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In the reference scenario of the new Ten-Year Energy Expansion Plan (PDE 2034) of the Energy Research Company (EPE), the segment would attract 116.6 billion reais (21.2 billion dollars) in the next 10 years, with rates increasing internal returns. Considering the lower and upper scenarios of the study, the accumulated capacity could range between 46.9 GW and 70.5 GW in 2034. Distributed generation was already the main source of expansion of electricity generation in Brazil in 2023 and represented more than 8% of consumption in the captive market.
In the Distributed Micro and Minigeneration Notebook (MMGD), part of the studies for the new Ten-Year Energy Expansion Plan (PDE 2034), the Energy Research Company (EPE) estimated that micro and minigeneration should accumulate between 47 GW and 71 GW in 2034, depending on the scenario. In the reference scenario, the EPE projects 59 GW installed until 2034, which will serve more than 7 million consumer units and R$116.6 billion in investments between 2024 and 2034.
The reference scenario for grid expansion considers that distributed generation (DG) systems will be charged 100% of the transmission system user fees (TUSD) starting in 2029, in accordance with the provisions of Law 14,300. This implies that around 50% of other tariff costs, such as fees, transmission rates, losses and others, will continue to be discounted through distributed generation credits. In this scenario, São Paulo would concentrate 10.9 GW
In the upper scenario, which simulates an energy compensation starting in 2029 equal to the entire tariff, as was the original 1 to 1 compensation, 70 GW are accumulated, with almost R$ 50 billion more in additional investments than in the base case of the study.
In the lower scenario, which simulates compensation starting in 2029 only for the part corresponding to TE Energia, investments would be 70 billion reais in the same period, with a total of 46.9 GW.
Rising internal rates of return
Considering the reference scenario, the trend is for the internal rate of return of the projects to grow, especially for low voltage commercial consumers, with a real Internal Rate of Return (IRR) above 40% in the median of the projections. The worst rates would correspond to commercial consumers in remote generation, outside the consumption unit:
Current scenario and trends: SP dominates among the states and residential continues to lead.
Currently, DG accumulates 30 GW of installed capacity in Brazil and serves about 8.5% of national captive consumption, reaching almost 20% in some Brazilian distributors, according to the EPE. In 2023, for the third year in a row, distributed solar outpaced the expansion of all other sources in terms of installed capacity, with 8 GW connected, followed by 4.9 GW of wind and 4 GW of centralized solar plants.
Of the 30 GW currently in operation, a third is concentrated in ten states. São Paulo, currently with 4 GW, should extend its lead to 10.9 GW in 2034 in EPEs reference scenario. Minas Gerais, which has been taking turns at the top of the list of states with the most accumulated capacity, should reach 5.7 GW in the same period, compared to the current 3.9 GW.
Residential systems are expected to continue to lead the market, with more than 22 GW of capacity expected by 2034, up from around 14 GW today. Low-voltage commercial consumers are expected to accumulate an installed capacity of more than 17 GW, up from 8 GW today.
The Ten-Year Energy Expansion Plan (PDE) 2034 presents the expansion prospects of the energy sector for the next 10 years, considering the period from 2025 to 2034, maintaining an integrated vision of the various energy sources. The studies that make up the plan, published in thematic notebooks, subsidize energy policy decisions.
In the notebook, the EPE points out that the possibility of gradually opening the free market to all segments creates uncertainty about the future of distributed generation, since consumers will have the opportunity to choose electricity suppliers other than the distributor, with the possibility to contract personalized plans and possibly with savings. “In this context, distributed generation now has a competitor, since currently free consumers cannot be part of the energy compensation system,” states the EPE. |
