Analysis of Brazilian SHP policy and its regulation scenario

This article presents the main regulatory changes that occurred in the Brazilian power sector in 2009, along with the impacts these changes caused on the market, especially related to small hydropower (<30 MW). This study addresses regulatory issues based on inventory studies and records of basic projects, changes related to the compensation of the assured energy of SHPs in the Brazilian energy reallocation market, the socio-economic impact resulting from the construction of SHPs, SHPs in alternative resource auctions and finally the general outlook for the growth scenario for SHPs in Brazil according to the ten-year plan (2010–2019). The overall conclusions of this investigation were that the 2008/2009 biennium was a period of great changes in the regulation of small hydropower plants in Brazil, and the SHP market has shown maturity. Additionally, despite SHP being a type of technology that is completely dominated by domestic industry, in recent years, they have experienced policy disincentives caused by changes to rules that inhibit their growth.