Bill of Law No. 576 of 2021 approved by the Senate and Ordinances regarding offshore energy generation available for public consultation

In brief

On 29 August 2022, the Federal Senate approved Bill of Law No. 576 of 2021 (“Bill No.576/2021“), which regulates the exploitation of federal assets for energy generation in offshore projects.
Additionally, Ordinance No. 685/GM/MME and Ordinance No. 686/GM/MME (“Ordinances“) are currently available for public consultation. Issued by the Ministry of Mines and Energy, the Ordinances establish rules and procedures regarding offshore energy generation. The Ordinances’ main objective is to create a system to manage the areas designated for this type of energy generation, as well as to establish guidelines for the assignment of usage of these areas.

More details

Bill No. 576/2021 foresees that there will be two different types of mandatory governmental participation in offshore projects: (i) signing bonus, which corresponds to the payment offered by the interested party to obtain the grant; and (ii) proportional participation, equivalent to a type of royalty that must be paid monthly, in an amount no less than 1.5% of the energy effectively generated and commercialized.

The signing bonus amount must only be paid to the Federal Government, while the proportional participation must be divided among the federative entities, as set forth in Article 14 of Bill No. 576/2021.

The right of use of the federal assets for offshore energy generation, through either planned assignment or independent assignment, was also regulated by Bill No. 576/2021.

• Independent assignment (manifestation of the interested party in the exploration of a certain energy prism): The granting authority will, after receiving the proposal for exploration of a certain energy prism, open a public call for 30 days to identify other interested parties. If there is only one interested party, the granting authority may grant the authorization. If there is more than one interested party, the granting authority may seek an agreement between the interested parties or redefine the exploitation area.

• Planned assignment (the granting authority offers energy prisms): The granting authority will conduct appropriate environmental studies to define the exploitation area and will observe the applicable environmental programs. After these studies, an auction RFP will be published and those interested in participating must comply with the requirements foreseen in the auction RFP.

Bill No. 576/2021 also determines that the following points must be established in a specific regulation: (a) the prior locational definition of the sectors in which the exploitation areas may be defined, based on suggestions from interested parties or by delimitation from the responsible agency; (b) the procedure for the presentation of suggestions of exploitation areas by interested parties; (c) the procedure for requesting the Declaration of Previous Interference (DIP); and (d) requirements for qualification of interested parties.

As such, the focus of Ordinance No. 686/GM/MME is to create the Single Portal for the Usage Management of Offshore Areas to Energy Generation, the PUG-offshore.

The platform’s main idea is to be an instrument in automating the formal steps regarding the process of the assignment of usage. Notifications of the acts performed and signatures of contracts, for example, should occur digitally through the platform.

Moreover, the PUG-offshore platform will be of mandatory use by ANEEL, the Navy Command, the Air Force Command, IBAMA, ICMBio, ANP, the Ministry of Infrastructure, the Ministry of Agriculture, Livestock and Supply, the Ministry of Tourism, and ANATEL. It should concentrate the information provided by the agencies and institutions related to this type of licensing procedure.

In parallel, Ordinance No. 685/GM/MME details rules and procedures regarding the assignment of usage for the production of offshore electric energy.

The current content of Ordinance No. 685/GM/MME also defines additional rules regarding the assignment of usage contract and the DIP.

The public consultation is extremely relevant since there are currently more than 60 offshore wind projects, which correspond to 170 GW of installed capacity, with license applications filed with IBAMA.

Both Ordinances are available for public consultation for 30 days, counted from their publication in the Official Gazette, which occurred on 9 September 2022.

Bill No. 576/2021 is under review in the House of Representatives and a voting session should be lined up soon.

Our Energy, Regulatory and Environmental teams are available to provide further clarification on the subject.