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Integrating competition and planning: A mixed institutional model of the Brazilian electric power sector

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  • Bajay, S.V.

Abstract

During the past decade, the Brazilian electric power sector went through similar institutional changes taken place in both developing and developed countries. The main goals for such changes were to inject competition into the generation and supply links of the sector's production chain and to reduce public debt via privatization of state-owned utilities that dominated the pre-reform sector. This paper discusses why these changes took place in Brazil and explains why the results of the reform model implemented by the previous federal administration were unsatisfactory. The current federal administration has substantially altered the prior model, aiming to remedy insufficient private investment in new power stations that caused a serious power shortage in 2001. The paper addresses the main characteristics of the new model, which implements (a) public biddings of new power plants for all distribution utilities in the country, and (b) forward planning of optimal commissioning times and capacity of new plants. The paper ends with a discussion of the potential benefits and drawbacks of the new scheme and the role of the regulator in the early stage of the ongoing transition in the Brazilian electrical power industry.

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  • Bajay, S.V., 2006. "Integrating competition and planning: A mixed institutional model of the Brazilian electric power sector," Energy, Elsevier, vol. 31(6), pages 865-876.
    • Handle: RePEc:eee:energy:v:31:y:2006:i:6:p:865-876
    DOI: 10.1016/j.energy.2005.10.004
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    1. Baer, Werner & McDonald, Curt, 1998. "A Return to the Past? Brazil's Privatization of Public Utilities: The Case of the Electric Power Sector," The Quarterly Review of Economics and Finance, Elsevier, vol. 38(3, Part 1), pages 503-523.
    2. Raffaella Lisbôa Mota, 2003. "The Restructuring and Privatisation of Electricity Distribution and Supply Business in Brazil: A Social Cost-Benefit Analysis," Working Papers EP16, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    3. Mota, R.L., 2003. "The Restructuring and Privatisation of Electricity Distribution and Supply Business in Brazil: A Social Cost-Benefit Analysis," Cambridge Working Papers in Economics 0309, Faculty of Economics, University of Cambridge.
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    Cited by:

    1. Dantas, Guilherme de A. & de Castro, Nivalde J. & Brandão, Roberto & Rosental, Rubens & Lafranque, Alexandre, 2017. "Prospects for the Brazilian electricity sector in the 2030s: Scenarios and guidelines for its transformation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P2), pages 997-1007.
    2. Bradshaw, Amanda, 2017. "Regulatory change and innovation in Latin America: The case of renewable energy in Brazil," Utilities Policy, Elsevier, vol. 49(C), pages 156-164.
    3. Almeida Prado, Fernando & Athayde, Simone & Mossa, Joann & Bohlman, Stephanie & Leite, Flavia & Oliver-Smith, Anthony, 2016. "How much is enough? An integrated examination of energy security, economic growth and climate change related to hydropower expansion in Brazil," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 1132-1136.
    4. Mathias, Melissa Cristina & Szklo, Alexandre, 2007. "Lessons learned from Brazilian natural gas industry reform," Energy Policy, Elsevier, vol. 35(12), pages 6478-6490, December.
    5. Pinto, Cláudio P. & Walter, Arnaldo, 2011. "The potential contribution of thermo power plants in the Brazilian electric sector," Energy, Elsevier, vol. 36(6), pages 3667-3674.
    6. Mehmet Ugur & David Sunderland (ed.), 2011. "Does Economic Governance Matter?," Books, Edward Elgar Publishing, number 14356.
    7. Dantas, Guilherme A. & Legey, Luiz F.L. & Mazzone, Antonella, 2013. "Energy from sugarcane bagasse in Brazil: An assessment of the productivity and cost of different technological routes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 21(C), pages 356-364.
    8. Dutra, Ricardo Marques & Szklo, Alexandre Salem, 2008. "Incentive policies for promoting wind power production in Brazil: Scenarios for the Alternative Energy Sources Incentive Program (PROINFA) under the New Brazilian electric power sector regulation," Renewable Energy, Elsevier, vol. 33(1), pages 65-76.
    9. Cláudio de Araújo Wanderley & John Cullen & Mathew Tsamenyi, 2011. "Electricity Sector Reforms and the Tariff Review Process in Brazil," Chapters, in: Mehmet Ugur & David Sunderland (ed.), Does Economic Governance Matter?, chapter 10, Edward Elgar Publishing.

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