ABRACEEL (Brazilian Association of Energy Trading Companies) released a statement to the press reinforcing the need for companies in the sector to fully honor their contracts with their counterparties.
This positioning comes at a challenging time for the marketing segment, marked by legal disputes involving the review or intervention in contracts signed between agents or with consumers.
The message, signed by Wilson Ferreira Jr. and Rodrigo Ferreira – Chairman of the Board and CEO of the entity – emphasizes that full respect for contracts is a fundamental and non-negotiable premise for the functioning of the Free Energy Market.
"Regarding the current situation, ABRACEEL publicly reiterates its commitment to market security and full respect for the contracts entered into, fundamental and non-negotiable premises for operating in the Free Electricity Market. Any action to the contrary, regardless of the reasons, does not have the support or approval of ABRACEEL," the entity stated in a note.
One of the practices that has generated concern in the sector is the so-called energy haircut – when energy delivery occurs under conditions different from those originally agreed upon, whether in terms of schedule, modulation, or submarket.
The Brazilian electricity system is divided into four submarkets (North, Northeast, Southeast/Central-West, and South), in which significant price differences can occur. Changes in these contractual conditions can therefore generate significant economic impacts for the parties involved.
According to a report by the Brazil Journal, Tradener was one of the companies that obtained a court ruling to change the energy delivery schedule in contracts with clients. This measure sets a significant precedent by allowing delivery based on a solar generation profile, concentrated during the day when prices are lower, which could leave consumers exposed to peak demand during nighttime hours.
Recently, the IBS Energy Group filed for bankruptcy protection to maintain its operations in the energy market while navigating a period of economic and financial imbalance.
The company joins a group of other energy trading companies, such as 2W Ecobank, Gold, Eletron, Boven Varejista, Tradener, América and Electra, which are experiencing difficulties in honoring their contracts in the Free Market due to a broad sectoral crisis characterized by price instability, credit restrictions, deteriorating liquidity and increased contractual risk.
Trading companies argue that the current scenario stems from structural changes in the electricity sector, especially in the dynamics of price formation. From 2025 onwards, this movement has put pressure on the stability of contractual relationships in the free market.
According to analysts, the adoption of more conservative assumptions in the models and greater sensitivity to risk have made prices significantly more volatile.
Furthermore, there is a reduction in the supply of available energy, as generators face limitations in commercialization due to curtailment scenarios and hydrological restrictions. The crisis in energy trading companies has also led generators to restrict operations with smaller companies, reducing market liquidity and hindering the restructuring of contracts.
IBS Energy Group is yet another energy trading company to file for bankruptcy protection.
Check out the full text of the Abraceel statement:
The electricity trading market is going through a challenging period, with legal actions underway seeking intervention in contracts signed between counterparties or with consumers.
Regarding the current situation, the Brazilian Association of Energy Traders (Abraceel) publicly reiterates its commitment to market security and full respect for contracts entered into, fundamental and non-negotiable premises for operating in the free electricity market. Any action to the contrary, regardless of the reasons, does not have the support or approval of Abraceel.
The Association remains committed to structuring actions that contribute to improving market security, whether through regulatory actions within the scope of Aneel, such as prudential monitoring, or through internal actions, such as offering all Associates the Risk Center and the inclusion of self-regulation activity, already approved at the Associates' Assembly.
Within the scope of the Risk Center, also in April, all Associates will have access to an online platform developed in partnership with the credit bureau specializing in the electricity market, Risk 3, for monitoring 17 metrics related to market counterparties, significantly improving the quality of the information provided.
Self-regulation, currently being implemented, introduces, in a complementary way to regulation, a set of rules and conduct that must be followed by the Associates, including the application of sanctions to the practice of haircutting, under the supervision of a dedicated area and a Council formed mainly by external and independent members.
The Association strongly supports and has requested that Aneel prioritize the definitive regulation of prudential monitoring, which should be followed by the regulation of the sanctioning process and financial guarantees for electricity purchase and sale transactions.
Abraceel reaffirms its commitment to the development of the market that has guided its activities representing the energy trading segment for the past 25 years.
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