By: Leonardo Neri

In January 2021, a new way of calculating the price of electricity came into force, motivated by the strong expansion in production and the change in the electricity matrix, which gained other intermittent sources and created the need for greater precision in the price formation mechanism.

According to the 2029 Ten-Year Energy Expansion Plan (PDE 2029), prepared by the Energy Research Company, the state planning agency for the Brazilian energy sector, the share of solar energy is expected to jump from 2% in 2019 to 8% in 2029. Furthermore, in the next 10 years, the share of wind energy will increase from 9% to 16%. Therefore, the advancement of other energy sources becomes evident.

Therefore, there was a change in the Settlement Price of Differences (PLD), affecting, firstly, free market consumers – those who have large consumption, such as industry and part of commerce, and choose to negotiate contracts directly with free market agents.

The PLD is the reference value used by the Electric Energy Trading Chamber (CCEE) to price the difference between the amount formalized in the electricity sector contracts and the actual energy consumption, that is, it is through the PLD that the CCEE defines how much free agents must pay when the amount of energy actually used is greater than that provided for in the registered contracts.

The PLD determines short-term market prices, the basis for the free energy market, and the price reference for contracts established in the Free Contracting Environment.

Previously, the weekly PLD price was adopted, where the calculation was made on Fridays and then the PLD was published, which was maintained until the following week. With the change from the weekly PLD to the hourly PLD, the price is now calculated daily, valid for the 24 hours of the following day and is published every hour.

The objective of adopting the hourly PLD is to bring greater reality and precision between the costs of operating the system and the energy prices to be defined by the Energy Trading Chamber (CCEE), based on data from the National System Operator (ONS).

Furthermore, Hourly PLD is a global trend, already being used in several countries around the world and, in some countries, the pricing model is calculated in minutes.

With the change in pricing, it can be said that among the advantages is the reduction of System Service Charges (ESS), since this difference between projection and reality is borne by all consumers; incentive for energy storage by taking advantage of the hourly variation, storing at times of low PLD and delivering at times of high PLD.

Furthermore, with greater precision regarding the times when energy is more or less expensive, consumers are encouraged to be more flexible with their energy use, reducing the load during more expensive periods with higher consumption, which is beneficial not only financially, as the model also contributes to reducing stress on the system during times of high consumption.