Argo is part of the Sistema Interligado Nacional (SIN) (National Interconnected System). The SIN consists of a high voltage network whose purpose is to connect power generation plants to distribution companies and free consumers. Brazil has one of the largest interconnected electricity transmission systems in the world, with over 150,000 km of transmission lines, serving approximately 98% of the Brazilian electricity market.
About transmission
For an installation to be considered Transmission of Electricity, it must have a voltage level equal to or greater than 230kv. Less than 1% of the power demanded in the country is found outside the SIN, in small isolated systems, located mainly in the Amazon region.
Regulatory Agents
The Operador Nacional do Sistema Elétrico (ONS) (National Electricity System Operator) is the agency responsible for coordinating and controlling the operation of the electricity generation and transmission facilities in the National Interconnected System (SIN), and for planning the operation of the isolated systems in the country, under the supervision and regulation of the Agência Nacional de Energia Elétrica (Aneel) (Brazilian Electricity Regulatory Agency)
ANEEL (Brazilian Electricity Regulatory Agency) agency responsible for regulating and supervising the industry.
The expansion of the transmission industry takes place by means of public sales of public concessions promoted by ANEEL, in force since the late 90s.
The winning party of the public sale is the participant who tenders the lowest annual revenue from the asset, who becomes responsible for building, operating, and maintaining the transmission facilities normally offered for the 30-year concession period. The transmission companies are compensated by the RAP (Allowed Annual Revenue) determined at the time of the winning bid in the public sale, and adjusted for inflation on an annual basis, and revised in the 5th, 10th, and 15th year of operation.
A safe and well-defined regulatory environment is one of the main factors that makes investments in the transmission industry reliable, in addition to:
- No risk of volume: predictable revenues and based on the availability of infrastructure, and not on the volume of energy transported;
- Inflation protection: revenue adjusted on an annual basis by the IPCA (Broad Consumer Price Index), and revised in the 5th, 10th, and 15th year of operation;
- Consolidated regulatory milestone: federal regulation made by an independent agency that has been in force for over 20 years