Luciano Freire CCEE - Electric Energy Commercialization Chamber. April 8, 2013 Montevideo, Uruguay

Transcription

1 Brazilian Electricity Market 4th ELAEE Conference Energy Trends and Developmentin Latin America Luciano Freire CCEE - Electric Energy Commercialization Chamber April 8, 2013 Montevideo, Uruguay

2 MAIN FACTS AND FIGURES ABOUT BRAZIL Howbig is it?

3 Main Figures and Facts about Brazil Brazil Territorial Extension 8,514,876 km² Population (Aug 2012) million GDP 2012* US$ 2.25 trillion 6 th WorldEconomy Electricity Sector Installed capacity (Dec 2012) 121 GW Hydro 66% Thermal 27% Others 7% Transmission lines 103,362 km Consumption (Dec 2012) 45 TWh Captive Market: 75 % Free Market: 25 % Source: ONS * using the 2012 average exchange rate 3

4 Main Figures and Facts about Brazil Number of Market Participants Total (Dez 2012): 2,461 Contracts (2012) Number of Contracts/month 19,487 Volume traded (Dec 2012) 59 TWh Energy Auctions (from 2004 until now) Volume (energy TWh) 6,469.3 Average Price (US$/MWh) 65 Volume (US$ billion) 420 4

5 Brazil s Electricity Market at a Glance Electricity Generation Competition in the Market Auctions & tariff Regulated DISTCO & captive consumers Transmission and Distribution Natural Monopoly Two Markets OTC and Electronic Platform 25% of the market Free Traders & free consumers State-owned and private enterprises operating side-by-side Centralized Dispatch optimized by the National Power System Operator CCEE: Brazilian Market Operator 5

6 CCEE Role as Brazilian Market Operator- Main Activities Spot Price Calculation Registration of all Contracts Accountability & Settlement of the Market Metering Auctions for Regulated Market Market Surveillance Analysis & Market Data 6

7 BRAZILIAN REGULATORY SCENARIO AT A GLANCE Whatis newto themarket?

8 Brazilian regulatory scenario Ex-ante Nomination and Price Transparency Ministry of Mines and Energy directive (MME nº 455, Aug/2012) Objective: Improve default risk management and enhance information symmetry From July/13: Obligation to nominate the free market bilateral contracts before the energy delivery (ex-ante), in a weekly basis Obligation of reporting price information to CCEE, allowing the creation of price references in the free market (price indexes and forward curve) Federal Government Tariff Reduction Initiative (Bylaw 12,783, Jan/2013) Objective: reduction in end-user tariffs around 20% Renewal of concessions in the electricity industry Generation, Transmission and Distribution Conditionsfor renewalofgenerationconcessions: Regulated prices (reduction estimation from US$ to US$ 14.79) All the energy were allocated to distributors in longterm contracts (regulated market) What are we talking about? Generation: 13% of the current installed capacity (15,279 MW) Transmission: 67% of the national interconnected system Distribution: 35% of the regulated market Endorreductionofsome charges oftheelectricity industry

9 Comparison of Electricity Markets Churn Rates Electricity Markets Churn Rates 10 Germany 8 Nord Pool GB Netherlands France Brazil 0 Colombia Liquidity α ( immediacy; resilience ) Source: OFGEM/CCEE 9

10 Liquidity in the Brazilian Electricity Market Brazilian Liquidity in the Free Market NCRE:Non-conventional(Renewable Energy)

11 TECHNICAL EXCHANGE CCEE EPEXSPOT ECC White Paper

12 Technical Exchange CCEE EPEXSPOT ECC CCEE has partnered with the European Power Exchange (EPEXSPOT) and the European Commodity Clearing AG (ECC) for technical exchange formalized by a Memorandum of Understanding (MoU) signed in February 2012 Partners Deliverable Documents Feasibility study developed by CCEE EPEXSPOT ECC Objectives Improving the collateralization methodology of the spot market Studying trading platform design and clearing solutions Enhancing quality in price formation White Paper with a prospective vision to be presented to the Brazilian authorities and stakeholders launched in November 2012, in Salvador, Brazil Conceptual roadmap containing an indicative timeline to improve the Brazilian electricity market (under construction) 12

13 White Paper Building a Smart Brazilian Electricity Market benefits to the market Financially secure Sustainable Competitive Transparent Organized market place a c t i o n s 5. Organize market surveillance 4. Clear separation of wholesale and retail market and incorporating demand response 3. Implement clearing solutions 2. Develop products to smooth the market functioning 1. Get the PLD (spot price) closer to real-time operation A tough and challen nging! path the basis of a mature energy market Neutrality Symmetry of information Liquidity Find out complete version of the White Paper: 13

14 Thankyou you! Luciano Freire CCEE - Electric Energy Commercialization Chamber