The president of the PSR, Luiz Barroso, stated that the future of the electricity sector lies in the decentralization of supply, but considered that there are costs that need to be paid by distributed generation (DG) s, just as it is also necessary to value the benefits that this technology delivers to the system.
"I'm super in favor of GD and I think the future lies in the decentralization of supply, but there are costs that need to be paid for these technologies and there are values that these technologies add to the system”, he said in an interview for the program Voices of Energy, promoted by the Brazilian Association of Large Industrial Energy Consumers and Free Consumers (Abrace).
According to the consultant, the energy market is practically open with the emergence of distributed generation, allowing consumers to buy energy from whoever they want. “GD is the fastest growing segment in the world. Spain has installed around 6 GW per year and Brazil is no different.”
Barroso said that GD's growth has occurred through various business models, but largely based on an incentive structure. “In the case of Brazil, there is a very strong incentive that in many cases brings a benefit of R$500/MWh and in the best case, R$700/MWh.”
For him, the most important thing is to separate regulatoryly what is the cost to be paid by DG s and what is the value that DG adds to the system. “There is a network cost that needs to be paid, because as the consumer who has DG does not disconnect from the network, he is using the distributors' network in hours when there is no sun.”
energy transition
The consultant also spoke about Brazil's role in the energy transition process. He highlighted that the country has the resources, regulatory framework, investment environment, solid regulatory agencies and, above all, has the scale to become a large “power house” for the supply of low-carbon products globally.
He recalled that while the world is trying to transform the dirty energy sector into a cleaner one, Brazil already has a very clean energy sector. However, he said that the country needs to find a space for natural gas, because other countries have already developed using the input from oil.
“Brazil has a window that needs to be worked on. Gas in Brazil makes economic and environmental sense in several uses, such as in industry, in the transport sector and even in the electricity sector in some conditions. We just need to know how to compare orange with orange,” she commented.
Hydrogen
In the context of climate change, the executive said, Europeans are “pushing” the hydrogen industry as the great global energy transformer. This competition for hydrogen conflicts with the vision of oil companies, which focus on carbon capture and sequestration.
“This technology race is running now. It is not clear who will be the winner. I don’t know if green hydrogen will be able to have the prominence that Europeans are wanting, because today it is expensive, it costs 2,5x more than the price of its competitor.”
For him, Brazil should not be tied to a single technological route. “I think Brazil has to position itself by observing what is happening and try to capitalize on the areas that add the most value.”
“For this reason, the government’s strategy is very important, both in the energy world and in our microcosm of modernization of the electricity sector. Where any path works, agents begin to generate captures of the granting power with individual agendas due to a lack of direction,” he pointed out.
Modernization of the electrical sector
According to the leader, modernization is not a button that we press and the next day we are modern. Modernization is a set of actions that are created and developed over time, which over a certain period will change the direction of the energy market towards a more efficient sector.
“It is very important for the government to give us the direction to where we want to go. Much of the lack of effectiveness of Brazil's modernization measures comes from the government's own difficulty in directing this modernization,” he explained.
For him, modernization involves some main elements: firstly, improving price formation, secondly, recognizing the value that each source adds to the system, thirdly, dealing with market security.
The opening of the free market is an efficiency vector for improving energy quality and the final cost for the consumer. “This opening of the market demands a series of other regulatory improvements, so that we can ensure that the opening of the market benefits the consumer through competition for who best delivers a price or service to the electricity sector.”
