In an unprecedented scenario, energy generated by micro and mini distributed generation (MMGD) may soon have its accounting recognized by the CCEE, with significant impacts for the electricity sector.
Brazil’s electricity sector is undergoing a profound transformation, driven by the remarkable growth of micro and mini distributed generation (MMGD). During peak solar generation hours, for example, local production has surpassed the consumption demanded by distributors in their concession areas, even supplying a portion of free consumers.
This new reality, however, has brought a regulatory and financial challenge: the surplus energy generated by MMGD is not properly accounted for under the current rules of the Electric Energy Commercialization Chamber (CCEE). This accounting omission directly impacts the financial settlement of distributors in the energy market and distorts important calculations, such as the determination of losses in the Basic Network, which can appear artificially reduced or even negative.
Faced with this situation, the CCEE sought an update to the Commercialization Rules from the National Electric Energy Agency (Aneel) so that this surplus energy is duly recognized. The proposal received important legal approval from the Federal Prosecutor’s Office at Aneel, which considered the possibility of representing and settling this surplus in the CCEE’s Short-Term Market (MCP). The scope and details of this new regulation, however, are yet to be defined by the agency.
The Challenge of Accounting for Energy Surplus
The issue arises from the combination of MMGD’s advancement and the increasing migration of consumers to the Free Contracting Environment (ACL). This dynamic has altered the consumption profile of distributors, leading to situations where local distributed generation exceeds the demand from the regulated market. The accounting distortion occurs when the volume of energy injected by MMGD significantly reduces the distributor’s need to receive energy from the Basic Network, making the balance negative in relation to the consumption of free customers in the same area.
Imagine a distributor that receives 300 MWh from the grid and has free consumers consuming 400 MWh. Under current rules, the accounting difference for the regulated market would be -100 MWh. This value does not indicate negative consumption, but rather that MMGD met all regulated market demand and still supplied part of the free consumption. The CCEE system, however, ignores this negative load, considering it as zero. Consequently, the 100 MWh of solar energy that are physically serving consumers are no longer registered in the distributor’s energy balance.
Impacts and Solutions Under Debate
This accounting omission generates a cascade of adverse effects. The artificial reduction of losses in the Basic Network is just one of them. There are also repercussions on the accounting of sector charges, hydrological risk, energy sales revenue, exports, and other crucial indicators for the sector’s operation. The first occurrences of negative losses recorded in mid-2025 illustrate the urgency of the problem, which is spreading throughout the system.
The Federal Prosecutor’s Office identified that the accounting representation of this surplus, as a negative component of the net load, does not conflict with the laws governing the electricity sector. The legal analysis indicates that the surplus can be settled in the MCP, with the distributor acting as the representative for the regulated market and the Electric Energy Compensation System (SCEE). It is crucial, however, that this accounting treatment does not harm the credit rights of consumer-generators.
The Aneel now faces the task of defining the contours of this new regulation. Two main approaches were considered by the Prosecutor’s Office: a restricted one, focused on MCP settlement and loss correction, and a comprehensive one, which would consider the surplus as a reduction of the distributor’s total consumption, with potential impacts on tariffs and charges. The broader approach, although legally possible, requires an in-depth regulatory impact analysis (AIR) and public consultation, given its implications for various market mechanisms.
The expectation is that the future regulation will not only correct distortions but also promote greater efficiency and neutrality in the energy market, in addition to considering tariff moderation. The valuation of this MMGD surplus may even mitigate economic disparities between injected and compensated energy, representing an important step towards a fairer electricity sector adapted to the new realities of distributed generation.
