‘The ESG agenda is fundamental for the company’ – Eletrobras Furnas

Brazil’s Eletrobras Furnas will hold, on February 17, its second tender of renewable energy certificates, aiming at companies that want to prove the renewable origin of the energy used in their activities.

The certificates make it possible to track the energy consumed, allowing the buyers to meet their sustainability goals, offsetting indirect greenhouse gas emissions, which are related to energy consumption (scope 2 of the Brazilian GHG Protocol Program) 

Three types of products will be offered, all with a 2021 generation base date associated with hydro plants owned by the state-run firm: the I-REC Standard for the trader and the final beneficiary, and the RECFY for the final beneficiary.

Furnas’ market studies and innovation chief, Fabiana Cristina Teixeira, spoke with BNamericas about the outlook for renewable energy certificates in the country.

BNamericas: Why did Furnas start to auction renewable energy certificates in February 2021?

Teixeira: Since Furnas is a public company, although the market for renewable energy certificates is bilateral, we wanted to give more transparency and isonomy to the process, also to get the best price for Furnas. 

Before the auction, the trading of the certificates was very limited. As the market is very secretive, we couldn't find out prices and reference parameters. We were even afraid of selling at a price that could later be questioned by the TCU [Brazil’s federal audit court], for example. 

BNamericas: How do you evaluate the result of the first auction, and what are the expectations regarding the second one?

Teixeira: The first one was very successful because we were able to negotiate both for the final beneficiary and the trader, who resells the certificate to the final beneficiary.

The auction also worked as marketing. After the auction, we expanded our negotiations, attracting clients that didn't come to us before, and promoting new direct sales. We are receiving registrations from companies that we never thought would buy. The expectation for the next auction is the best possible. 

BNamericas: What is the profile of the buyers of the certificates? 

Teixeira: Electro-intensive companies, especially those listed on the stock exchange, for compensation of pollutant emissions, and banks, for marketing reasons. The renewable energy certificate market is voluntary. 

BNamericas: Do you observe a movement by Brazilian authorities to make this mandatory?

Teixeira: Our energy matrix is one of the cleanest and most renewable in the world, which is why it is not yet mandatory. But what we have seen is that this market has grown exponentially in Brazil, even if voluntarily. So, both the Totum Institute [the issuer of CREs in the country] and we expect it to grow even more in the coming years. 

BNamericas: How many Furnas power plants currently issue the certificates? Are there plans to expand these bases?

Teixeira: To issue I-RECs we certified two hydroelectric plants and a wind complex. The possibility of issuing certificates on this platform is bigger than all the demand for certificates in the country. Each one of them is equivalent to 1MWh. So there is no need today to put new plants on the platform, as there is a cost for this. 

And we additionally have the RECFY. It was developed internally by our IT team and my market intelligence areas, with blockchain technology and certified by Bureau Veritas. The RECFY is an alternative for companies that seek to neutralize scope 2 emissions without being pegged to the euro, which is the reference of the I-REC. It is a 100% national product. In this case, we have a test plant issuing the certificate. 

BNamericas: Does the company target similar initiatives, associated with the ESG agenda and the energy transition process?

Teixeira: We have been studying other actions, such as carbon credits and green bonds. We are keeping an eye on this because we are always looking for innovation and sustainability. The ESG agenda is fundamental for the company.