Energy Advisor

Daniela Stevens, director of the Energy, Climate Change & Extractive Industries Program at the Inter-American Dialogue: “The lack of demand that resulted in the cancellation of the A-6 auction responds to a series of factors, not all of them alarming for renewables or the energy sector in general. The first is uncertainty related to the privatization of Eletrobras and the market liberalization. Auction winners of A-6 were supposed to start supplying electricity in 2028, and with this time horizon, distributors cannot estimate demand with any degree of certainty. In the liberalized market, Eletrobras will cease to contractually supply electricity to distributors within five years. Generators and marketers will be able to negotiate prices and conditions directly with consumers and distributors through bilateral contracts or auctions. Hence, while distributors’ captive market may shrink, or at least, not grow, distributed generation is expected to expand, so concessionaires may lose patrons as consumers start installing their own generation systems. Moreover, it is still unknown what the Ministry of Mines and Energy will decide regarding…”