I would like to make some announcements before we begin. At this moment, all participants are on listen-only mode. Later, when we start the Q&A session, participants will be able to send their questions using the Zoom Q&A tool. Please note that this video conference is being recorded. Our results release are available on our website at www.engie.com.br/investidores, along with the ITR and other documents filed together with the CVM yesterday, where detailed analysis of financial statements, operational results, ESG indicators, and progress in the implementation of new projects, among other highlights in the period. Before we proceed, we would like to clarify that statements made during this video conference regarding the company's business outlook, should be treated as predictions, depending on the country's economic condition, the performance, and the regulation of the electrical sector, among other variables, and therefore are subject to change.
We would like to remind journalists that if they wish to ask questions, they can do so by emailing them to the company's press office. To present ENGIE Brasil Energia's performance in Q3 of 2023, we have Eduardo Takamori, Chief Financial Officer, and Investor Relations Director, Rafael Bósio, Investor Relations Manager of the company. Now, I will hand it over to Takamori.
So we have 113 participants. Well, good morning to everyone. Good afternoon. I'm speaking from our headquarters in Paris. I hope that this connection helps us. Now, when we go to our main slide, with no further ado, we would like to talk about the Adjusted EBITDA. There was a significant increase of 23.5%.
It went to BRL 1.4 billion-BRL 1.8 billion, and you can see the main drivers of the results were the transmission segment results. Number one, I would like to clarify something. The BRL 318 million, 50% was because of the increase of the revenue, because during the same period last year, part of the assets were under construction. And now we have all of our assets in operation, so part of the BRL 318 million are part of the increase in revenue, and approximately BRL 270 million come from the IFRS adjustment. This is during Q3 last year, we recognized a cost increase, and this goes directly to the results because of our accounting procedures. And we will not see this again because the assets are operational.
There was a slight increase of revenue during Q3 this year, totaling BRL 318 million. That is very important for our. BRL 118 million, the second item, which is positive regarding the EBITDA variation, comes from the equity income of the TAG. We will elaborate this, and the net profit went to BRL 230 million-BRL 330 million, which was positive. Finally, the third element here that justifies the EBITDA variation, is the result of the sale of Pampa Sul subsidiary, aligned with our decarbonization policy. This is part of the controlling company's target, and we're with this, we lose our long-term revenue. But this, we are. We trust that we are on the right pathway. We are reassured.
On the right-hand side, here, we had the adjusted net income of BRL 709,929,000, over a 30% increase quarter-on-quarter. We also have the positive effect of a lower depreciation and amortization because we sold Pampa Sul. We do not have this asset associated, and a combination of a drop of increase of financial costs. The number one was based, that would be, we had, thirty-three million, and it is adjusted by the IPCA, and it is adjusted amongst quarter. And the net result of financial expenses was positive BRL 40 million. We had a drop in financial expenses, expenses, and the net income was 40%.
So this is why we have the BRL 43 million of financial results, and when you have a higher base, you pay over the net income. On our next slide, here, we can see the main highlights. From their business point of view, number one would be, we announced to the market the expanding of the portfolio diversification with the acquisition of five photovoltaic complexes. We, on Wednesday, we analyzed these assets, and we were able to announce the deal, and this operation meets all the return criteria and risk allocation. And these assets are positioned where our current assets are positioned with great synergy. We would like to highlight that the assets are highly contracted in the long term. They have a capacity of two-thirds of the capacity, and the remaining tranche for the ACR, it has also long-term contracts until 2042.
This state, the allocation, is in the free market. It doesn't offer. It doesn't have a market risk. Now, on the lower part, we would like to mention that we closed the purchase operation of CEEE-G , and so by and this increased five average megawatts to our company's portfolio, totally compatible with our business. We would like to remind you that we operate Machadinho. And the last element here is that regarding Santo Agostinho, although at the end of 2023, we had 12 out of 70 wind turbines, now we have 19 wind turbines and operating commercially, and 30% of the commercial operation is underway. So 60% is underway, and we maintain the initial forecast for the complex to be working by the end of the year. Here we have our ESG indicators.
Number one, as a result of Pampa Sul, there is a significant drop in the intensity of the company's emissions. Basically, what remains is scope three. We're going to address this different, differently. Perhaps we will have to change the structure of the slide. And on the right-hand side here, we have health and safety. That is not only something important to maintain our license. We had a significant drop in the accident frequencies, number of accident, and we are very happy, because this is a continuous effort made by the company so that all our employees and third parties are able to go back home safely. And on here, we also have. You can see that throughout the quarters, we increase the percentage of women in the workforce. This is also a very effective policy, and we have focused strongly on this.
Here we can see the evolution from 25%-28% and in leadership process. So we have women in the company and women in leadership positions. So, this is an increase of 10% when we compare the quarter, the same quarter last year to this quarter. Now, investment in innovation and social responsibility, investment, investment in innovation in growth throughout 9 months, although it has, is at the same level last year, the social responsibility and investments, we have the same level of investments year to date when we compare last year to this year. Just one observation, that our resources, our incentivized resources dropped slightly, but we offset this throughout the period. Now, Rafael, you have the floor.
Good morning, and thank you very much for participating in our call and for your interest. We have over 200 participants now.
Now, our energy commercial strategy, the classic slide, where we update our energy balance. Our energy balance will be seen in the attachments on slide 35, but here we -- You have it in charts. So for those that follow closely and follow the evolution quarter by quarter, can identify that we have maintained the energy sales, although there has been a drop in appetite, which is normal in a scenario where prices are driven downwards. But we continue in the market, we continue selling.
During this quarter, we dropped an average 74 MW average in a uncontracted balance from 2025 to 2028, without identifying the impact on the average sales price, which was stable in comparison to what we announced during Q2 for 2023, 2024 and 2025. Therefore, we continue focused on our strategy, pursuing to follow the free market opening in order to capture the consumers that are migrating. I believe that on the next slide, we will be able to see this. In this slide, we identify that we have a significant growth in number of customers, so 22% comparison to the same period last year, and also we've grown in comparison to the last quarter.
This shows that our strategy has captured the expansion of the free market, especially in niches where the consumer has greater appetite, and on our side, we can find better contracting prices, and this is reflected on our average prices of our portfolio. So now you can see our expansion, and here you can see the progress of our projects. The first project would be Santo Agostinho Wind Complex. The beginning of the operation is the first quarter, the first windmill. Takamori already updated you regarding the number of wind turbines that are generating, are in test or in operation, already 7.5% of global progress. And auxiliary works for access networks and substations, 100% completed. This is operational.
2023, we have Santo Agostinho, and now we have Serra do Assuruá, that is the biggest implementation complex from the ENGIE Group in the world, which will become operational by the end of next year. So we are adding capacity in 2023 and 2024 with Serra do Assuruá. As you can see here, we started also concreting, started the concreting of wind turbine foundation and excavations for the transmission line, and on 2025, we will continue adding capacity to our portfolio with the Assú Sol photovoltaic complex in Rio Grande do Norte, with over 650-750 MW of installed capacity that... And implementation began in July. This combo will add more, an additional 2 GW of installed capacity, and this represents over 20% of generation that we will be able to deliver. And then now our next slide.
Here, we see growth in transmission. Here, we highlight that together with the diversification of our revenue, we have two operational projects, Gralha Azul and Novo Estado. On Q1 of 2024, Gavião Real will become operational. That is a small project that we bought during last year's auction. Nonetheless, on the following slide, we have lot 5, that is the Asa Branca transmission auction. We have over 1,000 transmission lines that will be added to our portfolio to broaden the diversification of our revenue that provides stability to our results. Finally, here you can see the Jirau HPP, where the controlling company has a 40% stake. There is potential to transfer this to ENGIE Brasil Energia. Jirau is an operational HPP. In October, it celebrated 10 years of operation. The indicators here are positive.
You can see that it has 100% of uptime operating factor, and during this quarter, it was the first company in Brazil to receive the IHA certification, and the second plant in the world that receives this type of certification, which demonstrates the high operational level of our plant. This is a slide... Well, it didn't change vis-à-vis the last quarter, is where we present the projects that are in a developed stage. They're not under construction, I would like to highlight, but they are waiting for the right moment, for right market moment to be developed, because the expansion cost and the implementation cost is above the long-term average price.
But we must have a diversified portfolio of projects to be developed in the future, because when there is a positive turn, when the market changes, we have to be prepared to resume the growth of the company. One, because to, when you develop a product from the beginning to the get-go, can take four or five years. This is why it's important to have projects under your sleeve, so you can implement them as soon as there are better conditions. So Takamori, now I can—I give it back to you to talk about the financial performance.
Thank you, Rafael.
In this slide of financial performance, point number one, I would like to remind you that although with a number of investments, although we mentioned that there will be a 55% distribution during the first semester, we would like to remind you that our return on equity is extremely positive. Our return has exceeded 30%, that is way above the average of the industry. Now we've seen 37% on Q3 of 2023, the return over invested capital, that contemplates that, and the company's capital is 20%, because this is a result of our capital structure. We are delivering more to our shareholders. Here, you can see all the investments during the past years up till the date, so it's 2016, that would be almost BRL 26 billion, and there is still a lot to deliver.
Here you can see that throughout time, we started as a generation company, then we went to transmission, and now we're also transmitting renewable energy. We're. And recently, we invested in TAG. This is acquisition of 32.5% stake in TAG, which has helped us in our result. Now, throughout this period, there was an Adjusted EBITDA growth of over 100%. We more than doubled, and our dividends are on our own capital of BRL 14 billion, and we are proud of this. We can go to our next slide. This is a slide that has a number of bars, and sometimes it's challenging to explain it. In summary, we had a drop of 8.5% of our net operating revenue.
As Pampa Sul, the exit of Pampa Sul from our portfolio, represents a drop of BRL 162 million when we compare it to Q3 of last year. And out of these 8.5%, this accounts for 6%. This is why the rest. This is how we justify the rest. The second relevant point here would be, there was a financial asset remuneration higher. This is BRL 59 million, that are Jaguara and Miranda assets, are generation assets. And this is the PCA variation causes this effect on our net operating revenue. Now, our next slide, we have BRL 39 million of drop because less hydro generation quarter-on-quarter, although with the positive impact of export in the beginning of the year. And here, these BRL 39 million represent 1.5% of the variation of 8.5%.
Now, in the central bar, I would like to highlight a drop of BRL 40 million quarter-on-quarter, basically because of the price and sales volume, which dropped. Although with lower price and sales volume, here, you can see that we have been successful in the management of our portfolio. And finally, I would like to highlight the dark blue bar of -BRL 65 million. That is a result of a drop of the revenue of our trading operations. We sold less, but this drop is not as important because there was a drop compatible to the purchase of our free trade, therefore, the result was neutral, and it's generated a drop from BRL 2.7 billion-BRL 2.5 billion. Now, the result of equity income, here you can see our TAG.
TAG does not make an announcement, but we're breaking this out so you can understand. TAG, our TAG has generated an important result, a net income, which is important. Here, we're breaking out a little bit the result. I would like to draw your attention, number one...... that the last bar, that is, here we have a net income of BRL 1 billion during Q3. One third of this 30.5% is a contribution to the EBITDA, because of equity income. And here, 320 would be the contribution to the EBIT. How do we compare it to the, to – so it went from last year to BRL 202 million to BRL 320 million. So there was an increase, and you will see that in the upcoming slides. In the first bar, BRL 2.37 billion of NOR.
The most effect was the update of the transportation tariff. Here, we have a 70% come from the update of transport tariff. We have less financial expense, because of the drop of CDI and the impact of our refinancing. And a fourth element, that although we have the benefit of transport and lower financial expense, we pay more taxes. We, because there's more revenue, we pay more taxes. Here, we have a variation to 202-320. That would be the increase of BRL 108 million. Here, here you can see the EBITDA change. The TAG is in light blue. The first point that I would like to highlight is that the TAG effect; here we have the green lines. This is the effect of the transmission distributed in three different sides.
Now, the two extreme bars, this is where we have the IFRS. This is an accounting... It's an accounting requirement, and the central bar, the. This is the effect that I mentioned in the beginning of the presentation, that is the variation of the undertakings under construction. And now, their operation of this reflects the rep of BRL 50 million. So TAG, light blue, green would be the allocation of the result of our transmission concessions, part of the EBITDA, and part of this is adjusted for transmission for the central bars. And in the central bars, where we went to BRL 1.66 billion-BRL 1.72 billion, this is justified by the sale of Pampa Sul, -BRL 62 million when we compare it to the same quarter last year. We spoke about this in the past slides.
Another important element would be lower generation, quarter-on-quarter in EBITDA, and we already mentioned this. There was a positive export result, but there was a negative effect regarding the same period last year. The last point from the central bars, EBITDA and Adjusted EBITDA, number one would be the blue bar. That is BRL 101 million. That is a drop of the volume of sales purchase. This moment of low prices, we, there is lower activity and purchase and sales from third parties. This is why we have a drop here. Here, Jaguara and Miranda , that is the BRL 59 million bar. This is a result of the remuneration of financial assets, and there has been an improvement of the EBITDA because we have no more fuel costs.
The last point that is important to note is that after our Adjusted EBITDA on the extreme right-hand side, we can see BRL 61 million that are non-recurring. This is basically because of Solar Maracatu, we had a strong wind event. The damaged part of the equipment, part of these equipment's. So this was a loss of BRL 61 million, and although we recognize this impairment, these assets are insured. This will become operational. Briefly, we will give you more news regarding the unfolding's of these, of this problem. There was a significant growth when we talk the IFRS of 23%. When we exclude the effects of IFRS, the EBITDA drove 24% quarter-on-quarter. Now, the next slide. Here, the evolution of the net income.
Here you can see a growth of 31% from BRL 709 million - BRL 928 million. The main element here is the EBITDA. It went to BRL 1.4 billion - BRL 1.768 billion. There is a variation of BRL 336 million, as we already explained. We also had depreciation and amortization because we no longer record any Pampa, -43%. Which is because of the increase of expenses and the positive, net positive of revenue, minus financial costs and income taxes here. And our results are BRL 928 million regarding adjusted net income. Now you can see our debt balance starting BRL 18.7 billion.
This gross, gross debt was the same during Q2, with a slight variation at the end of 2022, very similar. The great difference is that we had a more cash robust position during the second quarter. That was BRL 4.7 billion, and because of cash, because of dividends, this cash position dropped BRL 3.1 billion. And our net debt here, that was around BRL 14 billion, went to BRL 15.3 billion net debt. So regarding ratios, we maintain the level of 2.5 net debt, EBITDA and 2.1, 2x the net debt over the Adjusted EBITDA. This is a comfortable position for us and compatible with our moment, so that the company can carry out its investments and to execute the operations that we announced during the past weeks. The debt profile shows us that we have a long term.
We have a short term position of BRL 2.4 billion, part in CDI and an IPCA until the end of next year. After 12 months, we have BRL 600 million to settle, so it will be BRL 3 billion in, from now until the end of next year. A profile that is adequate for our cash generation capacity, BRL 2.2 billion, BRL 2.3 billion in the upcoming years. And with IPCA structure, 80%, 10% CDI, 9% TJLP. So we are comfortable with our position here. And our next slide. Here we have our investment plan. Here, you've already seen the profile of the debt. Now you can see our investments. A lot of things will happen in the upcoming years. We will be bearers of good news in terms of future investment.
This year, we invest, we invested BRL 3.5 billion. We are in the final period of Santo Agostinho, Serra do Assuruá as well. We invested over BRL 1 billion throughout this year, and I would like to highlight for 2024, well, BRL 6.9 billion in investment, which is compatible with our cash generation leverage level and all our track record of financial discipline and financial capacity, and BRL 3.5 billion of Serra do Assuruá, BRL 3 billion Assú Sol. These are significant investments that are part of our capital structure. Our next slide. Here we can see our dividend distribution. Throughout the years, we distributed 100% of the net profit, and throughout our story, we dropped. That was limited to 55%.
And here, I would like to highlight that although we mentioned during the first semester, 55% of payout, I would like to share with you, that you know our track records are of financial discipline. It is natural that the dividend distribution should be compatible with our growth moment. You just saw a slide with the company's expansion, and this dividend policy has to be compatible to, in order to give a better payout to our shareholders. So, these are our comments regarding the slides that have been presented, and now we can go to our Q&A session.
Please send your questions through the Q&A tool. Our first question, Taka, comes from Julia Zaniolo, from Santander. She has two questions.
I will first ask the first question: The TAG result, although excluding the non-recurrent effects, was positive. What are the expectations for the upcoming quarter? Should we expect a continuity of these levels of the TAG results with financial results, pressuring less the bottom line?
Julia, it's a good question, because TAG always surprises us. So it is something different to what we're used to deal with. TAG is an investment, and we do not give guidance for TAG. I would – this would be a wild guess, because we have a 1/3, 1/3 stake in TAG, and TAG has its own, it has its own management team. I really cannot share any expectations for the upcoming quarters. I do hope that it still provides us a lot of return.
The second question would be: Could you update over the interest and possibility that ENGIE has in participating in the next reserve auction?
Well, ENGIE, naturally, it monitors all the opportunity to contract energy in the long term, reserve capacity. All these auctions are observed by us. There, we do—there is no special treatment. We are always trying to maximize the return over investment and to lower the risks, so we are always paying attention to this.
Thank you, Taka. From Mr. Bandeira, that is an individual, and he said, "The company has not changed this dividend policy.
When will you announce the payouts that have been approved and provisioned, and if there will be more profits this year?"
This is a good question, but we cannot share this right now because it depends on a number of factors, the evolution of the business and other investment opportunities that may emerge, capital. There are many things that can take place, and it would be very premature to give you dates or moments, or give you values or payout percentages. So unfortunately, we cannot anticipate any or advance information. What we can... Our distribution policy maintains, is unchanged. The policy, as you can see, the minimum payout of 55%. So we have the flexibility to pay 55%-100%, depending on everything that Takamori just mentioned.
There is, this is a recommendation, and the board has to approve this, but the policy itself is to pay at least 55%, and this should not be changed. And naturally, with a less leverage position, it was easier to distribute 100% of the dividends. Nonetheless, 55% that has been communicated throughout the first semester is way above what the ex- the market and expansion distributes. So we do magic. So yes, we are a dividend of growth and payout, and we pay, we pay more than the, than the market, and we're growing at an accelerated pace.
Taka, the next question from Daniel Travitzky, from Safra. He has two questions.... I have the first question, and then the second question would be the acquisition of solar complexes announced last year. Why not to develop greenfield like other companies?
Isn't the CapEx per megawatt competitive, or are there other reasons? Can you explore this?
Well, basically, we continue developing a number of projects. Rafael showed you our portfolio of our pipeline of projects. The matter here is that to start from scratch means that we have to contract long-term energy to reduce the market risk. It is not a good moment to initiate a contracting process, and as always, we observe the market, and we see the opportunities of capital. Now, solar projects are compatible with our long-term objective of renewable energy. So all the assets that we are incorporated are in states that already have operational undertakings, and there is a long-term contract.
So this is the best of the world synergy, the undertaking that makes sense to us, contracted at long term and at good prices, and enabling a long-term recontract that makes sense to us, and it has to complement our portfolio.
So there is not one or the other. Actually, we have to allocate our capital the best possible way. And the second question, can we comment the contracts of energy sold throughout the semester? Although the volume is small, the prices are interesting. Could you talk about this, and what how can we copy these contracts?
Okay, this is what I mentioned in the commercialization slide. We diminish the appetite where the price is pressured, but we've tried to broaden this in the free market, where we have a win-win.
We can sell at a higher price, but the consumer is also buying energy at a lower price, lower than at the distributor. And with this, we can drop the impact in our in the average price of the portfolio. We have a major portfolio, totally indexed. So this is a strong moment where we need a major volume of energy sold at a lower price than the average price to see the significant impact. And we have offset these impacts because we are highly contracted in the short and mid-run. We...
Thank you, Rafael. Thank you, Rafaela. Now, Henrique Perichi , an analyst from JP Morgan, he asks about the CapEx. During the first semester, the company invested around BRL 1.9 million, and the year guidance is BRL 3.5 billion.
Therefore, he would like to know, where does this slow down in our CapEx during the fourth quarter due to the level of leverage after the incorporation of Atlas Energy? Will there be a pause in the acquisition of new projects?
Enrique, although we only invested BRL 2 billion during the first quarter, in the third quarter, we've invested part of this, where we've invested part of this. We have Santo Agostinho, that is in its final stretch, that will need an additional investment to end the project. And part of the difference, more than half of the difference, is from Serra do Assuruá. This is a project that initiated the works. We will invest significantly in equipment during fourth quarter.
So Serra do Assuruá will require a lot of investment by the end of the year, and about our leverage level. No, we don't expect a pause. We continue with our financial—we are financially disciplined. We have a good balance, and if we have to, if there is the right project with the right investment, with the right...risk profile, we will do it with the best capital structure, respecting all the investment criteria. And this is the advantage of being part of a multinational group.
Okay. We would like to remind you that the debt is only one part of the equation of our capital structure. We do not only do business with debt. Marcelo Sá, he wants to know what, what do you expect in legislation changes?
Because the PL 414 died in theory, so because the Secretary Efrain said that the sector will be reset.
Marcelo. We always are moderately optimistic with Brazil. You can see it due to all the investments that we've done here. Although the PL 414 remained a long period of time in Congress, we know that the industry reset can be still a generic expression. It can converge with some articles of the PL 414. We can have a new version, and well, we hope that something good comes out from all of these legislative discussions. We are counting with the market opening, correction of energy self-production. We expect the regulation to be honed so that Brazil becomes extremely competitive in renewable generation, and that this results in a higher GDP.
There are important things that can happen that favor the electric sector and the company.
Another complement from Marcelo Sá: What about the capacity auctions, if we have hydro projects that can participate, and what is the potential capacity? And if we have any idea, what would be the demand of this auction?
Now, capacity auction, we have two, two hydro projects, Salto Santiago, Ponte de Pedra . Salto Santiago are major machines. Here we have two wells available with over 700 mega. Salto Santiago and Jaguara. In Jaguara, we also have two, two existing wells, and we are constantly assessing the economics in order to enable these two projects. Yeah, these two complexes. This, in total, they represent 1,000 mega, 700 one, 700 the other.
Now, the auction demand, it always. We always question this because we see that on one side, you have an observed capacity of hydro generation, but recently, thermoelectric generation in some regions, you have to see nuclear generation availability. There are a number of things here. There is capacity need, but how we calculate this capacity isn't clear. The models aren't sufficiently developed, therefore, we don't feel a hundred percent reassured regarding what will be the necessary capacity in the mid and long run. And Marcelo Sa, about how we see the PLD volatility during the summer, where there'll be a detachment of prices because of a greater price detachment. It's easier to win the lottery than to answer this question.
There have been situations throughout the years where the market was convinced and everything went down the drain, and all the convictions went down the drain. So perhaps we don't know. Rainfalls will anticipate, will delay, we will have more availability of assets, macro climatic effects. Well, it's becoming very difficult to interpret this. The risk is always present. There can be a detachment, as there was a price detachment a couple of weeks ago, which was a major detachment, so it's very difficult to anticipate and to predict.... Tarcísio Ramos, which is an individual. He said, with the investment of BRL 3.5 billion this year and BRL 3.8 billion next year, what will be your net debt over EBITDA during the next year? Good question. Connected to what I just mentioned here, the debt is a way of funding for investments.
Historically, we've maintained our Fitch rating triple A, and we will continue pursuing this. For this, there are a number of directions of leveraging the most. We will continue pursuing this. There is no internal element and no shift of route that will deviate us. We also have the covenants with our debtholders or contracted debts. Therefore, we will continue with the same efficient management of our capital, and we also do not announce projections. We will not do anything that will threaten our rating. We will focus so that this doesn't happen. Diogo Weber , now, with the low prices in the short and middle run that affect the sales mix price and the trading operation, what can NG do to maximize the results in this market moment? I believe that we have to manage our portfolio.
Something that we do to manage properly our customers, to approach the consumers, to get closer to our smaller consumers, where we have greater margins, nothing different from what we're already doing. We invest a lot in the efficient management, in our capital, in our energy portfolio, and to just pay attention to uncontracted projects. So now we have to pay more attention to transmission than to generation, so that we can properly use our capital.
Thank you, Taka. The next question from Mr. Tarcísio Ramos, an individual investor. He wants to know if ENGIE assesses a new acquisition in the gas sector, like TAG, or any organic growth in the TAG sector.
Okay, there are two effects here. There is ENGIE Brasil Energia, that is this public company, and we, controlling company, also invested. So these are two investment groups in infrastructure.
We don't see why we shouldn't invest more. The organic growth of TAG is something natural, but we are always discussing where are we going to invest. So our focus here is the electric energy sector. I have no specific information to disclose, but we have two investment vehicles.
This was something that I wanted to highlight. We have a number of questions that will be sent to the IR department, and if you wish to pose questions, please do it through our Q&A tool. Fabio, Fabio wants to know about the maintenance and operational cost of the solar and wind complex. Do you already have any statistics regarding the hydroelectric relation? And what about distributed generation and the improvement of technologies of off-grid batteries? What is your long-term view, considering the risk? Now, well, hi, I...
Well, your first question, I am going to have to do my homework, because I don't have this answer on the tip of my tongue. Well, what we can say, in EBITDA margin, we've seen greater in wind farms, but hydro energy, they're similar, but there's nothing that draws our attention. The second part, that of distributed generation. Distributed generation is always a complex matter because the subsidy is high. So distributed generation, although it doesn't have a battery damages the electric sector. It takes space, so why by PCH? There is a lot of subsidies. So it is already a risk for the company. And not only for us, but in addition, of being a risk for a generation company like us, the population bears the brunt because they can't pay it. But for example, individuals cannot install distributed generation.
Number 2 is that, even if we were successful in the regulation discussion, well, if you have distributed generation with off-grid batteries, you would have to invest in order to enable the off-grid batteries. This happens in some places in the world, like Australia, where you have a price that justifies the installation of battery. Chile is doing this, California, but you need market conditions for this to happen. Before reaching this moment, all the electric sector agents will coordinate to dispatch the best way, and to better use your hydroelectric plant, that is a gigantic battery. So there is a lot of space to optimize our system before carrying out a distributed generation with off-grid battery.
We cannot create a subsidy policy for battery, and 'cause you are giving more subsidies to a technology that doesn't generate energy, and this means that you're not using your resources efficiently. In some places of the world, it does make sense, but in Brazil, we believe that this does not make sense. Correct me if I'm wrong. There is an additional factor to the strong subsidies that we've seen in Brazil. There is a market reserve. We cannot compete directly with GD, with individual. When the free market is open, there will be a competition, and we will see how competitive DG is, because conventional generation, centralized generation, we have a number of assets that are depreciated, amortized. There is a competitive generation price to face DG. I don't know. Yeah, extremely timely.
It is an antidote for the amount of subsidies for distributed generation. In the market, you can optimize the existing resources. You can use all the idle capacity, price it adequately, and generate value to society with no new investment, which is excellent for everyone. This is a highly complex matter. We have a subsidized source with market reserves. No.
Okay, we—this is our limit. Our questions will be sent to our IR department, and I will give it back to our Takamori for final remarks. I would like to thank all of you for your participating and your interest. We continue at your disposal to answer questions that weren't answered or that emerged afterwards. And I will give it back to you, Takamori, to end our call.
Thank you very much. I also thank you all for your participating, for participating.
The last point that I forgot to mention, that was regarding the evolutions of the PL in Congress. There is a matter that we haven't noticed. The, it's the deliberation of, of RDCE. Generally, this is the value that was paid by all the user of the transmission network throughout the last years. ANEEL technically perceive this, and due to the complexity of the matter and the impacts, this matter has not been deliberated. It's part of the agenda. And the impact is extremely significant for all the users. In a moment, when we're talking about excess of subsidy, a high amount of taxes on the sector, we see that it's natural to start by the most important matters, and one of them is RDCE, that has to be instructed by ANEEL.
So we believe that this will have a significant impact of BRL 1 billion to society. So we also hope, we hope this matter is deliberated in brief, and to receive the proportional reimbursement. The user isn't only generation, it's the generator, the free consumer, the distributor. So this was, this was an important matter that I wanted to approach, because it is highly relevant for society. And, perhaps this represents one-third of the total cost of generation throughout the year. But it—This is important. So with this, I bring our presentation to the end, and I thank you all for your participating.
The ENGIE Brasil Energia conference call has come to an end, and have an excellent afternoon.