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Anticipated energy export model gains traction in Brazil by transforming water surpluses into revenue, reducing operational waste, and alleviating oversupply in the national electrical system, with direct impact on hydroelectric plants and integration with neighboring countries.
The federal government has put a proposal up for public consultation to create a new modality for exporting electricity to Argentina and Uruguay, based on the anticipated sale of hydroelectric surpluses that are yet to be effectively generated.
In this context, the initiative led by the Ministry of Mines and Energy introduces the so-called anticipated turbinable spill, a mechanism that allows for prior negotiation of energy associated with surplus water from reservoirs even before its conversion into electricity.
By transforming a potential surplus into a commercial asset, the measure attempts to provide an economic destination for generation that, at different times in the system, ends up not being utilized due to operational limitations or a lack of immediate internal demand.
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How anticipated electricity export would work
For the operation to occur, the National Electric System Operator will need to identify the possibility of future turbinable spill at participating hydroelectric plants, based on hydrological projections and operational conditions of the system.
In these situations, there is a forecast of sufficient water volume for energy generation, but without guarantee of utilization in the Brazilian market at the most opportune moment, which opens space for anticipated export planning.
Unlike the current model, the new proposal allows for prior organization of the sale of this surplus, replacing the reactive logic that depended on the imminence of the spill to enable negotiations with neighboring countries.
Created in 2022, the current rule authorized exports based on imminent spills, meaning water surpluses predicted for the short term, without a broader planning horizon for commercialization.
Even with limited use, this modality has already resulted in R$ 788.2 million in financial benefit, a value associated with the commercialization of energy that, under other circumstances, might not have been utilized.
Why Brazil wants to anticipate energy sales
The proposal emerges amidst a scenario of increased complexity in the operation of the Brazilian electrical system, driven by the expansion of renewable sources and recurring episodes of oversupply during certain periods of the year.
When generation exceeds the system’s absorption capacity, it becomes necessary to reduce the production of some plants, which directly affects solar, wind, and hydroelectric ventures in different regions of the country.
In the specific case of hydroelectric plants, waste occurs when water needs to be discharged without passing through the turbines, eliminating the possibility of energy generation and, consequently, revenue for the agents involved.
According to Marisete Dadald Pereira, president of Abrage, the advancement of renewables brings a new challenge to the sector, which is not limited to clean generation but requires solutions to prevent energy losses within the system itself.
Still according to the executive, hydroelectric power is usually the first to suffer production cuts, as it allows for faster and more flexible adjustments compared to other available forms of generation.
Role of the South and North regions in the energy strategy
Within the proposal, anticipated export should primarily consider plants located in the South and North subsystems, while the Southeast/Central-West and Northeast remain preserved due to their relevance for national energy security.
This operational logic follows the hydrological cycle of the North, a strategic region for concentrating large hydroelectric plants and exerting direct influence on energy availability throughout the year.
During the period between June and November, when the North faces a drier phase, anticipated export may occur based on the storage levels of the Southern reservoirs.
Conversely, in the interval between December and May, marked by more intense rainfall in the North, the strategy foresees replenishing the Southern reservoirs, increasing generation in the North region and reducing the need for production in the South.
With this, the aim is to balance the use of water resources between different regions, maintaining levels considered safe for internal supply and avoiding additional pressures on the system.
Who can participate in energy export
Adherence to the new model will be voluntary and will depend on the interest of hydroelectric generators, who may choose to participate in early commercialization according to their operational and commercial strategies.
Excluded from the proposal are plants operating under a quota regime, whose energy is destined for the regulated market, as well as Itaipu Binacional, which will not be included in this export modality.
In the institutional design, the Electric Energy Commercialization Chamber will be responsible for conducting commercial procedures, while the ONS will remain responsible for evaluating the technical and energy conditions of the system.
In recent years, large generators have been advocating for the creation of this mechanism, arguing that Brazil could have better utilized its hydroelectric surpluses in international negotiations.
While the public consultation remains open for contributions, the government is evaluating adjustments before a final decision on the implementation of the measure within the regulatory framework of the electricity sector.
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