Self-production as an ally to the energy transition
The self-production of energy has expanded significantly in Brazil, especially among large energy consumers, such as industries from different segments. Since 2019, companies began to feel the need to adapt their contracts to meet the energy transition, seeking alternatives that were not limited only to the sale of energy through PPAs (Power Purchase Agreements) and that brought greater autonomy, efficiency, and predictability in electricity bill costs.
What is self-production of energy?
Part of the Free Contracting Environment (ACL), self-production can occur in two ways: the first and best known is when generation and consumption are in the same place, being quite common in isolated systems and/or by the use of by-products of the industrial process for energy purposes. Remote self-production, the second form of the modality, is when generation and consumption take place in different places. In this case, the use of transmission and distribution networks is necessary.
The consumer can also choose different business models. In traditional energy self-production, large industries invest 100% in the generation asset, having full control of the management and operation of the project, in addition to bearing all the risks involved in the asset. The lease model, which can be done directly or through a consortium, is an option for consumers who do not fit the necessary requirements for the equivalence model or who do not have the ability and/or interest to invest in the construction of their own energy system.
The last and most widespread in the market today is the model by equivalence, which allows the consumer to be part of a Special Purpose Company (SPE) – a legal entity with the sole purpose of executing a certain project or developing a specific project – and acquire shares with voting rights. The energy generated for consumption must be sold based on an energy purchase and sale agreement, the so-called Power Purchase Agreement (PPA), which specifies the portion of energy allocated to each partner.
Self-production and the energy transition
The choice of self-production by large electricity consumers reflects the transition to clean and sustainable sources, as well as the growing awareness of the economic and environmental benefits of this contracting model.
The sector’s expectation is that investments in renewable energy will continue to grow, driving economic development and especially the transition to a decarbonized and even more sustainable energy future in Brazil.
EDF Renewables and self-production
EDF Renewables has self-production contracts by equivalence, a model that meets the growing demand of consumers for more sustainable energy solutions with predictability of costs. The company is committed to the expansion and implementation of new projects, with a focus on enabling self-production solutions for its customers.
With its international expertise, the company is able to offer tailor-made solutions for different businesses, linking strict environmental and social criteria, including transparent communication with local communities and collaboration with regulatory bodies to ensure that environmental impacts are minimized.
To learn more about the solutions offered by EDF Renewables for the Free Energy Market, click here.
