Brazilian electricity market
August 31st,2015
CCEE - Câmara de Comercialização de Energia Elétrica
Brazilian Market Operator
Rui Altieri
Chairman
Chamber of Electric Energy
Commercialization
National Electricity Regulatory Agency Energy Research Company
Power sector governance in Brazil
CNPE: Definition of energy policies, with
focus on ensuring adequate supply
MME: Planning, management and
development of energy sectors
legislation; supervision and control of
energy policies execution; responsibilities
also over the mining sector
EPE: Planning of generation and
transmission expansion; technical
support of energy auctions
CMSE: Monitoring of the power system,
in order to ensure adequate supply
ANEEL: Regulates and supervises
generation, transmission, distribution and
commercialization of electricity.
Regulated tariffs setting
ONS: Optimized operation of the
National Interconnected System, with
focus on ensuring adequate supply at
reasonable costs
CCEE: Operation of the Brazilian power
market and, by delegation of Aneel,
execution of regulated power auctions
CNPENational Council for
Energy Policies
CMSEPower Sector Monitoring
Committee
Electric System National Operator
Ministry of Mines
and Energy
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CCEE´s role as Brazilian Market Operator
• Created in 1999, CCEE is a nonprofit private legal
entity, regulated and supervised by ANEEL
• CCEE´s mission is to promote the electricity
commercialization activities in Brazil, including
ensuring the smooth market functioning and
fostering discussions about the evolution of the
power sector market
Accounting and
settlement
Tecnology and systems to
improve market operation
Releasing information
and results
Training for players and
institutions
Registering of the power
contracts
Metering (generation and
consumption)
Main atributions
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CCEE´s Associated Members
• Players of generation, distribution and traders are obligated to become CCEE members, as
well as free consumers
• Regulated consumers and transmission players are not CCEE players
Class [%]
Generation 31 1,0%
Self Producer 58 1,9%
Distribution 49 1,6%
Trading 163 5,2%
Independent Producer 1015 32,7%
Special Consumer 1167 37,6%
Free Consumer 623 20,1%
Total 100,0%
Share
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CCEE operations in 2015
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• Operations held by CCEE accounts US$ 7.4 billions
US$ 6.2 bn US$ 339.5 mn US$ 368 mn US$ 509 mnUS$ 38 mn
Short-Term
Market“Old” hydro
quotas
Nuclear Energy
Quotas MCSDReserve
Energy
5 auctions promoted
343,658,129 MWh and U$$ 23.9 bn in contracts
Spot Market Settlement (shallow pool)
RequirementsRequirementsRequirements
ResourcesResources
Spot
Market
Spot
Market
• Each month, CCEE calculates and compares, for every associated company (everyone of the
generators, distribution companies and free customers), power availability and
requirements, considering consumption, production, power purchases or sales.
• The differences between requirements and availabilities are settled in the spot market by
the Price for Settlement of Differences - PLD
Spot market balance Spot market settlement
Exposure
X PLD
(R$ / MWh)
Spot Price
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Two trading environments
Sellers
Generation of Public Services, Independent Energy
Producers, Traders e Self Producers
Regulated Contracting
Environment
Distributors
Captive consumers
Ambiente de
Contratação Livre
ACL
Consumidores Livres
Consumidores Especiais
Vendedores
(Bilateral) 100% OTC
Contracts freely negotiated
(Pool) Auctions
All seller performs contract with
all Distribution companies 6
Energy Auctions
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• DISCOs are obligated to contract 100% of their load in pool, through public auctions
• Ceiling prices are defined by the Ministry of Mines and Energy
• Investors compete for concessions / selling energy in long-term contracts
Regulated consumers
Auction
Competition amongst generation investors
DISCO DISCO DISCO DISCO
Auction model
emulates a
Single Buyer
Energy Auctions
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“A-1”“A-3”“A-5”
Existing Energy Auctions
1 - 15 years contracts
New Energy Auctions
20 - 30 years contracts
“A”
“Adjust”
Alternative Sources Auctions Reserve Energy Auctions
Year A: Delivery year
Sellers: Generators technically approved by EPE or ANEEL
• Hydro: Contracts of 30 years
• Thermal, Wind, PV and Biomass: Contracts of 20 or 25 years
22º New Energy Auction (August 28st)
US$ 3.4 billions in contracts
US$ 1.2 billion of investments
40,586,580 MWh negotiated
Technology: solar
30 plants
Average price = US$ 84.32
Duration of contracts: 20 years
Technology: solar
30 plants
Average price = US$ 84.32
Duration of contracts: 20 years
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Auctions – Average price by technology (US$/MWh)
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US$/MWh
Brazilian Free Market
• The Brazilian Free Contracting Environment is an OTC Market
• Contracts are bilateral and CCEE knows only its amount and length
Generators
Self-Producers
Independent
Producers
Traders
Free Consumers
Buyers
Sellers
Bilateral negotiations
Electronic Platforms
• Since June, 2014, Free consumers are allowed to negotiate energy amounts with other
consumers and Free Market players (energy cessions)
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