1. André Pepitone da Nóbrega Director Brazilian Regulatory Framework: Supporting the Growth of Renewable Energy Installed Capacity in a Sustainable Development Model May 26, 2015 Istanbul/Turkey

2. 2 Brasil Summary 8.515 million km 2 (83% of Europe) Territorial area 8.515 million km 2 (83% of Europe) 202 million inhabitants (27% of Europe) Total Population – 2014 202 million inhabitants (27% of Europe) 1.200.000/year Population annual growth 1.200.000/year Monthly new residential consumers 125.000 U$1.715 billion Overall GDP – 2014 U$1.715 billion Installed capacity 139.446 MW 84.958 MW (Feb 2014) Peak load 84.958 MW (Feb 2014) 2.664,15 kWh Electricity Consumption per Capita 2.664,15 kWh Annual Rate 4% Average Energy Consumption Growth Annual Rate 4%

3. 3 National Interconnected System: Installed capacity by generation source More than 75% of the electricity produced comes from renewable Source: ANEEL –31/12/2014 Facilities in Operation TypeQuantity Authorized Power (kW) % CGH – Very small Hydro497308.3010,23 EOL - Wind2284.887.6943,65 PCH – Small Hydro4874.790.2713,58 SOL – Solar31115.0900,01 UHE – Hydro20284.094.83862,8 UTE – Biomass + Fossil1.93537.826.77028,25 UTN - Nuclear21.990.0001,49 Total 3.662133.912.964100,00

4. 4 Transmission System: National Interconnected System Source: ONS / MME 2014 125.833 Km Mean growth (2003-2014) 4.440 km/year 2015/2018: 240 Transmission lines contracted 30.609 km of extension 2015/2018: 240 Transmission lines contracted 30.609 km of extension

5. 5 Brazilian Transmission Grid plotted on Europe Map

6. Amazonas River transmission line crossing 6 2.130 m  Lote A: LT Tucuruí – Xingu – Jurupari 1.054 km 9/7/2013  Lote B: LT Oriximiná – Jurupari – Macapá 1.426 km 30/9/2013  Lote C: LT Oriximiná – Silves- Lechuga 1.172 km 9/7/2013

7. 7 Amazonas River crossing - Transmission tower height comparison 295 m 70 m 50 m 150 m

8. Line workers and transmission towers view 8

9. 9 HydroFossilWindTotal Generation 52,1943,8359956,128 Proportion 92,99%6,83%0,18%100,00% RENEWABLE Generation 94,38% Fonte: CCEE HydroFossilWindTotal Generation 50,2737,90938858,570 Proportion 85,84%13,50%0,66%100,00% RENEWABLE Generation 87,35% HydroFossilWindTotal Generation 47,60812,15948260,250 Proportion 79,02%20,18%0,80%100,00% RENEWABLE Generation 81,98% April/2011 - Rainy season Electricity supply: monthly generation during the rainy season (in mean MW ) April/2012 - Rainy season April/2013 - Rainy season

10. 10 Energy sources for electricity supply 10 % World - 201323,305 TWh Fonte: IEA e MME/ BEN 609.9 TWh (2,6% of the World) Brazil - 2013 % WORLD (2013) Renewable = 21,2% Fossil fuels = 68,1% Coal Natural Gas Hydro NuclearPetroleum Other Sugar-cane Coal Natural Gas Hydro NuclearPetroleum Other Sugar-cane BRAZIL (2013) Renewable = 78,4% Fossil fuels = 19,2%

11. 11 Geographical distribution of hydraulic energy availability In operation or construction To be explored So far, 1/3 has been used Operation/Construction/ Concession 30 % 38 %32 % Not in use: studied Not in use: estimated

12. Hydroelectricity expansion with big plants in the North region 12  Madeira River basin (7.310 MW) :  Jirau (3.750 MW) and  Santo Antonio (3.560 MW)  Xingu River basin (11.233 MW) :  Belo Monte (11.233 MW) - supply 2016/2017  Tapajos River basin (~28.200 MW) :  Upper Tapajos : 12.200 MW total, supply 2016/2018  Teles Pires (5 plants, ~3.600 MW) and  Juruena (13 plants, ~8.600 MW)  Middle Tapajos: 7 plants (Sao Luiz complex), 16.000 MW total – supply 2017/2020 Up to 2025-2030, there is security for 150,000 MW (due to energetic and environmental sceneries) supply 2014/2015

13. Hydroelectricity expansion in the North region: land use 13

14. Solar Generation in Reservoirs: Sobradinho and Balbina Pilot Projects 14

15. Regulated Auctions 15 Since 2005 the Brazilian Government has been conducting auctions to contract electricity from power plants to be constructed (green field projects) The energy demand allocated to each source is set according to the government long term plan Long-term contracts (15 to 30 years) and Project Finance – Resource Adequacy Problem Lowest possible price of electricity for the DISCO Consumers Avoid collusion and market power abuse

16. Total Investment in Generation fonts 2005 ~ May/2015 16 US$ 89.6 billion 72% renewable

17. Fonte: EPE Greenhouse Gas (GHG) emissions, MtCO2eq, 2009 17 Sources: AIE, EPE China and USA are responsible for 46,4% of emissions from the electric sector Related to electric energy production, Brazil holds the 41 position among emitting countries Rest of the world 3.081 MtCO 2 eq World Total 11.827 MtCO 2 eq Electric energy production and consumption

18. Greenhouse Gas (GHG) Emissions, 2005 18 Source: AIE, EPE Electric Energy Other Sources Other Emissions In a world basis, the electric sector contributes with 39% of the emissions from the energy sector. In Brazil, that proportion was 9% (12% in 2013)

19.  Thermic Program (base load operation) Nuclear (public acceptance, wastes, security and other) Natural Gas (other uses, in industry, supply and prices) Mineral Coal (efficient clean burning, greenhouse gases emissions, and carbon capture technology evolution)  Renewable sources complementation Wind Biomass (sugar-cane) Solar Photovoltaic and eventually Solar Thermal Urban garbage  Energy efficiency and technological advances (After an economically and environmental viable use of the hydroelectric potential) Projections for installed capacity expansion between 2025 and 2030 19

20. 20 * 1 US$ = R$ 2,8649 R&D Programme: Available Resources 2014 1% NOI Net Operating Income NOI= US$ 58,43b 1% NOI= US$ 584,3Mi Noi(D) = US$ 38,34b => ( 65,6% NOI) EE R&D 1% NOI G 1% NOI T 0,5% NOI D 0,5% NOI D TOTAL R&D US$ 392,5Mi TOTAL EE US$ 191,9Mi 0.20% MME 0.40% FNDCT 0.40% ANEEL US$ 157Mi US$ 78,5Mi ANEEL US$ 191,9Mi

21. 21 Thank You! nobrega@aneel.gov.br SGAN – Quadra 603 – Módulos “I” e “J” Zip Code: 70.830-030 /Brasília – DF/Brazil Tel. +55 (61) 2192-8626