Keywords: Brazil, electricity generation, electricity supply, restructuring, electricity reform, public auctions, power industry
The second reform of the Brazilian electric sector
The Brazilian electric sector went through a redesign of its structure in the mid-1990s. This reform initiated a transition to a more competitive environment in the generation and supply of electricity with a wider participation of private companies. The rationing of electricity in 2001/2002 interrupted this process. In the second reform of the Brazilian electric sector, after the rationing, the state took back the coordination of the sector as means to pull back any possibility of new rationing and also to make the tariffs as low as possible. The electricity trade was concentrated on a pool of distributors in a scheme of public auctions. This paper briefly explains the two reforms and analyses the results of those auctions. We estimate that the Brazilian electric sector is still vulnerable to adverse hydrology periods. In other words, the goals of the new model designed for the Brazilian electricity sector have not been achieved.