Analysis of hourly price granularity implementation in the Brazilian deregulated electricity contracting environment |
| |
| Affiliation: | 1. Economic College, Hunan Agricultural University, Changsha, 410125, PR China;2. Department of Economics and Finance, College of Business Administration, Taif University, Saudi Arabia;1. University of Verona, Department of Business Administration, Verona, Italy;2. University of Padova, Department of Industrial Engineering, Padova, Italy;1. Dipartimento di Scienze dell''Economia, Università del Salento, Via Monteroni 6, Lecce LE, 73100, Italy;2. Dipartimento di Management, Finanza e Tecnologia, Strada Statale 100 km 18, Casamassima BA, 70100, Italy;1. Harvard Kennedy School of Government, Harvard University, Cambridge, USA;2. ECERA (Ecological Economics Research for Action), Bucharest, Romania;3. School of Public Policy and Global Affairs, University of British Columbia, Vancouver, Canada;1. Institute of Applied Economic Research – IPEA, Av. Pres. Antônio Carlos, 51 - Centro, Rio de Janeiro, Brazil;2. Energy Planning Programme – COPPE/UFRJ, Cidade Universitária, CT - Bloco C-211, Rio de Janeiro, Brazil;3. Federal Rural University of Rio de Janeiro, Rodovia BR-465, Seropédica, Rio de Janeiro, Brazil;4. Rio de Janeiro State University – UERJ, Rua São Francisco Xavier, 524, Maracanã, Rio de Janeiro, Brazil |
| |
| Abstract: | Brazil’s electricity market is the largest in Latin America and the ninth largest in the world. It has been implemented as a mixed market in which regulated and deregulated contracting environments coexist. The volume of transactions in the deregulated market has experienced steep growth over the last few years and is expected to surpass the regulated market. Different programs to diversify the country’s energy matrix have been devised, especially by integrating intermittent renewable sources to address the deregulated market expansion. Consequently, such an energy policy path has prompted the need to increase the granularity of the Brazilian deregulated market’s spot price, namely the Difference Settlement Price (DSP). The DSP had been weekly defined accounting for three loading levels and four submarkets, and, as of 2021, it has been hourly defined accounting for four submarkets; the weekly DSP is inefficient in actually signaling prices based on ex-ante marginal cost of operation of the interconnected Brazilian power system. Besides such granularity alteration, Brazil has also undergone a severe hydrological crisis in 2021 that led to significantly lower water inflows into major hydrographic watersheds and, as a result, most hydroelectric power plant reservoirs hit a 91-year low. The described scenario is relevant in utility policies and energy economics since it depicts a significant paradigm shift experience in such a large electricity market. This study presents the first hourly DSP behavior analysis since its implementation in the Brazilian electricity market and explores its statistical characteristics and relationships with exogenous variables throughout 2021. Additionally, we discuss the hourly DSP’s volatility observed in the year 2021 and how it has resulted in price spikes. At last, we compare the behavior of the Brazilian hourly DSP with the energy prices of five other countries’ electricity markets. Despite being a significant market improvement, the DSP granularity increase per se could not accurately represent the actual marginal cost of operation over the year 2021 since, besides instabilities observed in the hourly DSP, market intervention mechanisms had to be applied by Brazilian regulatory agencies to minimize the hydrological crisis’ impacts. |
| |
| Keywords: | Brazilian electricity market Deregulated electricity market Electricity hourly price Power system economics Hydrological crisis |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
