Brazil’s free power market forecast to grow 1pp annually

The free or non-regulated electricity market in Brazil is expected to grow by around one percentage point per year through 2030, reaching 47% of the total power load by the end of the decade, according to a study by Thymos Energia obtained exclusively by BNamericas.   

The consultancy predicts that by 2024, the free market will account for 38% of the country's consumption.

Orange shows current free market consumption, light orange migration of high-tension consumers, gray migration of low-tension consumers and light gray current regulated market consumption.

The federal government is working to ensure that low-tension consumers have access to the free energy market by the end of this decade.

Mayra Guimarães, head of prices and market studies at Thymos, said the 1pp rise might not seem like much in terms of energy volume, but in terms of new customers, it's a very significant increase. 

She recalled that in January, all consumers connected to high voltage became eligible to migrate to the free market, which opened up the non-regulated environment for around 180,000 potential new customers. 

"They are smaller customers, with lower consumption. So although the growth in terms of consumption is small, in terms of new customers it should be significant," Guimarães told BNamericas.  

The level of adherence of this new eligible market to migrating to the free environment could change the scenario projected by Thymos. Potential new customers are smaller, scattered around the country, and often unfamiliar with the free market and the savings possibilities it offers. 

"This scenario creates challenges for these new consumers to join, which will require a greater commercial effort on the part of retail energy market agents," said the consultant. 

OVERVIEW 

According to data from the local energy traders’ association Abraceel, 40,578 consumers were in the free market this March, up 28% from the same month last year. 

In March, energy consumption on the free market totaled 26,234MWa, or 36% of all electric power consumed in the country. 

According to Brazil’s electricity trading chamber CCEE, the easing of the criteria for access to the free market in January has accelerated the pace of consumer migrations significantly. 

In the first quarter of this year, 5,360 new consumers joined the segment, more than the total number in all of 2022. The free contracting environment ended March with 43,540 units, 10,000 more than at the same time in 2023.

Around 72% of subscribers have adopted the retail modality; that is, they are represented by a retail supplier responsible for facilitating customer entry, managing day-to-day contracts and taking on the risks inherent in buying and selling electricity.

According to the CCEE, the free market currently accounts for 38% of Brazil's total electricity consumption and should continue to grow in the coming months. 

According to data from electric power watchdog Aneel, approximately 19,300 consumers have informed distributors of their desire to migrate to the free energy market in 2024, in addition to 650 requests for 2025. 

The southeastern and southern states led the ranking of migrations to the free market in the first quarter of 2024. São Paulo tops the list with 1,731 new consumers in the environment, followed by Rio de Janeiro (563) and Rio Grande do Sul (480).

Among the 15 branches of activity monitored by the CCEE, retail stands out with 1,544 migrations in the period, services with 1,328 and miscellaneous manufactured goods with 642.