N5X, a new electricity trading platform in Brazil, is scheduled to begin operations in the second quarter of this year. Until then, generators, distributors, financial institutions and energy traders can now register.
N5X offers participants in the Free Energy Market the opportunity to formalize energy contracts within the platform, which promises to bring more security and agility to negotiation processes between customers and suppliers.
According to Dri Barbosa, CEO of N5X, the objective of the new exchange is to boost the energy market. “We want to increase liquidity in the Brazilian energy market, following the evolution that already liberalized countries have undergone. We listened to the market, sought the best trader experience and developed the new N5X platform, which facilitates and provides more security and transparency to negotiations”, says the executive.
N5X has the support of shareholders such as Venture Builder, an independent investment fund from B3, and Nodal (American subsidiary of the EEX Group, the largest energy exchange in the world).
The platform arrives at a time of expansion of the Free Energy Market. Since January 1st, all medium and high voltage consumers have the possibility to choose their energy supplier. In the first two months of this year, almost 4 thousand companies have already migrated to Mercado Livre, which is equivalent to 52% of the volume of entries registered throughout last year.
One of N5X's objectives is to become a clearing house, acting as a central counterparty in energy transactions. This will represent a true innovation in Brazil, bringing the financial market closer to the electricity sector. However, the company clarifies that this step is still subject to a long regulatory journey with entities such as the CVM (Securities Commission) and the Central Bank, which could take up to two years.
“In conversations with the market, we realized how interested global players are in having new asset classes. For this, it is necessary to have a market with on-screen trading, standardized contracts, financial instruments and a central counterparty”, says Dri Barbosa.
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