Brazil stock exchange to have free power market trading platform

Brazil’s B3 stock exchange is to launch a platform to negotiate free power market contracts, in which power purchase agreements are closed directly with customers.  

Local media reported that the platform will involve pre-registering contracts in order to enhance transparency, starting in the third quarter. 

The free power market has seen strong growth in Brazil in recent years. The country ended March with 7,453 consumers registered to negotiate electricity deals in the free market, up 23% on a year ago, according to power trading chamber CCEE. Between January and March this year, 443 consumers migrated from the regulated to the free market.   

At least 929 registration requests are under analysis, most of them by consumers with demand between 0.5 and 2MW. The main attraction of the free power market in Brazil is that users can cut costs by avoiding the high rates of the regulated market, especially intensive electricity consumers, as well as sustainability issues since companies can choose to be supplied by renewable sources.   

“The free power market is growing a lot. It is a trend that started with foreign technology companies that bought renewable energy supply for longer periods,” Lucas Araripe, projects and new businesses director at wind power firm Casa dos Ventos, said in a recent interview with BNamericas. “There are many benefits in this strategy because renewable sources are competitive and help firms reach sustainability goals.”   

Currently in Brazil only large consumers with demand above 2,500kW are allowed to choose suppliers, but the country is moving ahead with a plan to let all consumers enter the free market before 2024.