Brazil: 56% of industries want to migrate to the free energy market

More than half of the industries want to migrate to the free energy market from January 2024, according to a survey by CNI (National Confederation of Industry) released on Friday (Feb.3, 2023).

They are 56% of the companies that are today in the captive market in high voltage.

In September 2022, the government published a decree that opened the market for group A consumers in voltages higher than 2.3 KV (kilovolts).

It had already been possible to buy energy on the free market since 1996, but only for those who consumed loads of more than 1,000 kW (kilowatts) – 500 kW, in the case of renewable sources with incentives.

The decree opened the market to all industries in high voltage, regardless of the load consumed, as of January 1, 2024.

The CNI survey with 2,016 small, medium and large companies shows that 59% of large companies buy energy directly from the producer or trader in the free market.

Among medium-sized companies, 25% are in the free market. The percentage falls to 6% among small companies.

The companies that use the captive market – that is, buy from the local power distributor – are 57% of the medium-sized companies and 70% of the small ones.

“The moment is for these companies to prepare for the migration. 2023 will be a year to study the market, plan, and calculate the viability of entering the free market.

The estimate is that 45,000 industries can migrate starting in 2024,” said CNI’s energy specialist, Roberto Wagner Pereira.

CNI estimates a potential 15% to 20% reduction in the companies’ electricity bills by joining the free market.

Electricity is the main energy input for the industry.

According to the confederation, 78% of the companies use electricity, followed by diesel oil (4%), natural gas (4%), firewood (3%), and sugarcane bagasse (2%).

More than 70% of the companies said they would feel the impact of higher energy tariffs in 2022.

According to the survey, energy expenses have meant an increase of 13% in the total cost of production in the last 12 months.

In that order, the increase ranges from 12% for large companies to 14% and 15% for medium and small companies.

The industries also felt the impact of the increase in other energy inputs, which represented an average increase of 22% in the cost of production.

The most affected was the extraction industry, which saw the price of diesel increase in freight costs.

With information from Poder360

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