Thousands of consumers to join Brazil’s free energy market in 2024

Photo: Alex Rodrigo Brondani/Shutterstock

Next year, when a 2022 regulatory change takes effect, nearly 166,000 high- and medium-voltage consumer units will be allowed to migrate to the so-called free energy market, meaning they will be authorized to negotiate contracts directly with electricity suppliers.

This is a huge change. According to the Brazilian Association of Energy Distributors (Abraceel), the free market’s share of the total Brazilian energy distribution market is expected to increase from 37 percent to 50 percent — 10 percent more market share would mean an additional BRL 40 billion (USD 8.2 billion) in an industry worth BRL 160 billion (USD 32.9 billion).

Most Brazilian consumers get their electricity from regional distributors and pay prices set by the National Electricity Agency (Aneel). Prior to a decree by the Mines and Energy Ministry, only large consumer units — such as industries and large companies — with a consumption of more than 1,000 kW (or 500 kW in the case of incentivized renewables) and a monthly cost of more than BRL 140,000 could purchase electricity on Brazil’s free market.

Today, they represent 36,300 consumer units.

High- and medium-voltage consumers are...

Fabiane Ziolla Menezes

Former editor-in-chief of LABS (Latin America Business Stories), Fabiane has more than 15 years of experience reporting on business, finance, innovation, and cities in Brazil. The latter recently took her back to the classroom and made her a Master in Urban Management from PUCPR. At TBR, she keeps an eye on economic policy, game-changing businesses, and people driving innovation in Latin America.