ANEEL publishes rule on use of land around Basic Grid substations

On January 03, 2023, ANEEL Normative Resolution No. 1,055/2022 (“REN 1,055/2022”) was published, which amended ANEEL Normative Resolutions No. 876/2020 (“REN 876/2020”) and No. 905/2020 (“REN 905/2020”).

The amendments seek to establish the regulatory treatment associated with the “isolation of Basic Grid substations” by generation facilities and the impacts on the expansion and access to substations. Sections 1 and 3 of the Electricity Transmission Rules (annexes to ANEEL Normative Resolution No. 1,052/2022) were also revised to adapt to the new provisions.

REN 1,055/2022 will only enter into force on April 01, 2023.

As a result of Public Consultation No. 021/2022, the improvement of the regulatory treatment associated with the isolation of substations of the Basic Grid was included in the Regulatory Agenda 2022-2023, approved by ANEEL through ANEEL Ordinance No. 6.705/2021.

REN 1,055/2022 aims to solve the problem related to the accelerated expansion of photovoltaic generation plants that, in seeking for the lowest energy transportation cost to reach their connection point, have “surrounded” substations of the Basic Grid, consequently obstructing their expansion or the introduction of new planned transmission lines. REN 1,055/2022 proposes to regulate this matter and prevent that the obstruction of substations impede the implementation of new transmission lines, lines of interest to users, and the expansion of existing busbars, thus ensuring free access to the Basic Grid. 

The rule outlines the Substation Development Area (“ADS”), which corresponds to a circle with a radius of 2 kilometers, counted from the geometric center of transmission substations that are part of the Basic Grid (including those that result from sectioning) or Other Transmission Facilities (“DIT”), in which the construction of power plants is prohibited.

The ADS must be respected throughout the construction of both power plants and substations integrated to the Basic Grid and DIT, and the ADS is established at the moment that these projects obtain a Declaration of Public Utility (“DUP”) or Preliminary Environmental License[1]. The rules regarding the ADS do not apply to generation plants under construction, or plants that have signed a Contract for the Usage of Transmission System (“CUST”) before the regulation enters into force.

Substations of the Basic Grid or DIT with connected Hydroelectric Power Plants (“HPP”) or Small Hydroelectric Plants (“SHP”) are exempt from complying with ADS, provided that the plant’s geometric center is located less than five kilometers from the edge of the reservoir or powerhouse of the plant, due to restrictions inherent to the nature of such projects, which must respect the optimal use of the hydroelectric potential, according to the approved inventory study.[1]

Regarding the procedures for the issuance of authorization grants for generation plants (except for HPPs and SHPs), a requirement was included (item 3a of Annex II of REN 876/2020), to be fulfilled by the business owner. Such requirement refers to the submission of a statement recognizing that the implementation of generation plants in the ADS is prohibited, as well as a new statement to be submitted at the time the Declaration for Operating Tests (“DAPR-T”) of generating units is requested. In case of plants that have submitted the authorization grant request before REN 1.055/2022 entered into force, the statement must be submitted upon execution of the Transmission Facilities Connection Agreement (“CCT”) and also upon requesting the DAPR-T.

The CCT or the Infrastructure Sharing Contract (“CCI”) can only be executed after the layout of the transmission lines of restricted interest inside the ADS are approved by the accessed transmission companies (in case of the CCT) or by the connected transmission companies (in case of the CCI). The National Electric System Operator (“ONS”) must settle conflicts associated with the approval of transmission line routes within ADSs.

Demarest’s Energy and Natural Resources team is available to provide any clarifications that may be necessary within the scope of REN 1,055/2022 and other topics.

Read in full – Normative Resolution

See the vote

[1] Or an equivalent document.
[2] According to Article 5 of Law No. 9,074/1995