Retail Energy Market liberalization in

Brazil and introduction of DER Nelson Fonseca Leite - President of ABRADEE (Association of Utilities, Brazil)

Overview of the Energy Distribution Sector

2

Consumers 81 million

Number of connections/year 2.2 million

Universalization 99.7% of households

Employees 209 thousand

Population 206.8 million inhabitants

Gross Revenue US$ 65.5 billion

Charges and Taxes *free and regulated markets

US$ 24.2 billion

Energy Demand *free and regulated markets

412 thousand GWh (327 thousand GWh – regulated)

Gross Revenue/GDP 3.5%

Annual Investments US$ 4.2 billion

Quality Satisfaction Index 76.8 % (March / 2017)

Overview of the Energy Distribution Sector

63 Power Utilities - data 2016

Brazil : 63 Power Utilities

4

Evolution of Distributed Generation

5

6

0 1-100

101-501

501-1000

Above 1000

Distributed Generation

Evolution

Utilities whit more connections

0 500 1000 1500 2000

359

371

393

419

495

502

512

1,007

855

2,168

2500

ELFSM

RGE

Ampla

Coelce

Light

RGE Sul

Celesc

Copel

CPFL Paulista

Cemig

Current: 11,635 Consumer Units

N°

Consu

mers

Distributed Generation

PROJECTIONS (MICROGGERS)

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

1.230.980

617.671 112.144

1.400.000 1.200.000 1.000.000 800.000 600.000 400.000 200.000 0

Condominium + Tax exemption+ Generation away from the load

Condominium + Tax exemption

No revision of REN 482/12

Resolution 482/12

Energy Storage

Applications for Brasil

9

PV

+Storage

to

replace

Diesel

Energy Storage Applications for Brasil – On the Grid

Investimento gradual e de acordo com a demanda

Energy Storage

Addicional

capacity

(i) Postpone investments in

transmission and

distribution

Transmission

(iii)Renewables

Integration (iv) Sistems not

conected to the grid

Intermitent

Ramp

(ii) Peak time generation

0:00 4:48 9:36 14:24 19:12 0:00

Dia útil Sábado Domingo

Peak

generation

Baterries

10

Replace thermal

Generation

11

Expansion of The Grid

Record growth in 2014 of

Average Growth (1996-2002)

1.562 Km per year

Average Growth (2003-2014)

4.440 Km per year

2001 2001 2014

Total Growth

Evolution of Electric Vehicles charging

stations

12

13

Typical Communication System for Power Utility

14

15

Conclusions

16

Key take aways

• Utility industry is undergoing profound change • Both technology and business model disruptions are driving this change • These disruptions have significant impact on utilities across the value chain • New models are emerging and Brazilian experiences are timely and relevant • It is time to prepare for a part of the transition • Policy and regulatory clarity and support for innovation will be key

17

• New business model will emerge, but it is not yet defined how Utilities will add value by implementing new technologies;

• Need to define public policies;

• Some measures will greatly increase the need for smart meters:

>The Government is launching a public consultation on a new set of rules for the power sector expanding the commercialization on free market

>The National Power System Operator (ONS) will initiate a tariffs project day ahead and intraday

>The Electric Power Regulator - ANEEL - is implementing, in January 2018, the Time of Use Tariffs

> The growth of Distributed Generation

• Power Utilities should:

>Reorganize their processes

> Enhance their practices and empower their staff

>Having capital reserve and financial leverage capacity

Conclusions

SCN - Quadra 02 - Bloco D - Torre A Sala 1101 - Edifício Liberty Mall CEP 70712-903 Brasilia DF Brasil Tel 55 61 3326 1312 Fax 55 61 3031-9327 abradee@abradee.org.br

Nelson Fonseca Leite

Thank you !