Congress gives in to interests and throws cost on the electricity bill, says Luiz Barata

Engineer Luiz Eduardo Barata is one of the most experienced professionals still active in the electric energy sector. He began his career in Furnas in 1975 and worked for the largest organizations in the area.

This Wednesday (10), he assumes the presidency of a new body, the National Front of Energy Consumers, which brings together the largest entities in this area. The front will act in what it considers a new focus that generates increases in the cost of energy in Brazil, political power.

When he looks back, Barata says that the recent role played by politicians in the energy sector, especially members of the National Congress, has deteriorated the environment for making technical decisions, one of the pillars of the sector.

According to Barata, sensitive to interest groups, deputies and senators use the instrument of amendments to benefit companies and sectors, throwing costs, many of them billionaires, for the energy consumer to pay.

“Consumers are participating in this market as mere payers of the bill, without taking a leading role in the discussions”, says Barata. “We want space to get there and say ‘this is bad’.”

They are part of the Conacen (National Council of Electric Energy Consumers) front; Idec (Brazilian Institute for Consumer Protection); Instituto Clima e Sociedade (iCS); ClimaInfo Institute; Polis Institute; Abrace (Association of Large Industrial Energy Consumers and Free Consumers); Anace (National Association of Energy Consumers); and Abividro (Brazilian Association of Glass Industries).

What is the environment that leads to the creation of a front in defense of the energy consumer? The history of the energy sector is even positive, but the moment is very bad. Until the 1990s, with the major reform of the government of Fernando Henrique Cardoso, there were two major groups of influence in the area, generators and distributors. The sector was very hermetic and handled only by its technicians.

Since then, a profound change has taken place. Thermal plants came in and then new renewables. With distributed generation and the free energy market, the consumer segment has diversified. Numerous sectoral entities were created. The specialized media also entered.

Recently, what I call the third agent, political power, has entered. In my understanding, in a democracy, political power even has the last word in the creation of laws, but based on technical and economic evaluations, which we are not seeing.

Could you explain better? Interest groups in the energy area, companies and also sectors of the electricity industry, when they are not served by regulatory bodies or the Executive, began to put pressure on politicians. Thus, important changes began to be made via parliamentary amendments.

It is the process that we live today. In the absence of technical or economic criteria, Congress gives in to interest groups and passes laws that are harmful to the energy sector.

Harmful in what sense? Increase your electricity bill. This front that we are proposing does not come by chance, but from the realization of this environment. Congress should be defending the citizen, but that is not what we are seeing in the decisions that it has taken.

Consumers are participating in this market as mere payers of the bill, without taking a leading role in the discussions. But we don’t want to be exclusively bill-payers. We want space to get there is to say ‘this is bad’.

Can you give examples of financial losses for the consumer? One is the auction result called PCS [Procedimento Competitivo Simplificado], which was in October last year. A few thousand megawatts on average were contracted for three and a half years, at a cost of R$ 39 billion.

There was also the process of converting Eletrobras’ provisional capitalization measure, which resulted in the approval of a series of amendments, called tortoises. It’s scandalous. It determined the contracting of 8 gigawatts of gas-fired thermal plants in regions where we do not have gas or consumption, and many other measures, without the slightest technical or economic support.

But how to reverse this, since he needs to change the law in Congress, and he did it himself? There really is a law passed, and we don’t want to disrespect laws. But we understand that Congress made a wrong law. When this happens, the law can be revised by the Legislative Power itself. So, let’s show parliamentarians how harmful it is for Brazil’s energy consumer to keep these 8 megawatts of gas-fired thermal plants the way they did.

Let me explain one thing. Our matrix is ​​a gift from nature. We have rivers that allowed hydroelectric plants, winds for wind power, sun for photovoltaic energy and plant residues for the use of biomass. We have everything for our energy to be clean and cheap, and yet we insist on hiring more expensive energy. We have to change that.

Furthermore, let’s question the subsidies on the electricity bill.

I’m not talking about the low-income social tariff. I’m talking about the agribusiness subsidy. I’m talking about the absurdity that has become the CDE [Conta de Desenvolvimento Energético]. It was a good idea in 2002 when it was approved. But for this year he needed more than R$ 30 billion. It does not give.

The third element responsible for increasing the electricity bill is taxation. It started to be attacked with the ICMS limitation, but the problem is much bigger and needs to be debated in a scope that goes beyond the energy area.

This and all other governments are investing heavily in thermals. What do you think about this? Some include me in the group of those who oppose the use of thermals. I’m not against. There is space, but for gas thermal plants called flexible [que possam ser ligadas quando necessário e deligadas depois]. I don’t think there is any for inflexible thermals [que ficam ligadas o tempo todo].

The point is that they want to expand the gas program in Brazil using inflexible thermal plants.

The use of gas for industry is absolutely welcome. But it is unreasonable for the electric power sector to be used to subsidize the expansion of the gas sector. Why are we going to have that contradiction there: pouring water into reservoirs with thermals on. This, in essence, is a type of subsidy.

Let’s exemplify using the case of Eletrobras’ 8 gigawatts of tortoises.

Those thermals will stay in a place that doesn’t have gas. To put gas in these thermal plants, you need to build gas pipelines. In other words, this project has two stages. In the first, put thermal where there is no gas. And then there’s the second one, building the gas pipeline to take the gas to these thermal plants. And who will pay? The electricity sector. It’s not reasonable. Electricity consumers are subsidizing the gas sector.

You see, you don’t build a wind farm where there’s no wind. Do not put solar panels where there is no sun. You don’t have to put gas thermal where there’s no gas.

Parts of the recent crises occurred because we came from two years of droughts. How is the electric power sector considering climate change in planning? It is being overlooked. There are many people in the sector who resist believing in climate change, despite the fact that they are visible in the world, not just in Brazil.

Now, to solve the crises we are experiencing with droughts, you don’t need inflexible thermal. And we also don’t need thermal plants to save water in the reservoir. We can use solar and wind.

The other thing we need to discuss is the regulatory framework, which has run out.

Exhausted in what sense? In 1998, the sectorial framework changed completely. It became mercantile. In 2000 and 2001, rationing came, and a series of adjustments was made to this model. In 2004, when Dilma Rousseff was Minister of Mines and Energy in Lula’s government, a mini-reform took place. What was done in this period is practically valid until today.

Legislation needs to keep up with what we are experiencing. And we don’t have ready answers. When you live in a transformative period like the current one, you can adopt two positions that are absolutely antagonistic. Study the changes so as not to be shaken. Or resist, believing that they will not occur.

X-RAY
Luiz Eduardo Barata Ferreira, 69

Electrical engineer, from the Faculty of Engineering of the Universidade do Estado da Guanabara, he has a postgraduate degree and an MBA in the area from COPPE/UFRJ. He started working in the sector in 1975, in Furnas, passing through Itaipu and Eletrobras, where he became a member of the board of directors. He was superintendent and chairman of the board of directors of the CCEE (Chamber of Electric Energy Commercialization), executive secretary of the MME (Ministry of Mines and Energy) and general director of the ONS (National Electric System Operator)