The Federal Government enacted the legal framework for distributed microgeneration and mini-generation, aimed at providing legal security and predictability to the fast-growing small-scale generation schemes.

The Federal Government sanctioned Law n.º 14.300/2022, establishing the legal framework for distributed microgeneration and mini-generation, i.e., small-scale generation units at or near end-consumer installations that are connected to a distribution network, reaching up to 75 kW in output capacity for microgeneration, and ranging between 75 kW to 3-to-5 MW for mini-generation. The distributed generation must originate from renewable sources (e.g., photovoltaic) or be acquired through “qualified cogeneration” under specific conditions (definitions are provided in article 1).

The main goal of the new framework is to provide legal security and predictability since rules for the small-scale distributed generation were already provided, but only in the form of a regulation – Normative Resolution n.º 482/2012 from the Brazilian Electricity Regulatory Agency (ANEEL). Chapters “II” and “III” provided conditions for the establishment of microgeneration and mini-generation.

Additionally, the legal framework provided rules for the Electrical Energy Compensation System (SCEE, in the Portuguese acronym), through which electricity-generating end-consumers may be compensated for their generation (Chapter “IV”). Through the SCEE, excess generation may be compensated in the form of electricity credits and may be distributed to other consumer units from the same consumer-generator (article 12).

Furthermore, the law determined that the distributed microgeneration and mini-generation will be subject to distribution tariff rules (e.g., tariffs that cover operational costs and physical assets of distributors), according to specific provisions. Specific transition periods for the application of such rules were enacted.

According to the Ministry of Mines and Energy, distributed generation in Brazil surpassed 8.5 GW in operating capacity by the end of 2021, representing nearly 5% of the national capacity, and grew 316% in the last two years.