Palestra realizada pelo membro do Conselho de Administração da CCEE Luciano Freire durante o 4° Encontro Latino-Americano de Economia da Energia - ELAEE, realizado em 8 e 9 de abril de 2013, em Montevidéu, Uruguai. Apresentação em inglês.

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

2. MAIN FACTS AND FIGURES ABOUT BRAZIL
How big is it?

3. Main Figures and Facts about Brazil
Brazil
Territorial Extension 8,514,876 km²
Population (Aug 2012) 193.9 million
GDP 2012* US$ 2.25 trillion
6th World Economy
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
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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
Transmission and Distribution OTC and
Electronic Platform
Natural Monopoly
Auctions & tariff 25% of the
market
Two
Regulated Free
Markets
DISTCO & captive consumers 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
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6. CCEE Role as Brazilian Market Operator - Main Activities
Spot Price Calculation
Accountability & Settlement of
Registration of all Contracts the Market
Metering
Auctions for Regulated Market
Market Surveillance Analysis & Market Data
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7. BRAZILIAN REGULATORY SCENARIO AT A GLANCE
What is new to the market?

8. Brazilian regulatory scenario
Ex-ante Nomination and
Federal Government Tariff Reduction
Price Transparency
Initiative
Ministry of Mines and Energy directive
(Bylaw 12,783, Jan/2013)
(MME nº 455, Aug/2012)
Objective: reduction in end-user tariffs around 20%
Objective: Improve default risk management and
enhance information symmetry • Renewal of concessions in the electricity industry –
Generation, Transmission and Distribution
From July/13: Obligation to nominate the free
market bilateral contracts before the energy delivery Conditions for renewal of generation concessions:
(ex-ante), in a weekly basis Regulated prices (reduction estimation from US$
44.36 to US$ 14.79)
Obligation of reporting price information to CCEE, All the energy were allocated to distributors in long-
allowing the creation of price references in the free term contracts (regulated market)
market (price indexes and forward curve)
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
• End or reduction of some charges of the electricity
industry

9. Comparison of Electricity Markets’ Churn Rates
Electricity Markets’ Churn Rates
10 Germany
8
Nord Pool
6
GB
4
Netherlands
Brazil
2 France
Colombia
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: OFGEM/CCEE
Liquidity α ( immediacy; resilience )
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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
White Paper with a prospective
vision to be presented to the
Brazilian authorities and stakeholders
Objectives
– launched in November 2012, in
Improving the collateralization Salvador, Brazil
methodology of the spot market
Conceptual roadmap containing an
Studying trading platform design and indicative timeline to improve the
clearing solutions Brazilian electricity market (under
construction)
Enhancing quality in price formation
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13. White Paper – Building a Smart Brazilian Electricity Market
benefits to the Financially secure Competitive Transparent
market
Sustainable Organized market place
A tough – and challenging! – path
5. Organize market surveillance
a 4. Clear separation of wholesale and retail market and
c incorporating demand response
t
i 3. Implement clearing solutions
o
n 2. Develop products to smooth the market functioning
s
1. Get the PLD (spot price) closer to real-time operation
the basis of
a mature Symmetry of
Neutrality Liquidity
energy market information
• Find out complete version of the White Paper: www.ccee.org.br
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14. Thank you!
you!
Luciano Freire
luciano.freire@ccee.org.br
CCEE - Electric Energy Commercialization Chamber
www.ccee.org.br