TCU validates agreement between government and Ámbar on emergency thermal plants amid drought

The Federal Court of Auditors (TCU) validated this Wednesday (9) an agreement signed between the Ministry of Mines and Energy and Âmbar Energia to resolve an impasse related to the emergency contracting of thermoelectric plants in 2021, pointing out the advantages of maintaining the contract of one of the projects to face the severe drought experienced by the country this year.

As part of this process, the plenary of the control body dismissed a representation from the Public Prosecutor’s Office to the TCU (MP-TCU) that had pointed out possible irregularities in the maintenance of contracts for emergency plants at Âmbar, controlled by the J&F holding company, owned by the Batista brothers.

The Union and Âmbar reached an agreement in May to resolve the situation of the energy generator’s plants that won an emergency auction held by the government in 2021, when Brazil was facing risks of rationing and blackouts, but which did not come into operation within the stipulated deadlines. , breaching contracts.

This agreement had its validity postponed after being questioned by some agents in the electricity sector, such as entities that represent energy consumers. The assessment was that the company would be benefiting, since even having failed to comply with the auction rules, it would still maintain its contracts and receive billions in revenue.

Under the agreement, Âmbar will pay around R$1 billion in fines for non-compliance with contract deadlines, but will also receive R$10.5 billion in revenue from thermoelectric generation — compared to R$18.7 billion stipulated at the time of contracting.

But the worsening of hydrological conditions in recent months, with a severe drought damaging hydroelectric generation and increasing costs for energy consumers, changed the game and changed the understanding of this case.

Now, Brazil began to need a larger set of thermoelectric plants in operation, so that Âmbar’s Cuiabá thermoelectric plant began to be seen as important for the operation of the electrical system until the end of the year.

In the agreement reached with the government, Âmbar would begin to fulfill the 2021 emergency auction contracts not through the projects tendered at the time, but through the Cuiabá thermoelectric plant, a 529.2 MW plant powered by natural gas.

It will be dispatched if the National Electric System Operator (ONS) identifies a need, without an inflexible contract as previously foreseen, which would require uninterrupted generation.

“If the dry period continues…, the contract with Âmbar (and other thermal plants contracted in the PCS) may become undoubtedly advantageous, or even indispensable, considering that there will be a need for power (or energy)”, says the ruling from the rapporteur of the process at TCU, minister Benjamin Zymler.

Zymler also pointed out that, according to TCU analyses, it would be more advantageous for energy consumers for the plant to operate under a contract, and not as a “merchant” (uncontracted), since in the latter modality it would tend to have higher generation costs. .

The unit variable cost (CVU) of the Cuiabá thermoelectric plant, contracted, would be 1,166.91 reais per megawatt-hour (MWh), according to a calculation by the CCEE Electric Energy Commercialization Chamber.

This value is “much lower” than the cost that would be paid in the potential need to purchase energy from “merchant plants”, estimated at R$ 2,734.39 per MWh, says the ruling.

In a statement, Âmbar stated that this Wednesday’s TCU decision “guarantees the country’s legal and energy security, avoiding the judicialization of the issue and adding power to the national electrical system at a critical moment with the low levels of hydroelectric reservoirs” .

According to the company, approval by the court of accounts removes any question regarding the agreement and guarantees “significant benefits” for the consumer in relation to the original contract to which Âmbar was entitled.