The Brazilian Federal Government publishes decree for wind power offshore energy generation
On January 25th, 2022, the Brazilian Presidential Decree no 10.946/2022 was published, setting rules for the use of physical spaces and natural resources to generate wind power at inland waters, territorial sea, the exclusive economic zone and continental shelf.
We highlight below the main topics of the decree:
Assigment of usage - assignment of right to use the name of the contract to be executed by interested parties and the Brazilian Federal Government, for a fixed time-period, in which the right to use offshore areas for the following activities is granted:
- technical research and development related to energy public services; or
- economic exploration of power generation.
The offshore areas will be granted in “vertical prisms” (the “prisms”), encompassing certain geographical area, as well as the air and water space above and below it, as required for the corresponding enterprise.
Relevant authorities - the competence to grant the rights/authorizations of usage is divided in two authorities.
The Ministry of Mines and Energy (MME) will be responsible for granting the transfer of usage, provided that the corresponding area is previously made available by Ministry of Economy, through its Secretariat for Coordination and Governance of the Federal Government Assets.
Procedure - the contract for assignment of usage may be granted in planned cession procedures, which are recurring bidding procedures for offer of areas previously delimited by the MME, or by an independent assignment, involving prisms that were not included in the planned cession bids.
- Assignment of usage shall be preceded by a Declaration of Previous Interference (Declaração de Interferência Prévia – DIP), which confirms the existence (or the lack of) interference of the prims with other existing enterprises or activities (such as maritime and aerial navigation).
- The DIP, yet to be regulated, shall be requested by the interested party before the following authorities:
- Commander of the Brazilian Air Force;
- Brazilian Institute of Environment and Renewable Natural Resources (Ibama)
- Chico Mendes Institute for Biodiversity Conservation (ICMBio);
- Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP);
- Ministry of Infrastructure (MInfra);
- Ministry of Agriculture, Livestock, and Food Supply (Mapa);
- Ministry of Tourism (MTur); and
- National Agency of Telecommunications (Anatel).
* The MME will further regulate the issuance of DIPs, including the timeline for its issuance by the public authorities.
Planned cession - recurring bidding procedures of prisms previously selected by the MME. Definition of the area prisms and the corresponding bid will be preceded by:
- opinion by the Brazilian Electricity Regulatory Agency (ANEEL) and the Brazilian Energy Research Company (Empresa de Pesquisa Energética – EPE);
- DIPs shall be requested by the entity indicated by the Ministry of Mines and Energy to conduct the bid; and
- MME may perform public hearings at its own discretion, to verify interest for prisms.
Independent cession - cession of prisms not included in the Planned Cessions but which interest upon is expressed by interested parties, through request to the MME The corresponding contract will indicate the scope of the assignment of usage and the geographical limitations of the prism.
- The MME will verify if the requested prism supersedes prisms previously assigned or requested. If there is overlap, the “new” applicant party shall adjust its request in 90 days, to remove the areas with overlap.
- If there is no overlap of areas, interested party is allowed to request the DIPs before relevant authorities.
- Although not being expressly indicated in the decree, the MME informed that, once a prism receives any expression of interest, it shall be included in a future bid.
Assignment of usage contracts - certain mandatory clauses were established by the decree:
- assignment of usage contract for offshore wind power generation shall impose performance of studies about the energy potential of the prism; and
- assignment of usage for offshore wind power generation may be subject to payment.
Rules for the sale of energy - energy generated by the relevant projects shall comply with the rules for energy trading provided for by Brazilian Federal Law no 10,848/2004 and other applicable law. If the power is to be generated in the self-supply regime, without connection to the national power grid, the rules of Decree no 5163/2004 shall apply.
The Infrastructure & Projects and the Oil, Gas & Offshore teams are available in case of doubts.