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Energy & Grid Management
Rafael Herzberg
Rafael Herzberg
Expert Member
Top Contributor
 · Posted in Energy & Grid Management

Brazil: becoming free... so what?

Brazil: becoming free... so what?

As of January 2024, all consumers connected at high voltage will be able to migrate to the free market.

Currently, they can only be free above a minimum contracted demand.

This is great because those who migrate to the free environment make significant savings in relation to what they pay as regulated.

A good part of the savings made stem from the fact that in the free environment a series of regulatory costs are not charged. Only the regulated are.

And what will happen is an important increase for regulated since these fixed costs, measured in USD billions, will be shared by less energy consumed in this environment.

And the big ones impacted will be the low voltage regulated consumers. They shall have their tariffs significantly increased to "compensate" for this distortion.

But, with the expectation that low voltage consumers may also migrate to the free market in a few years, one can foresee (1) a great legal/institutional uncertainty and (2) an increase in future costs also in the free environment for "accommodate" this situation.