Contracting of energy: An analysis for small-sized distributors

Abstract

This paper presents an analysis of the power purchase options for small-sized distributors in the Brazilian electricity sector. The analysis is based on the conditions provided for by industry legislation. Throughout the text, relevant topics are discussed to the understanding of the electricity market in Brazil, such as the current structure of the electricity sector, the Brazilian electrical system and the regulatory framework governing the electricity contracting environments. Still presents the models of power purchase contracts and price formation in free markets, regulated and spot. Finally, a case study for a small distributor is displayed. The study was conducted from the elaboration of hiring scenarios where it was possible to identify the alternative that had the best price/risk.