PESD runs workshop for Brazil's electricity regulator

dsc 9012 tratada PESD Director Frank Wolak and Associate Director Mark Thurber leading ANEEL workshop in Brasilia, Brazil in December 2018.

Program on Energy and Sustainable Development (PESD) Director Frank Wolak and Associate Director Mark Thurber conducted a workshop on December 3-4 in Brasília, at the offices of Brazil's electricity regulator ANEEL. Regulatory staff used PESD's energy market game to explore what it would mean for the country to move from a cost-based to a bid-based electricity market. Brazil's electricity supply is dominated by hydroelectric power, and a shift to a bid-based market could help the country manage variable hydro output. At the same time, regulators have to make sure the incentives of participants in a bid-based market are set so they align with desired social outcomes. By playing the roles of generating companies in the energy market game, regulators at ANEEL gained a deeper understanding of what these incentives would be under different market configurations -- and specifically, the workshop examined the relative strengths and weaknesses of capacity markets and forward contracts as mechanisms for ensuring resource adequacy in a high-renewables world.