The electrical sector: a high-performance athlete outside the World Cup!

During the World Cup, it is inevitable to compare the electricity sector to a high-performance athlete. Now, it's as if the Brazilian electricity sector were an elite athlete, with all the conditions to compete at an international level, but which insists on running with the handbrake on - whether due to regulatory insecurity, or external interference and decisions that limit its own potential.

The talent is there. The potential is evident, competitive and promising, but the choices made along the way end up compromising the performance of the sector itself.

And perhaps this is the great paradox of the Brazilian electricity sector: we have one of the most sophisticated systems in the world, highly qualified professionals and an enviable energy matrix, but we continue to impose obstacles that prevent the country from achieving protagonism compatible with its capacity.

The Brazilian electricity sector is this athlete: prepared, talented and with real conditions for global leadership, but constantly limited by decisions that reduce its performance and postpone, year after year, the long-awaited world title.

But, after all, who is responsible for this frustration? In a way, all of us.

The first point is that agents need to stop looking only at their own positions and immediate interests. In many cases, this ends up creating regulatory distortions, legal uncertainty and negative impacts on the sector itself.

It is necessary to think about the electricity sector in a more structural and strategic way, promoting gains that not only benefit individual operations, but that strengthen the sectoral environment as a whole.

A sector of this size does not develop sustainably when each agent acts exclusively to maximize short-term advantages. True progress occurs when there is the ability to build balanced, predictable solutions aligned with the collective interest of the market and the country.

Institutions need - and must - better understand the position of agents and act effectively to promote a regulatory environment favorable to business development, in line with the principles of the Economic Freedom Law.

The regulatory relationship cannot be transformed into a logic of "me against you", the sector demands institutional dialogue, predictability and legal security so that it is possible to build a competitive, healthy environment capable of attracting long-term investments.

However, some measures adopted go in exactly the opposite direction, increasing insecurities, increasing the perception of regulatory risk and hindering the efficient development of the sector.

More than monitoring or reacting to specific crises, it is necessary for institutions to also and even more assume the role of inducing stability, innovation and sustainable growth in the electricity market.

In this line, some specific measures could bring relevant benefits to the sector, especially with regard to regulatory predictability, legal certainty and stimulating the development of new businesses, for example:

In the context of electricity sales, especially given the opening of the Free Contracting Environment - (ACL) to Group B, wouldn't it be pertinent to discuss the imposition of an ex-ante registration for Retail Traders?

It is necessary to ensure that marketing operations are compatible with the financial and operational capacity of agents, precisely to mitigate risks of default and avoid systemic effects on the market. In other words, it is essential to establish more solid criteria to ensure that agents have effective financial support, capable of withstanding possible default situations.

In the distribution segment, it is necessary to recognize that the role of distributors has been undergoing a significant transformation within the electricity sector. Therefore, it is essential to ensure the balance of these new responsibilities, preserving the economic and financial viability of the concessionaires and, at the same time, seeking, in a sustainable way, the continuous improvement of the quality of supply to the consumer.

In energy transmission, in turn, it is necessary to improve regulatory rationality to ensure that any penalties do not trigger circumstances beyond the control of the concessionaires, under penalty of creating an environment of excessive insecurity and disincentive to investment.

In the field of generation, the discussion about "curtailment" is today one of the biggest symbols of the sector's difficulty in transforming potential into efficiency, as the issue needs to be addressed urgently, observing international experiences and regulatory solutions already consolidated in other markets. Furthermore, it is essential to reduce regulatory and environmental obstacles that still hinder the development of certain sources and compromise the balanced expansion of the Brazilian energy matrix.

And regarding energy storage, perhaps the most appropriate question is: what is still missing for its effective regulation? The sector has already demonstrated its technical, economic and strategic relevance, therefore, it is time to transform all of this into a regulatory decision.

As far as the price discussion is concerned, improvements are still necessary and what should always be sought is a pricing model that adequately reflects the real situation in the electricity sector.

The fact is that the inescapable conclusion is that the electricity sector has all the conditions to become a true world champion, the country brings together privileged natural resources, a competitive energy matrix, internationally recognized technical capacity and extremely qualified professionals in all segments of the chain.

Therefore, Brazil cannot continue to watch an athlete of this magnitude compete below his own potential and Brazilian society deserves an efficient, modern, competitive and sustainable electricity sector - and, above all, it deserves to finally celebrate this title.

* Urias Martiniano Garcia Neto is a partner at Urias Martiniano Advogados (UMN Advogados).

The articles published by CNN Infra seek to stimulate debate, reflection and shed light on views on the main challenges, problems and solutions faced by Brazil and other countries in the world. The texts published in this space do not necessarily reflect the opinion of CNN Brasil.

Source: CNN