Free Energy Market and Distributed Generation

Pública Sumary BR starts operating in Energy Trading

2. Free Energy Market

3. The Role of the Energy Trader

4. Distributed Generation

5. Photovoltaic System

6. Contact for inquiries

Pública BR starts operating in Energy Trading Acquisition of Grupo Targus Energia expands our portfolio

We are starting a new phase. We have completed the acquisition of the Targus Energia group and have began operating in the sale of electricity, offering products and services related to the free energy market and distributed generation products.

With a complete portfolio of products, we will operate throughout Brazil and serve all types of consumers, from customers with small businesses to those with large industries, from the boldest to the most conservative.

Our role is to help your company find more effective ways to forecast costs, improve your energy bill management and adopt new technologies that make your operations more profitable. Our main objective is to optimize our customers' energy use and offer access to sustainable energy, with transparent and high-quality service.

We have a highly qualified multidisciplinary team specialized in the subject of energy and its surroundings, and we work daily to provide specialized services, based on a business model of commercial independence. Only in this way it is possible to manage the contracting and sale of energy with transparency and efficiency.

The entire portfolio will be offered with the credibility and security provided by a company with the history and relevance that BR has.

Pública What products will be offered? BR will have two large groups of products and services: those related to the free energy market and those related to the distributed generation market.

Which customers can access these products? The portfolio of products and services is extremely complementary, allowing us to offer products from the energy market to all types of customers.

Free energy market products, due to regulatory restrictions currently in force, are restricted to energy consumers that are already of a reasonably relevant size. Thus, this product has restricted access to consumers who are from the medium voltage group and who have a contracted demand with the distributor of at least 500 kW, which can be reached individually or through the sum of several units demand in the same region and in the same CNPJ. Generally, this limit translates into an energy bill of at least R$40k per month. Some customers typically able to use this product are: gas stations with CNG, road stations, industries, large stores, shopping malls, large transport companies, commercial buildings, among others.

Distributed generation market products will be offered to customers who are connected at low voltage, and who have lower energy bills, typically up to R$10k per month per unit. Some examples of customers are: urban stations, small businesses, small carriers, among others.

Pública What are the free market products and services?

BR, via Targus, will offer full support in all stages of migration to the free market, from the adequacy of the metering system to adhesion to the Electric Energy Trading Chamber (CCEE).

In addition to the migration process, clients will also receive assistance after starting their operations in the free energy market (ACL). Ensuring budget scenario forecasts and simulations according to the client's own premises, the trader will manage consumers and generators in the free market. Regulatory advice, energy efficiency management and proposals for sustainability actions will also be offered.

BR will also act as an energy supplier to its customers, always seeking to customize the characteristics to suit the consumption profile of each one, who can even count on savings guaranteed by BR.

In addition to our traditional products, BR will enable the customer to be a retail consumer. This consumer has a simplified registration within the CCEE, with all operational obligations being the responsibility of BR itself. This model is an alternative for customers who want to access ACL benefits, but with a simplified contracting and no bureaucracy.

What are the products and services in the distributed generation market?

BR will offer customers with lower energy consumption, especially those connected to low voltage, the possibility of having direct access to a power generation plant through renewable sources, mainly solar and small hydroelectric plants.

The energy generated by the plants is injected directly into the distribution network and is transformed into energy credits, which are used to deduct consumption from the local distributor's bill. Customers do not need to make any investment, just joining the Consortium related to the plant to receive the credits.

Thus, the model offered by BR will ensure consumers savings in relation to their original energy bill, access to a sustainable source of energy, without the need to carry out any work, continuing to receive energy through the same distribution network.

Pública 2. Free Energy Market

What is the Free Energy Market? It is an energy purchase environment where consumers can freely negotiate all commercial terms of their contracts, including suppliers, price, energy volume, term, payment date, among others.

What are the advantages of acquiring energy on the free market? The free market brings several benefits to its consumers without major investments, including a significant reduction in energy bill costs, which can reach 30%. In this market it is also possible, for example, to customize your energy contracts with suppliers in the way that best suits each customer's consumption profile. Another advantage is predictability: energy prices can be fixed for the long term and, therefore, consumers are less exposed to natural fluctuations in energy prices.

In the free market, how the customer receives electricity? The supply of electricity is carried out by the distributors, through the distribution network, and this flow remains unchanged when a customer migrates to the Free Market. Even if you buy energy from a different supplier, it is still transmitted in exactly the same way, and there is no additional risk of a power outage.

Who can be a free consumer? Currently, the free electricity market has a legal limit (which must be reduced from 2024) that requires its consumers to have a contracted demand of at least 500 kW, which can be reached individually or through the sum of the demands of units that are in the same CNPJ and in the same region. This limit generally translates into the need to have a minimum monthly expenditure on energy of approximately R$40,000.

Pública How can I join the free energy market? How migration works? We take care of absolutely everything for our customers, don't worry. In order to migrate to the free market, the consumer must notify the distributor 6 months before the end of the term of their contract, by sending the so-called Letter of Denouncement. For example, if the contract is valid from January to December, the consumer must send the Letter of Complaint in June. After sending the denunciation letter, the migration process begins, being fully coordinated by the BR marketing team. The most relevant steps in the process are: the adaptation of the customer's measurement system (called SMF) to the standards required by CCEE; adhesion of the consumer as an agent in the CCEE; and opening a checking account at a specific Banco Bradesco branch. There are only two investments required for the migration to the free energy market: payment of the costs of adapting the new metering system, which typically costs between R$10,000 and R $30,000 per consumer unit; and the payment of the CCEE adhesion fee, paid once by the customer's CNPJ and totaling approximately R$7,000.

What are group A consumers? There are two groups of consumers, Group A and Group B. B is low voltage and A is high voltage. Group A (high voltage) is composed of consumer units that receive energy at a voltage equal to or greater than 2.3 kilovolts (kV), characterized by the binomial tariff (applied to consumption and billable demand). Group A, subdivided into six subgroups, generally includes medium and large industries and commercial establishments. Group B (low voltage) is characterized by consumer units served at a voltage lower than 2.3 kV, with a single tariff (applicable only to consumption), subdivided into four subgroups.

How the energy sold on the free market is charged? Energy is billed monthly only after the end of the month of consumption, from the sending of bills separate from the billing received from the energy distributors. When migrating to the free market, consumers pay mainly two bills: the distributor and BR. Naturally, the sum of the two bills will be less than what consumers pay today in the regulated market (or captive market).

In which cities the service is available? The service will have national coverage, reaching the entire Brazilian territory.

Pública From which sources will the energy sold by BR come? The energy sold by BR will come from all sources. In working with customers, the focus will be on renewable sources from hydro, wind, solar and biomass power plants, which will guarantee their consumers the use of 100% sustainable energy.

What are the benefits for the environment? Through its operations in the free energy market, BR encourages and collaborates so that more and more consumers have a renewable generation source, that is, whose energy comes from wind, solar, small hydroelectric plants, biomass, among others. In this way, BR contributes to increasing the relevance of these sources in the Brazilian energy matrix, reducing the impact on the environment.

Power quality and supply remain the same? Yes. Physically, it will be the same energy that was received in the captive market, with the same quality of supply. That is, there is no change in the energy received by the consumer.

By choosing the free energy market I can run out of energy? The change to the free energy market does not alter the possibility of running out of energy at all. The risk of running out of energy in this market is the same as in the captive market, that is, when there are problems in the distribution and/or transmission network.

If there is any problem with the power supply, who should I contact? The supply of energy in the free market continues to be carried out by the same distributor that carried out this activity in the captive market. Therefore, in the event of a power outage, the complaint must be directed to the distribution company. However, the BR team will always be by your side for all matters involving the free market, always with the objective of optimizing your company's energy strategy.

Is there a minimum deadline for the contract? No. Contract term negotiations are done on a case-by-case basis and depend on a number of factors, including energy volume, contract modality, customer risk profile.

Pública 3. The Role of the Energy Trader

What does an electric energy trader do? An electric energy trader acts as a provider of liquidity and stability in the electric power value chain - buying and selling energy from generators, traders and consumers. In the case of consumers, when they spend around R$ 40,000 on electricity, information present in their monthly energy bill, they can stop buying energy from local distributors and buy directly from free market suppliers.

What is the importance of a trader for the customer? The trader has the role of understanding the customers' needs and helping them to navigate the free market through full advice on strategic and regulatory aspects of energy purchase and the customization of contracts to meet each of their needs linked to their profile. consumption.

Pública 4. Distributed Generation

What is distributed generation? Distributed generation or “DG” can be defined as a source of electrical energy directly connected to the distribution network, that is, smaller plants that generate energy from a renewable source at the place of consumption or close to it.

This generated energy is transformed by the distributors into credits that are used to reduce the consumption of the energy bill. In practice, it is as if the customer “sells” the energy generated by the generation plant distributed to the distributor for the same price he pays for its consumption.

How is the measurement and monitoring of energy credits performed? All the work is done by BR and the customer only pays for the credits actually received on his energy bill from the distributor. In general, all plants are equipped with meters that measure generation in a given period. This generation is allocated to the consortium members of that plant on a monthly basis, who receive the credit through the distributor's energy bill.

It is possible to enter more than one consumer unit with the same registration in the Consortium? Yes. It is possible to include even different CNPJ's units in the same Consortium, as long as they are in the same distribution concession area.

Do I need to make room in my establishment to install some equipment? Not necessarily. We work with both the model where the customer installs the plant in their own establishment and the model where the customer does not invest any value, but signs a contract that gives them access to the energy generated by a plant close to the point of consumption, through participation in the Consortium that holds the generation credits. The distributed generation plant must be located in the concession area of the distributor responsible for serving the consumer unit.

Pública Will I have to do any maintenance on my establishment? Only if the customer chooses to install the plant at the place of consumption, in which case BR's partner maintenance team will periodically carry out maintenance. However, for the product that the customer accesses the generation of a plant outside its consumer unit, no maintenance is required.

What is the discount amount and how is it provided? The discount varies according to the distributor's tariff and the region's renewable energy generation potential. Typically, the discount ranges between 10 and 15%..

Credits not used in the previous month can be used in subsequent months? Yes. If the generation credit exceeds the consumption reported by the unit in the month, the additional amount remains as a credit to be used within 60 months.,

Will I be remunerated for the energy credit not consumed? No. The customer is only remunerated when the energy credits are consumed, otherwise the monetization of credits is not allowed.

What happens if the plant does not generate the proper amount of energy in relation to my consumption? This is an extremely rare scenario that is unlikely to occur. However, if there is any problem at the plant, the customer will no longer receive credits until the situation is resolved and will pay their energy bill from the distributor as if there were no distributed generation. There is no penalty and, under no circumstances, will the customer pay more than he would have paid if he were without DG.

If my establishment changes its address, how should I act? Will credits automatically go to the new address? Changes of address are part of everyday distributed generation and are fully housed within the model. In this scenario, the consumer must only notify BR within 60 days, which will exchange the registration data of the consumer unit in the Consortium.

Pública Can I transfer excess credits to another consumer unit? No. The energy credit that a consumer unit has cannot be transferred to others, regardless of ownership. This transfer is only allowed if this consumer unit terminates its contract with the distributor. That is, if the customer has moved, and consequently terminated the contract with the distributor, he can transfer these credits to other consumer units, as long as they are under the same ownership.

If I want to increase or reduce the consumption of my establishment, will the credits be automatically adjusted? When a consumer joins a Consortium, he informs the Consortium administrator what will be the reference consumption for that unit, so that that amount of energy is suitable for his/her profile. Any increase or reduction in volume must be informed to the Consortium administrator (Targus or the partners responsible for generation), who will make adjustments to the adhesion term if that plant has available power (in case of increase).

What happens if the energy tariff increases? Distributed generation customers have a guaranteed discount on their energy bills. That is, regardless of the increase or decrease in the energy tariff, your bill will always be that amount minus the discount applicable to that consumer.

How is the payment done? Will the monthly payment of the energy bill be made to the Consortium or the Energy Distributor? The customer will pay an energy bill to the distributor and another bill to BR, given that the sum of the two bills will be less than what the consumer paid in the captive market, exactly equivalent to the agreed discount.

How does the apportionment works? In the term of joining the Consortium, each consumer informs the Consortium manager the consumption that they wish to use as a reference for the apportionment. With this information, the manager calculates what percentage of the total consumption of all consumers in the Consortium should be allocated to that unit and makes the monthly apportionment.

Pública What happens if the power goes out? The GD model does not alter the possibility of running out of energy at all. The risk of running out of energy in this market is the same as in the traditional market, that is, when there are problems in the distribution and/or transmission network. If there is a power outage, the same procedure as the current procedure must be followed, that is, contact the energy distributor.

What are the advantages of joining the Consortium? What are the positive points related to the environment? In addition to the guaranteed reduction in the energy bill without any need for investment, distributed generation guarantees that the energy consumed by the customer comes from renewable sources, with this aspect being able to be used commercially by the customer to publicize the care of their business with the environment.

Pública 5. Photovoltaic System

The equipment needs a lot of maintenance and operation? A photovoltaic system operates automatically, so no operation is required for it to work, just install it. Regarding maintenance, the components of the photovoltaic system are extremely resistant and durable, not requiring frequent maintenance.

Can I reset my energy bill with a photovoltaic system? Not entirely, but if your project is designed to produce all the electricity you need, your energy bill will be very low, leaving only a minimum amount for public lighting and the network availability rate - which are items mandatory requirements of distributors.

What happens to the energy I produce and don't consume? All energy generated by the system and not consumed is automatically supplied to the public electricity grid. The amount of injected energy is measured and computed by the distributor as a credit for you. These credits can be consumed within 60 months.

Is it possible to generate energy in a Consumer Unit and reduce the consumption of others? Yes, it is allowed to generate energy in a consumer unit, and the excess energy can be deducted in other consumer units in the same concession area of the electric energy distributor, provided that the CNPJ of the registered consumer is the same.

Can I sell the energy I generate and do not use? No, the excess of energy generated by a photovoltaic system can only be injected into the grid and become credit, and cannot be sold by the generator. However, there is the possibility of generating such credits remotely, that is, the technology may be installed in a different place from where they will be consumed.

Pública What happens if it rains for a week? Without sun, your solar energy generation system produces less energy and it may be that during this period you consume the credits that were generated on sunny days. But in the medium and long term, these rainy weeks were already foreseen in the generation estimates of your system, since we used historical statistical bases of solar irradiation.

What happens if the power goes out? Your solar power system does not work as a backup. If the distributor's power fails, your system also stops working. This is a mandatory safety measure so technicians can carry out repairs without risk of electrical shock.

Pública 6. Contact for inquiries

If you are already a BR customer, access the Energy Portal available on the Business Channel and register your interest or send us a message with your energy bill to e-mail [email protected]. We will send you a free review.

If you are not a BR customer yet, send us your energy bill to [email protected] and we will send you a free analysis.

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