Projects

General government authorisation

What government authorisations must investors or owners obtain prior to constructing or directly or indirectly transferring or acquiring a renewable energy project?

See question 4.

Also, ANEEL’s prior approval may be required for corporate transactions involving the transfer of renewable energy projects, as described below:

  • if the acquisition of a renewable energy project involves the transfer of assets (therefore the transfer of the licence itself), ANEEL’s prior approval will be required;
  • if the acquisition involves a direct or indirect transfer of majority control of renewable energy projects from solar, wind farms or biomass sources, ANEEL shall only be notified within 30 days after the completion of the transaction; however, no previous approval of the regulatory agency is required in accordance with ANEEL’s Normative Resolution No. 484/2012 (REN No. 484/2012); and
  • if the acquisition involves a direct or indirect transfer of majority control of hydropower projects (including PCH projects), ANEEL’s prior approval shall be required, in accordance with REN No. 484/2012.
Offtake arrangements

What type of offtake arrangements are available and typically used for utility-scale renewables projects?

See question 4.

Procurement of offtaker agreements

How are long-term power purchase agreements procured by the offtakers in your jurisdiction? Are they the subject of feed-in tariffs, the subject of multi-project competitive tenders, or are they typically developed through the submission of unsolicited tenders?

In the ACR, the PPA is a result of public energy auctions, in which the winning bidders (power producers) and the distribution companies execute a predetermined PPA (part of the tender documentation), denominated CCEAR or CER. The CCEAR term depends on the auction (usually the supply period is 15 or 20 years), and the revenue structure is associated with the type of power generation, such as wind farms, solar or thermoelectric power plants. Usually, the revenues are divided into fixed and variable instalments calculated monthly according to the amount of energy delivered to the distribution concessionaire. In the ACL, the PPAs are freely negotiated by the parties. Since the sector players have been facing severe competition within ACR auctions, entrepreneurs are driving their attention to the development of new projects exclusively or partially based in long-term power purchase agreements executed in the ACL.

Operational authorisation

What government authorisations are required to operate a renewable energy project and sell electricity from renewable energy projects?

See question 4.

Also, pursuant to Brazilian environmental laws and regulations, the location, construction, installation, expansion, modification and operation of activities or projects that cause or may cause any environmental degradation or that use natural resources are subject to environmental licensing requirements - and this rule includes the majority of power projects in Brazil (regardless of whether these projects are related to renewable energy or not). Environmental licences are valid for a specific period and their renewal must be requested in good time. Other environmental authorisations, such as vegetation removal and impoundment of water grants, may be also applicable to power projects.

Decommissioning

Are there legal requirements for the decommissioning of renewable energy projects? Must these requirements be funded by a sinking fund or through other credit enhancements during the operational phase of a renewable energy project?

There are no specific regulatory requirements for the decommissioning of renewable energy projects in the operational phase. However, if the project is decommissioned during the licence term, penalties shall be applied by ANEEL and CCEE to assure the adequate performance of the power generators and the impacts of such performance on the system.

The decommissioning of renewable energy projects shall naturally occur when the licence’s termination date is reached. Such decommissioning shall not be understood as a penalty for infringing legal requirements.