Brazilian electricity distributors would be obliged to contract at least 250 MW annually of biomass-generated energy under a proposal being discussed by congress. The purchase of electric power at auction would be made for a minimum period of 25 years starting from 2014, according to a government note.

To participate in concession auctions, distribution license holders must attain 70% local content in their equipment inventory and service contracts. Biomass sources legally recognised would include urban waste, sugarcane bagasse as well as agricultural and forest residues.

The proposal also establishes criteria for the expansion of biomass generated power in the national interconnected system (SIN). Concessionaries would be compelled to call an annual tender for the acquisition of biomass-generated energy from plants with a capacity less than 1 MW.

Generating units would be exempt from paying tariffs for the use of transmission and distribution systems for a period of 15 years. After that, generators wouldl receive a 50% tariff discount under existing laws for renewable energy producers with installed capacity less than 30 MW. Operators would also be entitled to deduct costs associated with the acquisition of goods and services related to biomass production.

The project will be further analysed by the ministries of mining and energy (MME), finance and justice before it can be ratified by president Dilma Rousseff.