EN 
PT_BR 
Companies of different sizes are taking advantage of low energy prices in the Free Energy Market to formalize supply contracts with longer terms. This is what data released this week by the energy business platform shows BBCE (Brazilian Energy Trading Counter).
According to Marcelo Bianchini, Manager of Products, Communication and Marketing at BBCE, of the total contracts negotiated from January to June, 41.6% of the volume expires after 2024 and 62.6% involve annual products. This behavior is explained by the favorable hydrological scenario that has brought down prices on the free market.
In July 2021, at the height of the water crisis, the PLD (Difference Settlement Price) reached the ceiling of R$ 583.88/MWh. From that month onwards, the PLD entered a downward trajectory and since October 2022 it has been at the floor (R$ 55.70/MWh in 2022 and R$ 69.04/MWh in 2023).
Leonardo Lopes, founding partner and commercial director of Simple Energy, said that the expectation is that the PLD will remain at the floor throughout 2023 and 2024. According to him, in addition to full reservoirs, there is a set of factors that contribute to this scenario, such as the increase of installed capacity at 16 GW - considering new developments in the free and regulated market -, the low growth in load (an average of 2.7 GW between 2023 and 2024) and the massive entry of distributed solar generation systems.
O PLD represents the energy cost at the short term market and serves as a reference for energy contracts in the free market.
Due to the minimum PLD, the financial volume traded on BBCE in the first half of the year totaled R$ 14 billion, a drop of 24.3% compared to the same period in 2022.
Increases the search for incentivized energy
According to a BBCE survey, another trend seen in the market is a greater consumer demand for incentivized energy, consisting of wind, solar, biomass and PCHs (small hydroelectric plants).
By law, these plants can sell energy on the free market by offering the customer a discount (which can reach 100%) on the cost of transporting the energy, technically called Tariffs for the Use of the Transmission and Distribution System (TUST/TUSD).
However, many companies seek energy encouraged not only by cost – as this energy tends to be more expensive than conventional energy (thermal and hydroelectric) – but also by the environmental commitment that these companies seek to demonstrate in their sustainability reports.
BBCE closed the first quarter with 159 thousand gigawatt-hours traded on the platform, an increase of 21% compared to the volume traded in the same period of the previous year. Incentive energy products were the highlight of the semester: 25.8 thousand GWh were traded, an increase of 155% compared to the same period last year. “Since 2022 we have observed a significant increase in these businesses, intensified throughout the first half of 2023”, explains Bianchini.
According to Lopes, incentivized energy is being sold below R$ 100/MWh for contracts with supply in 2024. “Conventional and incentivized energy prices for the year 2024 are currently being negotiated in the order of R$70/MWh and R$105/MWh, respectively, with no expectations of major variations throughout 2023 and 2024. Just remembering that the minimum PLD for next year will only be released in December 2023, bringing some accommodation to current market prices if there is a substantial change in its base calculation, which should not happen.”
