The USP of the free energy market, what is it anyway? USP Magazine

aAfter being paralyzed during the pandemic, the Free Energy Market Migration project resumed in 2021, always with the support of the Rectory. After much work and many hurdles overcome, including the collaboration of people outside USP, many of whom are former students, the project is in its final stage. This change will bring significant benefits to the USP, the main ones being savings of approximately 20% in total value and improving sustainability indicators.

In terms of performance, the Brazilian energy market is divided into two parts: the regulated market (ACR – Regulated Contracting Environment) and the free market (ACL – Free Contracting Environment). In an organized market, consumers can only buy electricity from the distributor that operates in their area. In the case of the city of São Paulo, that distributor is Enel. Individuals, for example, can only buy energy from these distributors and are therefore captive consumers.

In a free market, the consumer has the freedom to choose from whom to buy energy, as well as the sources, that is, he can choose whether he wants to buy only clean energy, for example, from wind energy, solar energy or water production, and even rent certified renewable sources. In a regulated market, there is consumption of a mixture of different sources, without knowing the source of the energy consumed.

In addition to the USP’s ability to choose renewable energy sources, there will be savings on your electric bill with the free market. In a regulated market, the electricity bill is subject to adjustments that are not within the control of the consumer, because the price of energy depends on the tariffs that are regulated. In the regulated market, there is an application of tariff flags which indicate the true cost of electricity generation which varies with the availability of power and weather conditions.

In a free market, in turn, tariff flags are not applied and prices are negotiated between the parties. Thus, the agreed value is set for the duration of the contract, allowing the consumer to further plan and forecast energy costs. In times when the price of energy is higher, the consumer can opt for contracts with shorter duration, while in times when the price is at lower levels, it is possible to contract for longer periods.

According to the engineer at the City Hall of the Campus da Capital, Enea Neri, who has always been involved in the project, “the transition to the free market is a step forward for the USP, because in addition to the possibility of purchasing clean and renewable energy products, the economy resulting from the purchase of cheaper energy will enable the USP From investing more in core activities, as well as ensuring investments in the electrical distribution system itself, ensuring its preservation and modernization, and providing greater reliability.”

It is important to note that the savings achieved in just one year will be sufficient to pay all the costs involved in retrofitting the substation. With the migration to the free energy market, USP is positioning itself in the search for sustainable practices and cost reduction. The initiative is an important step towards raising awareness and adopting more sustainable practices in educational institutions, as well as enabling additional investments in quality teaching and research.

(Opinions expressed in articles published in USP Journal are the sole responsibility of its authors and do not reflect the views of the vehicle or the institutional positions of the University of São Paulo. Access our editorial standards for opinion pieces here.)