Overview of the current status of Distributed Energy Resources in Brazil. Distributed Generation, Energy Efficiency, Demand Response, Behind the meter storage and electric vehicles. Also, I discuss the problems of the brazilian regulatory framework to better integrate DERs and how we can design a market framework to develop DERs in a more sustainable and efficient way.

1. Distributed Energy Resources in
Brazil
The role of Distributed Energy Resources in
promoting energy transition
Gabriel Konzen
Rio de Janeiro, RJ
6th September 2019

2. Federal office part of the structure
of the Ministry of Mines and Energy
We develop studies and data/statistics
to support formulation,
implementation and evaluation of
energy policies
www.epe.gov.br
Member of the Board of the
National Council for Energy Policy (CNPE)
About EPE – Energy Research Office

3. Where are we today?

4. What kind of resources are we talking about?
Energy Efficiency
Distributed Generation
Demand Response
Behind-the-meter (BTM) Energy Storage
Electric Vehicles and Charging Infrastructure

5. Energy Efficiency: a long history of promoting
energy conservation
1984 1985 1991 1993 2000 2001 2005 2007 2009 2010 2011 2016 2017 2018
PNE 2030
PNEF – MME
Ordinance 594
PROCEL
Eletrobras
Electricity
crisis
PBE – INMETRO
Law 9.991
PEE ANEEL
Law 10.295: “Energy
Efficiency Law”
CONPET
Electric motors
Minimum standard
IO* 553
Law 13.280 PEE
resources
relocation
PROCEL Label
* IO - Interministerial Ordinance
CONPET Label
Energy Efficiency
Indicative
Measures
Incandescent
bulbs banishment
Vehicles and
buildings labels
Electric motors
Minimum standard
IO* 001
Minimum Standards for:
• Refrigerators (IO*01)
• Air conditioners ( IO*02)
• Electrical Transformers (IO*03)
PAR/PROCEL
1st Cycle
PAR/PROCEL
2ndCycle

6. Source: EPE, 2017. Monitorando o Progresso da Eficiência Energética no Brasil
95
85
82
89
80
85
90
95
100
105
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Industry Transport Residential Total
Efficiency gains in electricity – ODEX Index
Energy Efficiency: a long history of promoting
energy conservation

7. Micro and Mini Distributed Generation: Brazil’s net
metering scheme is very positive for generators
Set by ANEEL in 2012 (REN 482)
Updated by REN 687/2015
Updated by REN 786/2017
Up to
5 MW
Any renewable source
+ cogeneration
Generator Consumer
Distribution Grid

8. Micro and Mini DG: Many configurations are
possible within the net metering scheme
Local
Generation
Remote
Generation
Single owner Multiple Owners
75% of
the capacity
23% of the
capacity

9. Micro and Mini DG: The number of micro and
mini DG systems is skyrocketing in Brazil
Source: ANEEL. September 2, 2019
Numbers of Micro and Mini DG systems in Brazil

10. Micro and Mini DG: We hit the 1 GW mark recently
References: EPE and ANEEL
Cumulative Capacity [kW]

11. Demand Response: Few mechanisms with
controversial results
DR
Mechanism
WhiteTariffs
(ToU)
Demand
Response
Pilot Project
Hourly
seasonal
tariff
structure
(Green and
Blue tariffs)
Consumer
Voltage
LV MV/HV MV
Consumer
Type
Captive
Consumer
Free
Consumer
Captive
Consumer
Optional? Optional Optional Mandatory
Starting
Year
2018 2018 1988
Results Negligible Negligible
Source: EPE, 2015. Estimativa da Capacidade Instalada de Geração Distribuída no SIN
Load curve by voltage level in a weekday of 2014 (MW)
Demand reduction in A4 consumers mainly due to
diesel generators (7-9 GW installed).
Good or bad result?

12. BTM energy storage: Weak economic signals + high
battery costs hinder investments in BTM Energy storage in
Brazil
Business Model
Consumer
Voltage
Possible?
Economic
viable?
1 Save withToU tariffs LV ✔ ✘
2 Peak-shaving (replace diesel
generators)
MV
✔ ✘
3 Peak-shaving LV ✘ (No demand charges in LV) ✘
4 Increase PV self-cosumption
LV
✘ (Injection and consumption
rates are equal)
✘
Negligible capacity installed so far.
Cases focused on reliability and
power quality issues

13. Electric Vehicles: market still modest
EV and HEV represented only 0,2% of car sales in 2018
Source: ANFAVEA
117
484
842 843
1085
3296
3970
2012 2013 2014 2015 2016 2017 2018
EV and Hybrid Cars Licensed in Brazil
0% 10% 20% 30% 40%
Brazil (2018)
Japan
United States
Germany
China
Sweden
Iceland
Norway
Electric car market share, 2017
Source: IEA and ANFAVEA

14. The need for improvements
in our market rules

15. Volumetric tariffs are not cost reflective
Distribution Utility Cost
Variable Fixed
Bill
Variable
(kWh)
Fixed
Simplified representation of bills and costs

16. Distribution Utility Cost
Fixed
Bill
Fixed
Volumetric tariffs + net metering +
distributed generation = cross subsidies
Fixed costs shared
among other customers

17. We already have one of the highest electricity rates in
the world
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
Residential electricity prices in selected economies, 2017
USD (PPP)/MWh
Source: IEA. World Energy Prices – 2019 Edition

18. Besides cross subsidies, our market design have
other problems
• Flat volumetric tariffs and no demand charge in LV:
• Does not encourage the reduction of maximum demand
• Hinder investments in batteries and demand response
• Does not properly value the hourly profile of the generation
• Utilities don’t have incentive to foster energy efficiency.
• Many taxes and charges within the tariffs which gives a distorted economic signal do DER.
• No locational signals to capture the appropriate value of DER.
• No capacity and ancillary services markets in the bulk power system.
• Few actions to rollout smart meters and smart grids.

19. Is DG PV value 10x greater than utility scale PV?
Source: PVTECH, Jun 28, 2019
US$ 220/MWh
as remote DG
In Energy
Auctions
Note: Retail tariff for commercial
customers in Minas Gerais

20. What environment do we propose?
(up for discussion)

21. #1. DER allowed to compete in electric power markets;
also, reduce subsidies to all sources

22. # 2. Create capacity and ancillary services markets and
allow DER to participate in it

23. #3. Set two-part and dynamic tariffs for consumers

24. #4. Allow peer-to-peer trading and commercialization in
the free market of exported energy

25. # 5. Set hourly and nodal prices in the spot market to
better remunerate the sources

26. # 6. Enable the activity of aggregators to facilitate the
participation of DER in the markets and reduce
transaction costs

27. # 7. Rollout of smart meters to enable communication
between DER and the grid

28. Avenida Rio Branco, 1 - 11o andar
20090-003 - Centro - Rio de Janeiro
www.epe.gov.br
/epe.brasil @epe_brasilepe_brasil /EPEBrasil
Obrigado
• Gabriel Konzen
• Energy Analyst