Proposal for the electricity sector
The modelling of the Brazilian electricity sector is based on a “calendar”. I mean all activities have established schedules.
This system is very good because it provides predictability in relation to activities, deadlines and responsible parties.
There is an opportunity though, that could be captured if there is a flexibility in contracting energy from distributors to their regulated customers. If they had the permission/obligation to close new power supply contracts, for future delivery when the market offered special prices.
Thus, futures prices would have a tendency to decrease since distributors would permanently monitor price offers and close new contracts when a very “sexy” price appears.
To compare, currently, the purchase of new volumes is made on specified dates, regardless of whether the prices are attractive or not!
I’ve been using this thesis for over 20 years for deregulated energy users and they were able to make huge savings!
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