Brazil launches mechanism to export energy to Argentina and Uruguay

On Monday, October 10, Brazil’s Chamber of Electric Energy Commercialization (CCEE) and the National Electric System Operator (ONS) made available a new mechanism for exporting energy to Argentina and Uruguay, by which agents will be able to monetize the energy sold abroad.

The new mechanism replaces the so-called “energy barter” with the export of energy from Brazilian hydroelectric power plants during the wet period (from May to August) and its return during the dry period (from September to November).

On September 23, the Ministry of Mines and Energy published a decree authorizing the application of the new model.

This type of export will be used when there is excess water in Brazilian hydroelectric power plants, allowing the energy use of the reservoirs.

According to the president of CCEE’s Board of Directors, Rui Altiere, the model is “a profitable alternative for the use of water that would be spilled.”

“The transaction will be made if there is supply in Brazil and will depend solely and exclusively on a favorable hydrological scenario, with the discharge of water from the power plants, as the name of the mechanism says, and a demand from the neighboring country,” Altiere said in a CCEE statement.

The money obtained from the export will be destined for the Energy Reallocation Mechanism (MRE), a kind of “condominium of power plants”.

For his part, Luiz Carlos Ciocchi, general manager of ONS, said in the same statement that the adoption of the commercial export is an example of the evolution of possible mechanisms that can be implemented in the Brazilian electricity sector in search of an optimized and more flexible operation.

“We are quite optimistic that this energy exchange model will yield positive results for Brazil and neighboring countries,” it said.

The entities stated that the operation might allow for a reduction in the plants’ operating costs and, consequently, in the medium term, a reduction in the charges levied on consumer tariffs.

With information from Xinhua