Electricity bill: subsidies could reach R$37 billion in 2024 – 11/14/2023 – Market

The cost of the CDE (Energy Development Account), which concentrates energy subsidies paid for by the electricity bill, is estimated at R$37.2 billion for 2024.

The value represents a nominal growth of 6.5% in relation to the 2023 budget (R$34.9 billion) — which was already considered very high.

Of the total for next year, R$30.9 billion will be paid for by energy consumers of all sizes. For low voltage, which includes residential consumers, the projection is for an increase of 1.26% for the North and Northeast, and 1.25% for the Southeast, South and Central-West.

The value was placed for analysis at a public hearing by Aneel (National Electric Energy Agency), and the sector will have from November 16, 2023 until January 15, 2024 to discuss the figures.

“It’s an unbelievable cost, and we’re going to the hearing to discuss how to reduce this bill and contain the increases”, says Luiz Eduardo Barata, president of the National Energy Consumers Front.

“We know that the cost for the consumer will not remain there because they are already talking about subsidies for hydrogen, offshore wind and another wave of discounts for distributed generation.”

In ten years, the CDE has practically doubled in size (in nominal terms). According to Barata, the Executive and Legislative branches are responsible for this escalation.

“Although the minister [de Minas e Energia, Alexandre Silveira] saying that they are worried about the increase in electricity bills, they have not yet acted to stop the rise. Congress, in turn, has acted in the opposite direction, and generating more expenses for the energy consumer”, he states.

In the executive’s assessment, at this rate, the CDE will exceed R$40 billion in 2025.

Large consumers will also enter the discussion.

“We are not talking about an increase of R$37 billion”, says Paulo Pedrosa, president of Abrace Energia, an entity that brings together the largest industrial consumers. “When we include taxes, this bill for the consumer rises to R$50 billion.”

A large part of the increases are being produced by deputies and senators, as they respond to lobbies from companies in different sectors in Congress.

Discounts on DG (distributed generation) transmission, mostly solar projects, for example, are expected to increase by 139% for next year. It will cost almost R$1 billion.

Generally speaking, whoever installs the panel and starts producing its energy receives a discount on the use of the wire, which is then paid for by other consumers. “In other words, whoever helped carry the piano climbs on top of the piano”, says Pedrosa.

The item “incentivized sources” is among those that weigh the most. Considering discounts for consumers and generators, both in distribution and transmission, the increase is 17% — from R$9.8 billion to R$11.5 billion.

Renewable energy parks are profitable and established businesses, they no longer need subsidies, according to energy sector technicians. But these projects, many maintained in partnership with the country’s largest industries, still have transmission subsidies.

Contributions to social investments are also growing, but these are not questioned by experts. The social tariff is expected to increase by 10%, reaching R$584 million. The Luz para Todos program increased R$879 million, an additional 54%.

The expense of maintaining fossil fuel-powered generators and thermal plants in distant locations, especially in states in the Amazon region, which are not yet interconnected to the electrical system, has always been increasing within the CDE.

The item is called CCC (Fuel Consumption Account). For next year, however, this cost is expected to fall by 10.5%.