Alerts
Gradual removal of tariff incentives to Renewable Energy Projects
On March 2, 2021, Law No. 14.120 was enacted setting forth, among other specific changes to the electric sector, the gradual removal of tariff incentives to renewable energy projects based on wind, photovoltaic and biomass sources, provided by paragraph §1°-A of article 26 of Law No. 9,427 of December 26, 1996.
In accordance with the previous rules in force, projects with injected power between 30,000 kW and 300,000 kW were entitled to a reduction, which should be granted upon the issuance of the relevant authorization (Outorga), of at least 50% over the amounts to be paid in connection with the tariffs for the use of the distribution and transmission systems (TUSD/TUST Reductions).
The TUSD/TUST Reductions will not be removed immediately. Projects under development and/or at operational stage shall not be affected, and the applicable reductions shall remain valid until the end of the current term provided under the respective Outorga. However, the TUSD/TUST Reductions shall not apply in the event of future extensions of the validity period of the Outorga.
With respect to projects in which the Outorga has not been requested or projects that may eventually request expansion of the existing Outorgas, the TUSD/TUST Reductions may be granted, provided that the following requirements are met, as the case may be:
- The Outorga shall be requested until March 02, 2022 and all power generation units shall commence commercial operation within 48 months from the date of publication of the Outorga; or
- The expansion of the installed capacity of the Outorga shall be requested until March 02, 2022 and all power generation units associated with the expansion shall commence commercial operation within 48 from the date of publication of dispatch authorizing such change to the installed capacity of the Outorga.
The TUSD/TUST Reductions eventually granted to these new projects will not apply to future extensions of the relevant Outorgas.
