The Real Possibility of Competitive Generation Markets in Hydro Systems : The Case of Brazil
Brazil's electricity sector is made up of more than sixty-five, mostly vertically integrated, federally- and state-owned monopolies. The most pressing problems in the sector are excessive operational costs and large investment needs. Both of...
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| Format: | Viewpoint |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/1997/02/694973/real-possibility-competitive-generation-markets-hydro-systems-case-brazil http://hdl.handle.net/10986/11595 |
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okr-10986-115952021-06-14T11:04:35Z The Real Possibility of Competitive Generation Markets in Hydro Systems : The Case of Brazil Estache, Antonio Rodriguez-Pardina, Martin BIDDING CONCESSION AREAS COST RECOVERY CROSS-SUBSIDIES ENERGY PRICES ENTITLEMENTS EXCESS WATER EXTERNALITIES FIXED COSTS MARGINAL COST MARGINAL COSTS MARKET STRUCTURE MONOPOLIES OPPORTUNITY COSTS PAYMENT FOR WATER PRIVATE PARTICIPATION PRIVATE SECTOR PRODUCERS RETAIL SALES SANCTIONS SPOT MARKETS STORAGE CAPACITY VARIABLE COSTS WATER RESOURCES WATER RIGHTS WATER USE ELECTRICAL INDUSTRIES DENATIONALIZATION PRICING INCENTIVES HYDROELECTRIC POWER MARKET COMPETITION WATER LAW GENERATION MARKET Brazil's electricity sector is made up of more than sixty-five, mostly vertically integrated, federally- and state-owned monopolies. The most pressing problems in the sector are excessive operational costs and large investment needs. Both of these problems can be addressed through more competition and more private participation. There is a consensus among federal and state policymakers and key operators that the sector's potentially competitive segments should be separated from its natural monopoly segments and awarded as concessions or sold to private investors. However, there are important technical challenges, one of which relates to competitive generation. First, to ensure open entry and the long-term viability of competition in the electricity sector, the government must figure out how to competitively allocate water rights. Second, to provide incentives for investing in generating capacity, a pricing system must be put in place that will ensure recovery of the high sunk capital costs characteristic of hydro systems. This Note describes one consistent approach, using incentive-based organization and regulation, for overcoming the technical challenges to effective competition in the generation market. 2012-08-13T15:29:28Z 2012-08-13T15:29:28Z 1997-02 http://documents.worldbank.org/curated/en/1997/02/694973/real-possibility-competitive-generation-markets-hydro-systems-case-brazil http://hdl.handle.net/10986/11595 English Viewpoint: Public Policy for the Private Sector; Note No. 106 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Viewpoint Publications & Research Latin America & Caribbean Brazil |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
BIDDING CONCESSION AREAS COST RECOVERY CROSS-SUBSIDIES ENERGY PRICES ENTITLEMENTS EXCESS WATER EXTERNALITIES FIXED COSTS MARGINAL COST MARGINAL COSTS MARKET STRUCTURE MONOPOLIES OPPORTUNITY COSTS PAYMENT FOR WATER PRIVATE PARTICIPATION PRIVATE SECTOR PRODUCERS RETAIL SALES SANCTIONS SPOT MARKETS STORAGE CAPACITY VARIABLE COSTS WATER RESOURCES WATER RIGHTS WATER USE ELECTRICAL INDUSTRIES DENATIONALIZATION PRICING INCENTIVES HYDROELECTRIC POWER MARKET COMPETITION WATER LAW GENERATION MARKET |
| spellingShingle |
BIDDING CONCESSION AREAS COST RECOVERY CROSS-SUBSIDIES ENERGY PRICES ENTITLEMENTS EXCESS WATER EXTERNALITIES FIXED COSTS MARGINAL COST MARGINAL COSTS MARKET STRUCTURE MONOPOLIES OPPORTUNITY COSTS PAYMENT FOR WATER PRIVATE PARTICIPATION PRIVATE SECTOR PRODUCERS RETAIL SALES SANCTIONS SPOT MARKETS STORAGE CAPACITY VARIABLE COSTS WATER RESOURCES WATER RIGHTS WATER USE ELECTRICAL INDUSTRIES DENATIONALIZATION PRICING INCENTIVES HYDROELECTRIC POWER MARKET COMPETITION WATER LAW GENERATION MARKET Estache, Antonio Rodriguez-Pardina, Martin The Real Possibility of Competitive Generation Markets in Hydro Systems : The Case of Brazil |
| geographic_facet |
Latin America & Caribbean Brazil |
| relation |
Viewpoint: Public Policy for the Private Sector; Note No. 106 |
| description |
Brazil's electricity sector is made
up of more than sixty-five, mostly vertically integrated,
federally- and state-owned monopolies. The most pressing
problems in the sector are excessive operational costs and
large investment needs. Both of these problems can be
addressed through more competition and more private
participation. There is a consensus among federal and state
policymakers and key operators that the sector's
potentially competitive segments should be separated from
its natural monopoly segments and awarded as concessions or
sold to private investors. However, there are important
technical challenges, one of which relates to competitive
generation. First, to ensure open entry and the long-term
viability of competition in the electricity sector, the
government must figure out how to competitively allocate
water rights. Second, to provide incentives for investing
in generating capacity, a pricing system must be put in
place that will ensure recovery of the high sunk capital
costs characteristic of hydro systems. This Note describes
one consistent approach, using incentive-based organization
and regulation, for overcoming the technical challenges to
effective competition in the generation market. |
| format |
Publications & Research :: Viewpoint |
| author |
Estache, Antonio Rodriguez-Pardina, Martin |
| author_facet |
Estache, Antonio Rodriguez-Pardina, Martin |
| author_sort |
Estache, Antonio |
| title |
The Real Possibility of Competitive Generation Markets in Hydro Systems : The Case of Brazil |
| title_short |
The Real Possibility of Competitive Generation Markets in Hydro Systems : The Case of Brazil |
| title_full |
The Real Possibility of Competitive Generation Markets in Hydro Systems : The Case of Brazil |
| title_fullStr |
The Real Possibility of Competitive Generation Markets in Hydro Systems : The Case of Brazil |
| title_full_unstemmed |
The Real Possibility of Competitive Generation Markets in Hydro Systems : The Case of Brazil |
| title_sort |
real possibility of competitive generation markets in hydro systems : the case of brazil |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/1997/02/694973/real-possibility-competitive-generation-markets-hydro-systems-case-brazil http://hdl.handle.net/10986/11595 |
| _version_ |
1764417302439133184 |