Gas-fired thermoelectric plants will reduce energy tariffs, says minister

Gas-fired thermoelectric plants will reduce energy tariffs, says minister

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Gas-fired thermoelectric plants will reduce energy tariffs, says minister

The minister of Mines and Energy, Bento Albuquerque, said on this Tuesday (13.Jul.2021), at an event at the Palácio do Planalto sanctioning the capitalization of Eletrobras, that the entry of gas-fired thermoelectric plants into the Brazilian energy matrix will reduce the tariff of energy at 1.1%.

These thermoelectric plants that will come through auctions will replace the thermoelectric plants that should leave the system in 2027, which currently have an average megawatt cost of R$1,000. The new plants will cost R$ 367 per hour per hour, at most“, he told reporters.

The text of the law establishes the contracting of 6,000 MW of capacity reserve energy directly from thermoelectric plants located in the North, Northeast and Midwest regions powered by natural gas. This delivery will take place in 2026, 2027 and 2028.

He stated that, with all the measures of the law, the energy tariff should fall between 5% and 7% The sanction of Law 14182, which determines the privatization of Eletrobras, was signed on Monday (12.Jul.2021) and published in edition of this Tuesday (13.jul) of the Official Gazette of the Union. Here is the whole (147 KB) of the law that deals with the capitalization of Eletrobras.

For Brazil, the new Eletrobras will be stronger and more efficient. It will contribute to the sustainable economic growth that society craves and deserves“, said the minister. He stated that Eletrobras will be among the 5 largest sustainable energy companies in the world.

Bolsonaro defended the capitalization of Eletrobras in his speech: “Our investment capacity has been decreasing, and the system cannot collapse. Therefore, the privatization [da Eletrobras]”.

He said, however, that he was against the privatization of Caixa, as Minister Paulo Guedes (Economy) wants. “We are not going to privatize Caixa. I wasn’t 100% converted to Paulo Guedes. And don’t even talk to me about privatizing Caixa Econômica”, declared.

Cristiano Vieira da Silva, secretary of electricity at the Ministry of Mines and Energy, stated at the event that Eletrobras lost space in the Brazilian generating complex.

According to the secretary, the participation was 36% in 2011 and dropped to 30% in 2019. “In power transmission, the reduction was from 56% to 45%“he stated. He said that the sanctioned law will allow the investment of R$ 230 million per year, over the next 10 years, in the recovery of springs and native vegetation, in addition to the recovery of hydrographic basins.

vetoes

The president vetoed 14 points of the text approved by Congress. The main vetoes took place in the article that determined that 1% of Eletrobras shares could be purchased by the dismissed employees. It also vetoed the part that forced the government to reallocate employees of the company and subsidiaries who are fired within 1 year after privatization.

In addition, the president vetoed the need for a hearing to define the board of the ONS (National Electric System Operator).

Bento Albuquerque’s minister also said that the text of the law will not be harmed if the president’s vetoes are overturned. “These vetoes were due to the capitalization process itself. Some of them even had legal problems to be kept in the law”, said.

Next steps

The capitalization of Eletrobras goes to BNDES (National Development Bank), which will be responsible for carrying out the study to define the value and quantity of shares that will be offered.

After that, the study must be approved by the CPPI (Council of Investment Partnership Program) and by the TCU (Tribunal de Contas da União).

fare price

The capitalization of Eletrobras generated clashes between the government, which worked for the approval of the text, and associations and opposition in Congress, contrary to the “tortoises” in the final text of the capitalization of the state-owned company.

Associations in the electricity sector and industry calculate that the proposals brought by the Eletrobras capitalization MP (provisional measure) will cost R$ 41 billion to the consumer. On the other hand, the government defends that the text will reduce energy tariffs to consumers.

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