Abstract

Brazil's Tariff Flag Program is presented with its main modelling features and outcomes explored. The program's virtue is coupling several independent procurement commitments in a single target cash flow linked to an information framework, which seeks to provide real-time awareness about the power system's production costs. Regulatory principles such as simplicity and stability challenge the modelling approach. The framework may be useful for non- or partially liberalised power markets, where uniform tariff rates are common. It also may help utilities to deal with wholesale prices' volatilities.

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