Brazil: Lei 14.300 sets order in distributed generation, and the Fio B charge rises gradually until 2028

Since January 2022 Brazil has had a framework act for distributed generation: Lei 14.300, signed on 6 January and published on 7 January 2022 in the Diário Oficial da União. It regulates the settlement of energy fed into the grid by small installations, including biogas ones, and introduces charges for use of the distribution network that will rise in stages.

What the act regulates

Before 2022 the rules for settling micro- and mini-generation derived from a resolution of the regulator ANEEL (Resolução Normativa 482). Lei 14.300 raises them to the rank of statute and retains the energy compensation system, while introducing charges for use of the grid: the generator feeds surplus into the grid, and the distributor credits it against the generator's consumption. Micro-generation means installations of up to 75 kW, and mini-generation covers larger installations: up to 5 MW for dispatchable sources (despacháveis) and up to 3 MW for non-dispatchable ones (e.g. photovoltaics without energy storage).

Such a framework is important for farmers and processors who want to generate energy from biogas for their own needs or to report it for settlement at another location. In Brazil biogas from manure and from waste from sugar mills and distilleries is still a significant potential, as we write in the texts on RenovaBio and on vinasse from sugar mills.

Transition period and Fio B

According to press commentary, the rules from resolution 482 remain in force until 2045 for installations already operating and for applications submitted within 12 months of the act's publication. Anyone who applies for grid access later will start paying the TUSD Fio B component, i.e. part of the charge for use of the distribution network. The charge is to be introduced gradually; market studies give the following path:

The act also requires the CNPE (National Energy Policy Council) and ANEEL to define, within 18 months, the rules for valuing the costs and benefits of distributed generation, which will apply after the transition period.

Vetoes

The president vetoed two provisions: the first allowed micro- and mini-generation to be counted towards energy infrastructure projects under the Reidi programme and similar ones, and the second permitted floating power plants on reservoirs to be split into smaller units so that they fit within the limits of distributed generation.

Conclusions for biogas

From the perspective of a biogas plant, 2022 means a stable legal framework, but also the end of free use of the grid for new projects. A generator should calculate what share of the energy will be used on site and what share fed into the grid, because the impact of the Fio B charge on profitability depends precisely on that. For comparison with support systems in other countries, see also the entries on tariffs and certificates in the law category.