What is a Captive Consumer?

What is a Captive Consumer?

  • It is a consumer that is not free to purchase power directly from generators or power traders, not satisfying the criteria which defines a Special Consumer or a Free Consumer. The captive consumer is obliged to buy energy directly from the distributor to which his installation is connected, the tariffs for which are regulated by the National Electric Energy Agency - ANEEL.

What is Energy Trading?

  • Trading incorporates the buying and selling of electricity in the free negotiation market.
  • As an autonomous activity, energy trading is subject to a competitive environment, in which a range of different entities can take part. Among these are generators acting in the form of a public service or as an independent producer, as well as the trading entities and/or energy importers.
  • Differently from rendering distribution and transmission services, the tariffs of which are regulated, in the case of electric energy trading, prices are negotiated freely in line with market conditions.

What is the function of the National Electric Energy Agency - ANEEL?

  • The National Electric Energy Agency (ANEEL) is the regulatory and supervisory body for all generation, transmission, distribution and energy trading activities. It is also responsible for the settlement of disputes between consumers and market entities, for the ratification of tariff readjustments and for the concession, permission and authorization of power installations and services. For more information, see http://www.aneel.gov.br/.

What is the National System Operator - ONS?

  • The National System Operator (ONS) is the body responsible for the coordination and control of the operation of the electric power generation and transmission installations of the National Interconnected System (SIN), under the supervision and regulation of ANEEL. For more information, see http://www.ons.org.br/.

What is the National Interconnected System - SIN?

  • The National Interconnected System – SIN represents the complex of generation, transmission and distribution installations which interconnect in a grid. The SIN links the majority of the Brazilian plants, attending more than 95% of all power demand from final consumers. Current information on the SIN and its component plants can be found in the ONS and ANEEL websites:http://www.ons.org.br/ and http://www.aneel.gov.br/.

What are the Transmission Companies?

  • These are the public service concessionaires responsible for carrying electric power via the transmission lines from the generators to the distributors.

What is a Self-Producer?

  • This is a company which has obtained a grant or authorization to build and operate an electricity generation plant from the granting authority with the principal objective of producing and consuming its own energy in its production operations. Originally the self-producer needed to consume all its energy, not being permitted to trade any amount of its underlying energy for sale with third parties. However, it enjoyed the benefits of not paying some of the energy charges which the other consumers pay such as for example, the Energy Development Account (CDE) and the Program for Incentive to the Alternative Electric Energy Sources (PROINFA). Over time, the differences between the Self-production and Independent Production have almost disappeared: on the one hand, the self-producer has the freedom to trade any surplus power with Free Consumers, Traders and other Generation Entities and on the other, the Independent Producers also benefit from exemption from the above mentioned charges when they allocate power to entities in their controlling group.

What is the Electric Power Trade Board - CCEE?

  • This is the institution which is responsible for registering energy buying and selling operations, ranging from activities for measuring energy generated and effectively consumed to financial settlement and accounting of power purchase agreements in the short term market. The Trade Board also promotes auctions of power under the delegation of ANEEL. For more information go to http://www.ccee.org.br/.

Electric Power Trade Board - CCEE
What is the Basic Network?

  • The basic network is part of the National Interconnected System (SIN). It comprises all the substations and transmission lines with voltages equal or in excess of 230 kV. It is equivalent to the federal highway network of the Brazilian road system by interlinking regions and states. The operation and expansion of the Basic Network are coordinated on a centralized basis by the ONS. For more detailed information, please see http://www.ons.org.br/.

What are the Distribution Companies?

  • The distribution companies – or distributors – are public service concessionaires which have exclusivity in delivering energy to all end consumers – whether residential, commercial, industrial or public – connected at voltages of less than 230 kV and located in the distributor’s concession area. It is important here to make a distinction: while energy delivery is the exclusive responsibility of the distributor, a range of consumers – the so-called Free Consumers and Special Consumers – can choose the source of their contracted energy, acquiring it directly from the generation or energy trading companies.

What are the Generation Companies?

  • These are companies responsible for the production of electric power. The older plants were granted to these companies under the generation public service concession agreement model. Currently, all the grants are made under the concession agreement for use of public property for generation model.

What is a Free Consumer?

  • Free  Consumers are typically major industries. The Free Consumer is one which has a contracted demand equal or more than 3 average MW from its distributor. If the connection was made prior to July 7, 1995, there is the additional requirement that the consumer must be supplied at a voltage equal to or more than 69 kV. The consumers which are classified as Free Consumers, but which still have not exercised the option of acquiring power directly from Generators or Traders and continue as consumers captive of the distributors, are known as Potentially Free Consumers.
  • Previously, the commercial relationship of the Potentially Free Consumer with the Distributor was formalized in a single agreement (called the Energy Supply Agreement). This agreement established both the remuneration of the distribution network placed at the disposal of the consumer as well as the energy periodically consumed. Currently, ANEEL regulations stipulate that all Potentially Free Consumers have two agreements, independent of one another: one setting out the conditions for use of the distribution network (known as the Agreement for Use of the Distribution System or CUSD) and the other for establishing the conditions for the purchase of electric power (called the Regulated Energy Purchase Agreement, or CCER). Although apparently merely bureaucratic, this division provides greater transparency to costs and allows the Potentially Free Consumer to accelerate energy purchases directly from the Generators or Traders, should this be deemed convenient.
  • Call ENGIE to check if your company fulfills these conditions. We have a specialized team for analyzing if advantageous for your company to acquire the energy from a Generator. Such analysis is free of charge.

What is a Special Consumer?

  • The Special Consumer is typically a small to medium-sized industry, a large commercial operation (such as a shopping center, for example), or again a chain of stores which together reach a given level of consumption. Whether in isolation or representing a series of consumers, the Special Consumer is one with a contracted demand equal or in excess of 0.5 average MWm with a Distributor and supplied at a high voltage (2.3 kV or above). The Special Consumer has the choice of acquiring its power from incentivized sources such as biomass, small hydro plants, solar and wind energy plants, either directly from the Generators or through the electric power traders.
  • Call ENGIE to check if your company fulfills these conditions. We have a specialized team for analyzing if advantageous for your company to acquire the energy from a Generator. Such analysis is done free of charge.