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Brazilian experience in electricity auctions: Comparing outcomes from new and old energy auctions as well as the application of the hybrid Anglo-Dutch design

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  • Rego, Erik Eduardo
  • Parente, Virginia

Abstract

Since 2004, the Government of Brazil (GoB) has acted as an intermediary between distribution and generator companies in the energy procurement sector. The GoB procures energy from generator companies through auctions of long-term energy contracts. After an auction, the winning generator companies sign contracts directly with distribution companies. In particular, the GoB runs two different auctions: one for energy from existing power plants (i.e., old energy) and another for energy from power plants that have not yet been built (i.e., new energy). This paper describes these auctions and compares the outcomes from the old and new energy auctions from 2004 to 2010 using final auction prices. The Brazilian case is particularly interesting, not only because energy is predominantly supplied by hydropower plants but also because new energy auctions reach prices below those for old energy. Therefore, it is likely that it is not necessary to run the two different energy auctions. As a secondary objective, this article analyze whether the Anglo-Dutch hybrid auction model is a better design for electricity procurement in Brazil.

Suggested Citation

  • Rego, Erik Eduardo & Parente, Virginia, 2013. "Brazilian experience in electricity auctions: Comparing outcomes from new and old energy auctions as well as the application of the hybrid Anglo-Dutch design," Energy Policy, Elsevier, vol. 55(C), pages 511-520.
  • Handle: RePEc:eee:enepol:v:55:y:2013:i:c:p:511-520
    DOI: 10.1016/j.enpol.2012.12.042
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:enepol:v:110:y:2017:i:c:p:662-674 is not listed on IDEAS
    2. Daglish, Toby & de Braganca, Gabriel & Owen, Sally & Romano, Teresa, 2015. "Electricity Market Operation: Transitioning from a Free Market to a Single Buyer structure: An econometric analysis of the Brazilian case using a Two-State Markov Switching Model," Working Paper Series 4181, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    3. Malagueta, Diego & Szklo, Alexandre & Borba, Bruno Soares Moreira Cesar & Soria, Rafael & Aragão, Raymundo & Schaeffer, Roberto & Dutra, Ricardo, 2013. "Assessing incentive policies for integrating centralized solar power generation in the Brazilian electric power system," Energy Policy, Elsevier, vol. 59(C), pages 198-212.
    4. repec:eee:rensus:v:77:y:2017:i:c:p:1046-1054 is not listed on IDEAS
    5. Paulo Henrique de Mello Santana, 2015. "Cost-effectiveness as Energy Policy Mechanisms: The Paradox of Technology-neutral and Technology-specific Policies in the Short and Long Term," Working Papers Working Paper 2015-02, Regional Research Institute, West Virginia University.
    6. Almeida, Vinicio de Souza e & Leal, Ricardi Pereira Câmara, 2015. "Análise experimental conjunta do comportamento do investidor em IPOs," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 55(1), January.
    7. de Mello Santana, Paulo Henrique, 2016. "Cost-effectiveness as energy policy mechanisms: The paradox of technology-neutral and technology-specific policies in the short and long term," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 1216-1222.
    8. Ferreira, Jacson Hudson Inácio & Camacho, José Roberto & Malagoli, Juliana Almansa & Júnior, Sebastião Camargo Guimarães, 2016. "Assessment of the potential of small hydropower development in Brazil," Renewable and Sustainable Energy Reviews, Elsevier, vol. 56(C), pages 380-387.

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