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Power in Brazil: is the market (really) free?

Rafael Herzberg's picture
Consultant energy affairs Self employed

Rafael Herzberg- is an independent energy consultant, self-employed (since 2018) based in São Paulo, Brazil* Focus on C level, VPs and upper managers associated to energy related info, analysis...

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  • Jul 5, 2020

Power in Brazil: is the market (really) free?

Approximately 30% of electricity consumption occurs in the free, deregulated market. 

Is it really free?

Formally, of course, the market is free. There is an intriguing aspect that goes in the opposite direction. If a free consumer needs to sell a surplus of power, the answer starts to be different.

Even though there is an official power clearinghouse, if this excess power is sold there delinquency is the name of the game, for years now.

Result: "maneuvers" must be made so that this volume is not transacted in the official chamber to avoid the unwanted situation. Of course, at an additional cost.

In countries that have well-organized and supervised systems, settlement is simple, quick and consistent, just as it should be.

Here in Brazil, in addition to the extra transaction costs, people must be allocated every month to manage this Brazilian shortcoming.

Bottom line: deregulated energy users are not "so free"!

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Thank Rafael for the Post!
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