Socioeconomic impact of Brazilian electricity market liberalization: Forecasting and optimized tariff analysis

Abstract

–This article integrates forecasting methods with an optimized tariff model to assess the effectiveness of the schedule proposed by the Brazilian Association of Energy Traders, as outlined in the technical note NT n°10/2022-SRM/ANEEL. This note discusses the regulatory measures to fully open the free energy market to all captive consumers by 2026. Several models, including Winters, SARIMA, ARIMA, and trend analysis were compared to determine the most suitable method for each input variable in the TAROT model, aiming to enhance forecasting accuracy. The results show that the new schedule proposed in the technical note successfully maintains the balance between the economic surplus of concessionaires and the socioeconomic welfare. Despite both approaches declining during the migration period of low-voltage consumers, their surpluses remain positive. However, there are negative effects on tariffs, impacting all consumer groups remaining in the regulated market, both high-voltage and low-voltage consumers. A key conclusion is that further regulatory changes are essential to mitigate additional increases in energy tariffs, aligning the proposed schedule with the reduction of legacy contracts.