OPINION

The announcement of SAR adoption from 2018 marks the fifth change in risk aversion methodology. In this Opinion section, we try to show that: (i) the conceptual basis of these methodologies is relatively simple, and all have the same objective, which is to achieve a certain degree of operational security; (ii) on the other hand, the methods are very different in terms of applicability, computational effort, number of parameters etc.

REGULATIONS

In this section we make an initial assessment of each amendment to MP 735 approved by the House.

WATER RESOURCES AND ENVIRONMENT

The subject of this section is the imbroglio of Manaus-Boa Vista transmission line.

INTERNATIONAL

In this issue, we analyze the breaking of the monopoly of CFE (Mexico’s state electricity company), after the reform of the electricity sector in the country; and the challenges of Africa for the renewal of its energy matrix.

SUPPLY

This issue presents the updated balance of energy demand and structural supply for the coming years, including our traditional delay meter.

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OPINION

In this issue we analyze in detail how the contracting of only ballast by bidding would be and, in particular, what would be its effect on the financeability of projects.

REGULATIONS SPECIAL SECTION

We analyze in this section the historical evolution of the CCC, ANEEL's performance in tackling inefficiencies, especially of Amazon State utility, and the outlook for the reduction of CCC considering the energy integration of major isolated systems in recent years.

REGULATIONS

The topics of this section are: (1) still the issue of distribution utilities surpluses; (2) and the auction was postponed again.

WATER RESOURCES AND ENVIRONMENT

In this issue we analyze the difficulties for obtaining the Prior License (LP), Installation License (LI) and Operation License (LO) of the projects.

SUPPLY

This issue features the updated balance of demand and structural energy supply for the coming years, including our traditional delay meter.

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OPINION

In this and in the next ER issues we will discuss possible adjustments in the sector's model. In this issue, we analyze the subject of firm capacity and supply security. The next subjects will be: (i) pricing and impact of risk-aversion mechanisms on hydro generators; (ii) participation of the free market in expanding the supply; and (iii) adaptation of distribution activity to the insertion of distributed generation and demand response.

REGULATIONS

In this section we analyze: (1) daylight saving time 2015/16; (2) proposal for a new energy MCSD; (3) auction of hydro plants concessions; (4) why auctions are always postponed; and (5) distribution facilities for the Olympic Games.

WATER RESOURCES AND ENVIRONMENT

The topics of this issue are: the drought of Paraíba do Sul River, Rio de Janeiro water quality and security for the Olympic Games.

SUPPLY

This issue features updated balance of demand and structural energy supply for the coming years, including our traditional delay meter.

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OPINION

This editorial analyzes the impact of a higher spatial and temporal detailing of economic signals (tariff for use of the transmission network and energy prices) to consumers, generators and planners. The potential benefit of these more detailed signals is due to the penetration of renewable generation (biomass, wind and solar) in medium voltage and should increase with the entry of distributed generation (solar, fuel cells etc.) and demand response at low voltage.

REGULATIONS

In this section we deal with: (1) "tariff flag meter"; (2) proposal for the 4th Tariff Review Cycle of CPFL Piratininga; (3) Public Hearing (AP) on ancillary services; (4) AP on transfer of Other Transmission Facilities to distribution utilities; and (5) A-3 Auction: requirements for wind power plants connection to the network.

ENVIRONMENTAL

The theme of this section is the economic and social importance of fish farming for consumption (aquaculture) in reservoirs.

SUPPLY

This issue features the structural balance of energy, an analysis of delays in generation projects and our traditional “Delay Meter”.

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OPINION

This section analyzes the benefits of detailed probabilistic simulations (hourly intervals, full transmission network and joint scenarios of flows, renewable production, equipment failures and changes in demand) for the calculation of supply reliability, analysis of regulatory impacts and planning the integration of renewable sources.

REGULATIONS

In this section we comment on: (1) MP's actions against the grant of use of water resources by ANA (written by Jerson Kelman, former director general of ANA and ANEEL); (2) new floor and ceiling values of the PLD; and (3) public hearing on changes in old CCEARs by availability.

ENVIRONMENTAL

In this section we comment on the lack of coordinated planning in the various spheres of government and its consequences, as in the case of the mining project in Volta Grande [Big Bend] of Xingu River, affected by Belo Monte Hydroelectric Plant

JURIDICAL

In this section, Advocacia Waltenberg analyzes the application of tariff flags from 2015.

SUPPLY

This section features: (i) structural balance of energy; (ii) delays in construction of new supply for the horizon 2014-2018; and (iii) delay meter - monitoring the historical record of delays.

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OPINION

In this issue, we seek to clarify, as quantitatively and factually as possible, a number of questions raised by the press and by agents regarding the electrical power system supply security. For this, we analyze several indicators: (i) risk of an energy rationing being enacted ; (ii) operation marginal cost greater than the economic cost of cutting supply; and (iii) blackouts caused by faults in the transmission network and by recent problems of generation spinning reserve.

REGULATIONS

This section addresses the following topics: (i) penalties for plants behind schedule; (ii) amendment of penalty clauses in CCEARs; (iii) certification of CCEE computational programs – and what it shows about the rules; (iv) postponement of changes in ACL contracting; (v) provisional CDE; (vi) guidelines for the A-3 auction of 2014; and (vii) the current crisis, in past editions of ER.

JURIDICAL

This section makes an historical and legal analysis of situations that resulted in claims for economic and financial rebalancing of contracts for electric energy trading.

ENVIRONMENTAL

The topics of this section are: (i) environmental impacts deriving from the operation of PCHs; (ii) (another) mistaken analysis of emissions from the electricity sector; and (iii) the bidding for Três Irmãos power plant.

SUPPLY

This section presents an updated overview of electric energy supply in Brazil, through structural balances of energy (with and without friction factors) and of peak, developed by PSR.

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OPINION

In this issue we analyze the reasons for the fast emptying of the reservoirs on São Francisco River. In particular, strong evidence is shown that there has been a structural reduction in the region's flows, and that unduly restrictive operation with respect to minimum flow also plays an important role. PSR suggests that it would be possible to reach a win-win situation, with greater flexibility in operation to meet the needs of multiple uses of the river.

REGULATIONS

This section discusses the following topics: (1) A-3 auction and meeting demand; (2) trading rules for 2014; and (3) expansions in plants under the quota regime.

JURIDICAL

In light of recent events with great potential impact for the sector, associated with abuse of the right to strike and vandalism, this section provides an analysis of the legal treatment of "excludentes de responsabilidade" in the electricity sector, and its key role in limiting risks to the entrepreneur.

ENVIRONMENTAL

This month's theme is the recurrent concern with the delay in Belo Monte plant construction. PSR identifies a more marked delay in social-environmental works required by environmental licensing, and analyzes the main causes and consequences of this difficulty.

SUPPLY

This section presents an updated overview of electric energy supply in Brazil, through structural balances of energy (with and without friction factors) and of peak, developed by PSR.

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Electronically published since 2006, the PSR Energy Report is a monthly newsletter developed by PSR, whose main objective is to present a comprehensive and current analysis of regulatory, legal issues, water resources and environment and supply of the electricity sector in Brazil.