Brazilian Electricity Regulatory Agency ANEEL Superintendency of Research and Development and Energy Efficiency SPE R&D Programme for the Electric Energy Sector

1. R&D Programme for the Electric Energy Sector Brazilian’s Law for R&D in the Electric Energy Sector Law # 9.991, July 24th,2000 Objective Innovations to face the technological and market challenges of the Brazilian electric sector. Establishes minimum percentages from Net Operating Income (NOI) for investing in R&D projects Utilities Segment R&D R&D regulated by ANEEL Generation 1.0 % 0.4 % Transmission Distribution 0.5 % 0.2 %

ES 1. R&D Programme for the Electric Energy Sector Available Resources 1% NOI R&D EE G T D 0,5% NOI TOTAL 40% CT Energ 40% Utilities 20% MME Total EE Utilities US$101.6Mi US$50.8Mi US$124.2Mi US$254Mi NOI= US$ 37.8bi 1% NOI= US$ 377Mi Noi(D) = US$24.8b => ( 66% NOI) R&D ( 0,5% NOI(D) = US$ 124.2Mi EE ( 0,5% NOI(D) = US$ 124.2Mi US$ 124.2Mi *1US$= R$ 3.10

1. R&D Programme for the Electric Energy Sector Institutional Arrangement Regulatory Agency Utilities Universities Manufacturers Consultants Research Centers Preparation & Execution Regulation & Supervision

2. ANEEL´s R&D Management Overview R&D Investments: from 2008 (with interest in execution) Theme Quantity % Planned Investment (US$) Energy Alternative Sources 195 12,16% 349.636.754,58 24,89% Thermoelectric Generation 48 2,99% 34.400.832,10 2,45% Basins and Reservoirs Management 58 3,62% 61.433.929,70 4,37% Environment 141 8,80% 99.375.019,55 7,07% Safety/Security 97 6,05% 52.456.029,02 3,73% Energy Efficiency 98 6,11% 51.533.692,81 3,67% Power Systems Planning 125 7,80% 156.750.124,12 11,16% Power Systems Operation 170 10,61% 101.582.018,84 7,23% Power Systems Control and Protection 283 17,65% 172.624.051,47 12,29% Power Quality and Reliability 112 6,99% 69.021.004,51 4,91% Metering, Billing and Commercial Losses 118 7,36% 75.238.538,73 5,36% Other 158 9,86% 180.864.279,95 12,87% Total 1603 100% 1.404.916.275,37

Phase of the Innovation Chain Investments Made / Programmed 3. Smart Grid projects Investments Made / Programmed by Phase of the Innovation Chain Phase of the Innovation Chain Qtd. Investments Made / Programmed % Basic Research 18 R$ 26.799.112,85 5,01% Applied Research 79 R$ 181.822.496,43 34,00% Experimental Development 97 R$ 293.852.361,83 54,96% Serial Head 8 R$ 10.620.910,76 1,99% Pioneer Lot 6 R$ 21.603.811,44 4,04% Total* 208 R$ 534.698.693,31 100,00% * Updated on 11/2013.

4. Inova Energia Programme Topic Economic subvention and Financial resources Objetos do Apoio Smart Grid CTIs e Design Houses R&D Compulsory resources Alternative Sources (Solar e Wind) Public service concession companies Industry Companies Public Funds (FUNTEC) and Financial resources Electric, hybrid and conventional efficient vehicles

5. Demands for research themes/projects and training Solar photovoltaic energy; Solar thermal energy with high temperature; Wind energy; Wave and tide energy; Geothermal energy generation; Power generation from municipal waste and agribusiness; Gasification of biomass and fossil fuels for energy generation; Energy generation and conversion from coal; Hydrogen and fuel cells; Greenhouse gas emissions in reservoirs and electric systems; Nanotechnology and new materials applied to the electric sector; Interconnected systems and blackouts prevention; Smart grids; Electric vehicles; Energy Storage; and Prospective studies - technology roadmaps.

6. R&D Programme Expectations Increase the efficiency and agility in the resources application; Decrease the bureaucracy in the projects execution; Optimize allocation of resources on strategic and priorities issues; Converge technological innovation into business, promoting effective sharing of experiences; Disseminate project results among utilities; Show effective benefits for electricity customers, who supports the projects.

Brazilian Electricity Regulatory Agency – ANEEL Superintendency of Research and Development and Energy Efficiency – SPE speped@aneel.gov.br SGAN 603 – Módulos “I” e “J” Brasília – DF – Brazil – 70.830-030 Tel.: +55 61 2192 8642 www.aneel.gov.br