The Brazilian research and development (R&D) program for the power sector has 692 delayed projects, according to electricity regulator Aneel, pointing to the need for more transparency about its efficiency and use of funds.
The delayed projects add up to R2.83bn ($524.7mn) in estimated costs before their execution, with 348 originally expected to deliver their final reports by 2019. Considering the total estimated cost of projects before execution, including cancelled and suspended projects, it adds up to R12.2bn.
The program is coordinated by Aneel and funded by all of Brazil's power consumers. Distributors and concessionaires are mandated by law to direct 0.5pc of their operating incomes to the program to fund innovation and modernization projects and studies.
It is not clear how much of the total estimated cost was invested and what happened with each project to cause the delays described in Aneel's public database. Companies from any part of the electricity chain can register projects to use these funds — which must be approved by Aneel — and then must submit results by the end of the research period.
Critics argue that the private sector should conduct research on its own, but many market participants say these R&D projects are essential for market development.
Out of the 3,478 projects registered in Aneel's database since 2008, 327 were run by state-controlled companies Petrobras and Eletrobras. The companies are responsible for 23pc of the total estimated costs of all projects registered to Aneel before execution.
Eletrobras subsidiary Furnas, for example, has seven of the 20 most expensive R&D delayed projects in Aneel's public database. The company said that three of these projects are concluded and undergoing an internal financial audit before submitting results to Aneel, while other two were canceled. Additionally, one project was concluded and submitted to the regulatory agency in 2021 and another is suspended because of litigation with a contractor for their inactivity. The projects would research on renewable energy solutions, the use of hydrogen to increase synergy between hydrogeneration and solar generation and other innovations that were incorporated by the company.
Other firms with delayed projects say they have postponed their results. Some even affirm that they have already handed Aneel their reports.
The lack of transparency makes it difficult to evaluate the initiative's larger impact and fuels criticism of those who are against it. Aneel has directed R1.26bn to finalized projects since 2008.
