By Nei Costa

Even with all the uncertainties caused by the corona virus pandemic, the Institute for Climate and Society (iCS) presented its contribution to the Public Consultation of the Energy Efficiency (EE) Auction that the National Agency of Electric Energy (Aneel) will hold in Roraima, more specifically in Boa Vista.

In the document filed with Aneel, iCS states that the state of Roraima is experiencing a particular situation from the energy point of view, either by not being connected to the SIN, or because it is supplied almost exclusively by thermal sources using oil that are pollutants.

It also explains that the state suffers frequent interruptions in the delivery of electricity and, overall, restrictions on its development by not providing a safe and reliable supply of energy.

“This initiative, although it may be considered modest, represents an important signal for the local economy, enabling the availability of capacity to meet the growth of the repressed demand of the state and allowing an increase in the awareness of the population regarding the efficient use of energy,” highlights the iCS.

The Institute recognizes that the State has the ideal conditions for a pilot project that could be introduced subsequently to the rest of the country. In order to cooperate towards the success of the auction, iCS made some suggestions.

iCS considers that the potential of energy efficiency is proportionally high, as shown in the field studies of the potential of energy efficiency made in 2018/2019, within the scope of the BCO2R project of collaboration between MME/SPE and iCS.

In addition to the need of energy availability for the growth of the local economy, the Institute proposes to increase the volume to be contracted at the energy efficiency auction.

“We understand that the high cost of thermoelectric generation in Boa Vista/RR represents a valuable opportunity for the unallocated resources of the PEE,” it clarifies.

According to iCS, due to the consumption profile and the curve of the local load, the inclusion is suggested of other classes of consumption: government, public services, industrial and even rural, expanding the area of the program beyond the capital Boa Vista, thereby contributing to the achievement of greater effectiveness and attractiveness in the auction.

In order to ensure the continuity of the actions during the period of implementation, as well as the economic attractiveness of the auction, iCS suggests that there is the financial participation of the consumer in the investments, in a defined minimum percentage.

According to iCS, for those consumers where it is necessary to exchange old meters for electronic meters, for hourly measurement, this cost should be borne by the distributor. The modernization of the measurement system will allow greater control of the measures of energy efficiency.

The Institute for Climate and Society evaluated that the adoption of Purchase Contracts of Avoided Electric Energy is unnecessary and is of no use in this event, because the avoided energy cannot be accounted for by the purchasing distributors. “Although the same contracts are necessary when the auction is extended to the national or regional scope, we understand that, in this pilot, the contractual commitment of payment, proportional to each one of the participating distributors of the apportionment and the saved energy, is sufficient.”

iCS suggests that the participation of the interested parties through the Consumption Reducing Agent (ARC) is not obligatory, and that any company can qualify, through proven and appropriate documentation, to participate in the program, whether a consultancy, ESCO, educational entity, manufacturer or engineering company.

Another presented suggestion is the adoption of a longer period, both for the implementation of the actions and projects, and for the program. In the assessment of iCS, six months are not sufficient for the implementation of the high number of projects to be realized and mobilized.

“Likewise, actions such as the installation of micro- and mini-systems in distributed generation require a length of return of over five years, as currently established in the program.”

Finally, the Institute for Climate and Society considers it fundamental that the resources of the program are used for an independent evaluation, not only of the effective results of the actions adopted in terms of Measurement and Verification (M&V), but also for the suggestion of improvements for future auctions, providing support to ANEEL for the regulatory impact analyses.

Future auctions

iCS took the opportunity to make suggestions with respect to future energy efficiency auctions and emphasized that market mechanisms are an effective instrument for the promotion of EE and are adopted in several countries around the world.

iCS believes that, faced with the regulatory constraints, this auction is being carried out with great advances by the Agency. “However, for the next auctions, iCS presents some suggestions regarding what it considers to be advances in the direction of the promotion of EE.”

With the advance of the Modernization Project of the Sector, currently represented by PLS 232/2016 and PL 1917/2015, the surplus (or capacity)/energy separation may materialize. Furthermore, the Ministry of Mines and Energy (MME) has already expressed the possibility of carrying out capacity auctions. The EE should participate in these auctions as a source of capacity, competing on equal terms with other sources of generation.

iCS explains that PLS 232/2016 also establishes advances in the separation between the services of connection and the sale of energy (wire – energy). This separation would lead to distinct businesses. The beneficiaries of the EE are society with the improvement of the energy intensity, the consumers with the resulting low rates and, also, the distributor in the operation of the connection infrastructure to the electric network.

With respect to the extension of the EE auctions to other regions, iCS suggests that it would be important to previously identify the relevant designs of the distributor, taking into account the location and times for the optimization of the use of the infrastructure, deferring investments in the reinforcement and expansion of the distribution network.

Offer of point reduction: this auction may be held by distributors, under the regulation of ANEEL, where individual consumers, or combined through consortia or by ESCOs, would offer EE projects, centered on point reduction in specific areas, enabling the reduction, either of TUST/MUST, or of expansion in the distribution systems.

iCS argues for the use of part of the resources of the PEE to set up a Guarantee Fund for EE projects, reducing the risks and costs of implementation and facilitating their financing, because one of the main barriers existing today for EE projects is the compliance with guarantees by the ESCOs and companies to the funders.

Another suggestion of the iCS is to assess the regulatory impact of the obligation of EE targets for consumers and distributors, with the issue of negotiable EE certificates in a market formed by these agents. The targets and the market would be compatible, although not limited, to the application of the resources of the PEE.

This text was originally published on the website of the Renewable Energy Forum on June 12, 2020