Flash Energy expects to migrate 300 consumer units to the free market

Brazilian energy trader Flash Energy expects to migrate 300 consumer units to the free (non-regulated) market next half, CEO Tânia Reis told BNamericas. 

The increase in demand from regulated market consumers comes in the wake of the opening up of the free market to all high-voltage customers, the so-called group A, from January 2024.

According to calculations by electricity trader association Abraceel, around 165,000 consumer units have been able to migrate since then. 

Launched in 2018, Flash received authorization from regulator Aneel in 2021 to sell energy, and has since sold 1,740,883MWh.

Although it has its base of operations in the center-west of the country, Flash Energy plans to expand to other states, including opening offices in Rio de Janeiro and São Paulo.

Its client portfolio is diverse, ranging from hospitals and industries to agribusiness. 

Those who are not yet able to migrate to the non-regulated environment, such as low-voltage group B customers, are able to buy energy from distributed generation plants through a subscription system offered by Flash. 

The outlook is positive, considering that the free market is expected to open up completely to rural and commercial consumers in 2026, and residential consumers in 2028. 

Reis said that there is still a lack of awareness among those who can migrate to the free market. “There's fear, for example, of a supposed risk of power shortages. I think that total openness will require massive publicity work by Aneel and the government,” she said.  

By migrating to the free contracting environment, consumers have access to lower prices, not only because of competition – in the regulated market, only the local distribution concessionaire operates – but also due to access to incentivized sources like solar and wind. 

Reis believes that energy prices will rise in the coming months, due to the less humid summer, but not significantly. “And if it rains at the end of the year, they should remain low in 2025, which favors migration to the free market,” she said. 

One of the main concerns with the opening up of the free market is the over-contracting of energy by distribution concessionaires. 

These companies buy energy in regulated auctions to ensure supply to consumers in the regulated market, but this base has been shrinking with the increase in migration and the expansion of distributed generation (DG). 

“In recent years there have been fewer auctions, so this risk of over-contracting has been mitigated. And this year we'll have auctions again, which indicates an improvement in this situation,” said Reis. 

Bills like PL 414, on electricity sector modernization, are being processed in congress. The initiatives aim to make a sustainable opening possible, while preserving the balance between the two markets. 

Another concern is cost equality between the free and regulated environments, since it is the latter that guarantees the ultimate security of the system by contracting hydroelectric and thermoelectric energy.  

“Perhaps this bill will reach the free market, but the free market also pays charges. We'll have to look into issues of subsidies for solar power plants, DGs, etc. But the fact is that the right way to reduce power rates is to open up the market to everyone,” Reis said.