Brazil’s electricity sector expects US$70 billion in investments by 2030 – ANEEL

RIO DE JANEIRO, BRAZIL – The Brazilian electricity sector is expected to receive investments amounting to R$365 (US$70) billion by 2030, ANEEL’s General Director André Pepitone said on Monday during the World HVDC Week 2021 online event.

The estimate contemplates new investments in centralized generation (R$182 billion), in Transmission (R$90 billion) and distributed generation (R$93 billion). “Brazil will be the electric sector’s building site by 2030,” said Pepitone.

He stressed that the quality of regulation at ANEEL (Brazilian Electricity Regulatory Agency) – recognized by the OECD (Organization for Economic Cooperation and Development) and by risk agencies such as Standard & Poor’s and Moody’s – guarantees security to attract investments to the sector.

“We regulate with a focus on adding value to society,” said Pepitone. According to him, since ANEEL was established, the Brazilian electricity sector has received investments amounting to R$934 billion.

To an international audience, Pepitone highlighted the strength of the transmission system in Brazil, a country of continental dimensions. “When placed over a map of Europe, our transmission system covers nearly the entire European territory,” he emphasized.

To exemplify the system’s solidity, Pepitone cites the Tucuruí-Macapá-Manaus Transmission Line, with its gigantic towers to cross the Amazon River near the city of Almeirin (PA).

“Both are approximately 295 meters high with a span of 2 km between them. They are almost as tall as the Eiffel Tower in Paris,” he said.

The system has been continuously expanded in recent years, due to improvements carried out by ANEEL in 2016 that ensure the attractiveness of new transmission line auctions.

In 2016, the estimated WACC increased from 4.60% to 8.04%. The deadlines for construction of the lines were extended and became more in line with the reality of entrepreneurs. This reduced the risks and results have been seen in the last bid tenders, with all offered lots awarded and high competition among players, leading to lower costs for consumers.

Pepitone highlighted other agency measures that further favor investments in transmission, such as the contractual incentive to the anticipation and partial entry of independent facilities, the introduction of contractual clauses that cover the risk matrix, the contractual discipline for fortuitous and/or force majeure cases, and the Granting Authority’s option to ask the Federal Environmental Agency to undertake projects of systemic interest.

Source: ANEEL