Neoenergia S A : By hiring the bonds, the company's clients encourage the generation of renewable energy, contr ...

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The Teles Pires Hydroelectric Power Plant, controlled by Neoenergia, was registered for the issuance of Renewable Energy Certificates (I-REC). The securities can be marketed and transferred to companies that, by contracting them, directly encourage the generation of clean energy, contributing to the fight against climate change. This is a widely accepted way in the global financial market to demonstrate sustainable energy practices and balance greenhouse gas (GHG) emissions. The approval was made by the Totum Institute, the entity responsible for the system in Brazil.

I-RECs are growing in Brazil and worldwide, especially at a time when the market is increasingly demanding compliance with ESG​ criteria (environmental, social and governance, in english translation). From January to April 2021, the same number of certificates has already been issued as the whole of last year.

'These securities enable the traceability of energy, ensuring its clean and renewable origin, and ensure reliable carbon accounting, based on global standards. Therefore, they are a solution used by companies that integrate sustainability indexes of stock exchanges or have emission reduction targets, for example. Thus, customers who buy the certificates of generation at the Teles Pires plant are aligned with our own objectives of assisting in the decarbonization of theeconomy', says the Superintendent of Operations and Hydraulic Engineering of Neoenergia, José Paulo Werberich.

The hydroelectric plant, located between the states of Pará and Mato Grosso, has an installed capacity of 1,820 MW and is considered one of the most efficient in the country. Each I-REC is equivalent to 1MWh of energy generated.

To issue the certificates, the Teles Pires plant was included in the I-REC Platform, after an audit process carried out by the Totum Institute. Securities related to the energy generated by the project from 2020 may be marketed. After the sale, they are 'retired' - that is, transferred to the buyer, avoiding duplicate negotiation to maintain the credibility of the negotiations.

I-RECs can be acquired as an environmental attribute of clean energy, with the aim of neutralizing companies' carbon emissions. For this, they are based on the inventory of GHG emissions of scope 2 of the Brazilian GHG Protocol Program, those derived indirectly from the energy consumed. In practice, it is possible to contract certificates equivalent to this issue. This type of trading can be done by both free market and regulated environment clients.

Carbon credits

The Teles Pires plant also has a Clean Development Mechanism (CDM)project, an emissions compensation format created by the Kyoto Protocol. Through this initiative, the energy produced by the enterprise generates carbon credits, the Certified Emission Reductions (CERs). In 2020, 1,473,640 tCO2e were sold for R$ 2.3 million to companies in Brazil, India and the Netherlands. These credits were issued by energy production in the period between November 2015, when the hydroelectric plant went into operation, and February 2017. The company is in process to issue credits for the period from February 2017 to December 2018, which total approximately 5.6 million tCO2e.​