Electricity market in the free contracting environment (ACL) by the sugar-energy sector in Brazil: Overview and analysis of threats and opportunities

Abstract

In recent years, the Brazilian electricity market has gone through provision crises, due to: the greater increase in demand with regard to supplies, the lack of infrastructural investments and the concentration of the energy matrix in hydroelectricity, this scenario can be minimized by the bioelectricity coproduced based on sugar cane pulp. This research aimed to characterize bioelectricity commerce in a free contracting environment (ACL) and compare it with a regulated contracting environment (ACR), identifying the threats, opportunities, strong and weak points of each. Interviews were held with managers: of four sugar-electricity mills, the local energy distributor and a free consumer. Data were processed using SWOT and PEST analysis, as well as content and correspondence analysis techniques. The results indicated that the main advantage of ACR is security about energy prices, while the disadvantage is the contract’s lack of flexibility, in combination with high penalties. The relevant strong point of ACL is the flexibility to define term, price and quantity, and the weakness is price volatility. Due to these characteristics, agents tend to act in both markets. Key words: Bioelectricity, free contracting environment, regulated contracting environment, sugar-energy sector, free consumer, energy cogeneration.