Brazil
Q&A

Brazil's Luz aiming at 100,000 clients by end-2023

Bnamericas Published: Thursday, October 20, 2022
Brazil's Luz aiming at 100,000 clients by end-2023

Specialized in retail, digital, technology, and energy, Brazil’s Luz expects to grow with the expansion of the free (non-regulated) market and distributed generation in the country. 

The goal is to give consumers autonomy and simplify their energy bills.

With current operations in the cities served by CPFL Paulista, in São Paulo, the company expects to reach 100,000 customers in nine states by the end of 2023. 

In this interview, Luz founding partner, Flavio Catani, talks about the company's business and plans, which include the use of smart energy meters.  

BNamericas: What’s your growth projection for the free energy market in Brazil?

Catani: The market is very busy and will undergo many changes in the coming years. The biggest challenge today is to look to the future and anticipate the new technologies and changes the market must go through. 

The government is moving toward the opening of the market. At the beginning of January, the distributed generation law was approved. In July, the free market was approved as of 2024 for medium and high voltage customers, which should result in the entry of more than 107,000 industrial and commercial customers. 

With this, we see a possibility of the opening of the free market for low-voltage customers, which are more than 85mn, which should occur between 2026 and 2028. For this, we await the approval of bill 414/2021 [the electric sector modernization project]. 

BNamericas: Is Luz's service limited to consumption guidelines and measurements, or does the company also act as a power trader? If so, what’s its strategy for acquiring energy? Does it have its own generation plants or will it buy energy in the free market?

Catani: Luz is a digital energy supplier that works on two fronts. The first is related to energy supply, with the offer of a guaranteed discount on the bill for low voltage customers, which are residential and commercial consumers, and for medium and high voltage customers, which are commercial, service or industrial consumers. The discount can reach 30%, depending on the consumer's profile. 

Besides the savings, through Luz, the consumer will be able to adhere to conscious consumption, since they’ll have control, as they’ll have information about the consumption per minute, day and hour, being able to see consumption peaks and the predictability of the bill through our application. This is the second front of our work, in which we offer consumer transparency and simplicity for consumption education. 

As of 2023, customers will have at hand all the information about the main energy offenders in their homes: whether they are appliances, such as air conditioners or electric showers, being able to analyze in detail their consumption and that of each appliance, a personalized breakdown for each type of consumer. 

For the supply of low voltage energy, we use the model of shared distributed generation. About 25% of the supply comes from our own plants in solar farms and 75% in plants leased from partners. 

We’re starting operations in the cities served by CPFL Paulista, and we intend to expand to five states by the beginning of next year. Our goal is to reach 2,000 customers by the end of 2022 and 100,000 customers in nine states by the end of 2023. 

For medium and high voltage customers, we use the free market energy model, also with a guaranteed discount. We have the guaranteed discount option in the retail model and we offer the distributed generation model for these customers with a focus on energy generated in solar parks. 

BNamericas: What’s the profile of the clients sought by Luz? Commercial and residential? In what income range? 

Catani: Our clients are residential and commercial of low, medium and high voltage, so we can say that we serve the market as a whole, regardless of the consumption value. For each customer profile, we make available a type of guaranteed discount and a plan, based on the analysis of each one's consumption. 

BNamericas: How much has Delta Energia invested in Luz, and how will these resources be used?

Catani: We cannot give any investment figures, but we can highlight that the amount invested was mainly for the areas of technology, marketing and digital, which is Luz's core business, so that we can bring differentiated services to the market, allowing consumers to have transparency and access to their consumption in the palm of their hand. 

Delta Energia has 20 years of history, is one of the leaders in the energy sector and believes in the transformation of the market. We can highlight that Luz has the commitment to make the entire company scale in the next five years and reach the moment of complete opening of the energy market as a leader in the sector. 

BNamericas: Where will smart consumer meters come from?

Catani: The meters will be manufactured in-house and will have a mix of imported parts, but with a good amount of content from national production. All the knowledge and technology is 100% Luz. 

Customers will count on a meter with 99% assertiveness, much better predictability than the current bills, besides being a meter approved by [telecoms regulator] Anatel

BNamericas: What’s the annual revenue target?

Catani: We have a confidentiality agreement and cannot give any figures, but I reinforce that our goal is to reach 2,000 clients by the end of this year, expanding to 100,000 by the end of 2023 and working with the planned scalability to become the sector leader when the energy market is fully opened.

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