The Ministry of Mines and Energy (MME) published in the Official Gazette (DOU) this Monday (14/08) Ordinance MME No. 318, which establishes the complementary guidelines for the realization of the New Energy Auctions of 2017, Amending MME Ordinance No. 293, dated August 4, 2017. As established by Ordinance MME No. 293, the 2017 and "A-6" New Energy Auctions of 2017 are scheduled to be held in December.

In the "A-4" of 2017, Energy Trading Contracts in the Regulated Environment (CCEAR) must be negotiated, with delivery starting on January 1, 2021, in quantity modality for hydroelectric plants and in the availability modality for thermoelectric power plants Biomass and power plants from wind and solar photovoltaic, being an exclusive auction for renewable sources.

At the 2017 New Energy Auction "A-6", CCEAR will be negotiated with delivery beginning on January 1, 2023, in quantity modality for hydroelectric plants and in the availability modality for power plants from wind power and thermoelectric plants Coal, natural gas combined cycle or biomass.

As announced at the time of the publication of Ordinance MME no. 293, on August 7, 2017, the complementary guidelines of the "A-6" New Energy Auction are fundamentally about thermoelectric generation, especially those from natural gas, coal Mineral and forest biomass. The participation of Hydroelectric Generation Units (CGH), hydroelectric plants up to 5 MW, is also allowed in the New Energy Auction "A-4", of 2017. These topics are detailed below.

Synergy between the natural gas industry and the electric sector 

In addition to the guidelines that determine the general conditions for the thermoelectric power plants, there are specific guidelines that refer to natural gas, considering the synergy with the proposals prepared in conjunction with the natural gas industry in the scope of Gas to Grow, CNPE Resolution No. 10 of December 14, 2016.

The Ordinance addresses priority issues as recommended by the Gas Subcommittee for Growing 8: Integration of the Electric and Natural Gas Sector - SC8, in which the natural gas industry, the thermoelectric generation segment and other agents of the electric sector participated, in addition to Of government institutions.

In summary, the following themes of SC8 were prioritized: 

(A) Possibility of a seasonal declaration of inflexibility, reaching generation "in the base" in months of the year to be declared by the agent and respecting an annual inflexibility level of 50%; 

(B) Flexibilization of distinct declaration of parameters of Unit Variable Cost - CVU and fixed revenue linked to the cost of fuel in inflexible generation - RFComb; 

(C) Change the basis of the RFcomb update from annual to monthly, reducing risk to the seller and giving the appropriate price signal to the buyer and the consumer of energy; 

(D) Formula and indices of fuel price readjustments in the CVU and RFcomb, to allow the declaration of fuel readjustment index that is annually updated by the North American inflation (Consumer Price Index for All Urban Consumers - CPI-U, published by US Department of Labor); 

(E) Alteration of the rolling horizon of the fuel availability verification through the Gas Supply Agreement (GSA), allowing a GSA with initial verification of ten years and at most two additional renewals with the National Electric Energy Agency (ANEEL), being the first Of them of at least five years, always in advance of five years in relation to the end of the period already proven.

As for the rolling horizon for the verification of national gas reserves, it was decided to keep the treatment for the rolling horizon only of the GSA, leaving the treatment of the rolling horizon of the reserves for a second moment in view of its complexity, which implies a deepening of the solution to be adopted and its developments.

In addition, MME Ordinances No. 42, dated March 1, 2007, No. 46, March 9, 2007 and No. 102, dated March 22, 2016, were adapted to reflect the recommendations of SC8 and with the guidelines established for the New Energy Auction "A-6", of 2017.

From the adoption of these measures, as a result of the discussion of Gas to Grow, we expect an improvement in the attractiveness of investments in thermoelectric plants with natural gas, necessary to increase the firm energy of the system and guarantee the expansion of renewable sources.

Other guidelines 

In order to reduce project risks for the implementation of thermoelectric projects centrally dispatched, the "bathtub curve" was maintained, already applied in previous auctions. The improvement of this solution has been evaluated in the scope of the Special Commission of Electric Energy Auctions - CELEE, for adoption in future auctions.

For the 2017 New Energy Auction "A-6", the participation of thermoelectric generation ventures with natural gas due to the closure of an existing open-cycle project cycle, ie the deployment of steam turbines to reuse the heat from existing gas turbines.

It is considered that the term of contract for the New Energy Auction "A-6", of 2017, is not suitable for such projects, due to the mismatch of terms with the existing part already contracted. In this way, a more adequate solution will be designed within CELEE to contract such projects in future auctions.

Participation of Small Hydroelectric Power Plants 

Also allowed in the New Energy Auction "A-4", of 2017, the participation of Hydroelectric Generation Centers - CGH, hydroelectric plants of up to 5 MW. These renewable energy projects with low socio-environmental impact started participating in the regulated auctions in 2016, in the 1st Reserve Energy Auction of 2016, established by Ordinance MME No. 104, dated March 23, 2016. It is unpublished to contract through Of CCEAR, to meet the demand of the distribution agents, which implies some adjustments in the event.

Deadlines 

In view of the changes, the deadline for the delivery, by interested parties, of the documentation for Registration and Technical Entity of the projects with the Energy Research Company (EPE) was changed to 12 noon on September 13, 2017 for all Sources of both auctions. Other specific deadlines were also established for Technical Qualification of CGH and thermoelectric plants.

For the first time, only digital media presentation containing all the digitized documents of the project will be necessary for registration, and it is not necessary to deliver the physical folder of the project, at the first moment, as detailed in the instructions published on the EPE website ( www.epe.gov.br).

Generation Auctions Planning 

It should be remembered that guidelines will be established to carry out the 2017 Existing Energy Auctions, in order to allow for the market recomposition of the distribution concessionaires in the coming years and thereby contribute to the balance between supply and demand. These guidelines should consider amendments to Decree 5,163, of 2004, which are already in progress.

It is also worth noting that a new "A-4" Energy Auction will be carried out in the first quarter of 2018, following the new A-4 Energy Auction of 2017. A New Energy Auction "A-6 "Of 2018, is also in the planning stages. With these four auctions of new energy, the possibility of contracting new energy for the years 2021, 2022, 2023 and 2024 is opened. In addition, a study is also underway to carry out an auction in 2018 to meet the maximum load of the system ("tip"), a need identified in the planning studies carried out by MME. Depending on the form of hiring, this auction will be carried out after adjustments in the legislation.