Energy efficiency obligation

In 1998, Brazil defined energy efficiency obligations for electricity distribution companies under the EEP (Energy Efficiency Programme). The obligations is mandatory for companies with a market share greater than 1000 GWh/year, and will be extended to companies with a market share between 500 GWh -1000 GWh/year from 1 January 2023. The EEP establishes spending targets: When the EEP was established, it required that at least 1 percent of annual net operating revenues to be spent on a combination of research and development (at least 0.75%) and end-use energy efficiency programmes (at least 0.25%). Legislation enacted in 2015 continues the level of 1 percent of annual net operating revenues to to to energy efficiency and research and development programmes until 31 December 2022. From 1 January 2023, companies with a market share between 500 GWh -1000 GWh / year will have an obligation to spend between 0.25% and 0.5% of net operating revenues on end-use energy efficiency programmes. The following conditions apply: Obligated distribution companies must allocate 20% of the budget for energy efficiency programmes to the PROCEL programme, with the remaining 80% to be allocated by the distribution companies themselves. Obligated distribution companies must allocate at least 60% of revenues applied to energy efficiency programmes to programmes for low-income or rural consumers, and may apply up to 80% of revenues to such programmes. The Brazilian Regulator, ANEEL, oversees the EEP and applies penalties in the case of non-compliance.

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