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Market Concentration: challenges in the Free Contracting Environment (ACL)
A recent study carried out by the energy technology and management company Green Ant, based on data from the Electricity Trading Chamber (CCEE), revealed a worrying scenario of market concentration in the retail Free Contracting Environment (ACL). The analysis shows an advanced process of oligopolization, with distributors exerting strong influence over retail traders, dominating concession areas.
Dominance of distributors in the free energy retail market
The study points out that the retail traders linked to large distributors are conquering a significant share of the market in concession areas. In some cases, as in the state of Amapá, a retail trader linked to the distributor holds up to 100% of the free energy retail market contracts. Furthermore, in areas such as the concession of EDP SP, EDP itself holds 61% of the free retail market, demonstrating a high degree of influence.
The study also highlights that the independent retailers, not linked to the same economic group as the distributors, tend to spread their areas of activity more widely. However, distributors like copel, which controls both the Paraná distributor and the retailer with the same commercial name, concentrate a large part of its customers in its concession areas.
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Challenges and need for regulation
Pedro Bittencourt, CEO of GreenAnt, emphasizes the importance of a competitive and dispersed environment in the free energy market. He highlights that competition is essential to stimulate innovation and guarantee better services at competitive prices. Bittencourt warns that the lack of competition could compromise the development of the free energy market, going against best international practices.
Bittencourt also highlights the need for intervention by regulatory bodies to address this problem. He highlights that reference countries in the energy transition, such as the United Kingdom, have invested in digitalization and market deconcentration. The CEO of GreenAnt warns that Brazil risks losing the opportunity to build a competitive free energy market if it does not urgently address this issue.
The study data were obtained from a CCEE report for the month of January, when the market opened for medium and small companies in medium voltage. However, Bittencourt regrets that the CCEE decided not to publish this data from April onwards. He highlights the importance of transparent access to information to guarantee a regulated and competitive environment in the free energy market, where the consumer is the protagonist.
Source: press office/GreenAnt.
