The Brazilian electricity market architecture: An analysis of instruments and misalignments

Michael Hochberg and Rahmatallah Poudineh

Utilities Policy, 2021, vol. 72, issue C

Abstract: Brazil's current electricity market design heavily relies on auctions, long-term contracts, and central coordination mechanisms. Combining these instruments has proved to be effective in ensuring resource adequacy, a key policy objective. However, the implications of the dominance of the centrally coordinated auctions for long-term contracts are worth examining. This paper argues that the current market architecture may not represent the optimum long-term solution for a sustainable market as it ignores consumer preferences to drive investment decisions, transfers risks to consumers, has made the short-term market less relevant, and suffers from regulatory and design complexities.

Keywords: Centrally coordinated energy auction; Brazil; Electricity market (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:72:y:2021:i:c:s0957178721001016

DOI: 10.1016/j.jup.2021.101267

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