW simply need to register with ANEEL after construction.
Environmental licences at federal or state level are also required for the construction and operation of power generation facilities, as well as certain construction and operation permits at local level. Depending on the project’s characteristics, other permits may also be required, such as a water-usage permit. Access to the electricity grid is also a critical part of the process, and is subject to specific regulations, such as ONS’s Grid Procedures, ANEEL’s Transmis- sion Rules and ANEEL’s Distribution Procedures. 3.2 Obtaining Approvals to Construct and Operate Generation Facilities Hydropower generation concessions are usually granted after a public auction, in which the winning bid criterion is the lowest power price, considering the payment of a fee for the use of a public good ( Uso do Bem Público or UBP). Authorisations for power generation facilities are grant- ed by ANEEL upon fulfilment of certain legal, technical and financial requirements pursuant to ANEEL Nor- mative Resolutions No 875/2020 (small and medium- sized hydropower plants) and No 1,071/2023 (thermal, wind and solar power plants). Authorisations are also automatically granted, by the MME or ANEEL, to the winners of the new energy auctions. To participate in these auctions, the projects need to be technically qualified by the EPE upon evi- dence of certain technical, environmental, real estate, grid connection and fuel supply (if applicable) condi- tions that confirm the project’s feasibility. 3.3 Approvals to Construct and Operate Generation Facilities Obligations Permission to build large hydropower plants may be granted by means of public service concessions or concessions for the use of the public good, since all hydro-resources in Brazil are considered public. Concession agreements for power generation place several obligations on concessionaires regarding the regularity, continuity, safety, efficiency and quality of public services, as well as payment of the UBP, if applicable.
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