Brazil’s distributed generation to keep growing despite the end of fee exemption

Brazil’s distributed generation (DG) market will continue to grow in the coming years despite the end of the power distribution fee exemption as of January 2023, according to the local DG association.

“The growth rate will be lower due to a DG power base that will end the year with 16GW to 17GW, having added over 7GW to 8GW to Brazil's electric power system,” ABGD association president Guilherme Chrispim (pictured) tells BNamericas.  

Another 10GW could come into the system in 2023, representing a growth of 20%. “As a percentage, we’ll have a smaller growth, but in absolute numbers of power insertion and projects, we’ll continue to grow," he adds.

Approved last January, the DG regulatory framework establishes that any consumer with existing micro or minigeneration or who requests connection to the distribution network until January 6 2023 will have complete exemption from the distribution system use fee (TUSD) until 2045. 

Those who request connection to the distribution network after that date will be subject to a progressive reduction in the cost of the TUSD until the definitive rule on the matter comes into force in 2029. 

According to ABGD, Brazil recently reached 15GW of DG capacity. Driven mostly by solar energy, the figure includes other sources such as biogas, biomass, wind, hydro and natural gas cogeneration.

Among the more than 1.8mn consumers who benefited, 47.9% are residential, followed by commercial (29.6%), rural (14.2%) and industrial (7%).