G7 Leaders Vow to Help Countries Hit by Energy Leap

Insight Focus

G7 leaders offer help for countries to cut energy imports from Russia.
Spain and France have agreed on energy market intervention to cap price rises.
Shutdown of pipeline to Russia from Kazakhstan for repairs sparks oil price rebound.

An impasse that began in December 2021 apparently ended when the Superior Court of Justice (STJ) granted the Union’s requests and overturned the injunctions of seven of the 17 thermoelectric plants that won the capacity reserve auction despite having the Unit Variable Cost (CVU) higher than the public notice ceiling of R$ 600/MWh. Will there be an appeal?

At the National Electric Energy Agency (Aneel), another chapter opened in the debate about the security of the free energy market, with the recommendation that a public consultation be opened to improve the monitoring processes and financial safeguards of the electric energy market. Under the proposal, a prior regulatory impact analysis will not be required.

There was also news about the so-called Linhão do Tucuruí. TNE again asked for an increase in allowable annual revenue (RAP), but was denied the appeal and a determination to follow the compromise worked out during an arbitration process.

But not every delay is permanent. With a delay of seven years, Renova Energia finally started the operation of Alto Sertão III, in Bahia.

And speaking of what was left behind, this seems to be the case with the water crisis. In March, thermal generation and imports from the National Interconnected System (SIN) reached their lowest since September 2021, reaching 6,573 MW on average. The load also grew again and should close f March with growth of 1.5% in the National Interconnected System.

Still talking about Brazil, many companies published their results for the 4th quarter of 2021. The week started with Eletrobras, which saw a 52% drop in its profit due to provisions related to the delinquency of Amazonas Energia and liabilities of Santo Antonio Energia , in which it holds equity interest through Furnas.

Vibra Energia, which has just closed the purchase of a stake in Grupo Comerc – of which MegaWhat is a part -, took advantage of the release of its results to raise an alert for the effects of the war between Ukraine and Russia on the fuel distribution market. . The company gave an assurance that, although the derivatives import market is “tight”, there has been no shortage of supplies, and all contracted cargoes were arriving in the country.

The week also featured the results of state-owned company Copel, which ended 2021 with almost R$4 billion in cash and is looking for investment opportunities in the market, and Eneva, which has just completed the purchase of Focus Energia and plans to expand its portfolio by through participation in new energy auctions. Equatorial also recently made an acquisition, which is waiting for the best time to explore Echoenergia’s portfolio.

Energisa also brought news, and announced major investments in the group’s unregulated businesses, including distributed generation, renewable generation for the free market, energy trading and value-added services.

What Else Stood Out This Week?

In the international context, conflicts in Eastern Europe continue to make headlines and dictate increases in the price of oil on the international market: