Impacts of Provisional Measure 1300/2025 on Incentivized Energy in Brazil
Provisional Measure 1300/2025 marks a new chapter in the regulation of the Brazilian electricity sector. Focused on the modernization and economic sustainability of the system, the Provisional Measure introduces changes that directly affect consumers and investors in incentivized energy. Below, we highlight the main points of attention:
1. End of Discounts on Grid Usage Rates
The Provisional Measure establishes that discounts on transmission (TUST) and distribution (TUSD) system usage rates for new incentivized energy contracts will cease to exist as of December 31, 2025
This means that:
- Only contracts signed up until this date will maintain the tariff benefits.
- The measure aims to reduce cross-subsidies and promote greater balance in the sector.
- There may be a “rush” for new contracts before the deadline, which requires strategic attention from consumers and traders.
2. Preservation of Benefits for Distributed Generation
Despite the changes, the MP maintains the benefits for distributed generation, especially in the case of photovoltaic solar energy, as provided for in Law 14,300/2022
The Energy Development Account (CDE) will continue to cover tariff components not remunerated by the consumer-generator.
3. Separation of Distribution and Commercialization Activities
By July 2026, distributors must carry out the accounting and contractual separation between energy distribution and commercialization activities
This opens space for greater transparency and competitiveness in the free market.
4. Opening of the Free Market
The MP also confirms the schedule for opening the free energy market to all consumers as of August 1, 2026, which may expand opportunities for incentivized sources, but also increase competition.
What Does This Mean for Your Company?
- Companies with incentivized energy projects must speed up decisions to ensure current benefits before the end of the term.
- Free and special consumers need to reevaluate their contracting and migration strategies.
- Investors and developers must consider new regulatory risks and seek alternatives for economic viability.