A Mathematical Modeling for Contract Flexibility Optimization by Brazilian Free Consumers

In Brazil, free consumers must follow the criteria established by Law 9.074/95 and participate in the Free Contracting Environment (ACL), regulated by Decree 5.163/04, together with energy generators, traders, importers and exporters. These free consumers can choose and negotiate their energy purchase contracts (energy volumes, contract terms, prices, flexibilization and financial guarantees) with the other agents connected to the interconnected Brazilian grid. However, free consumers must have 100% of its energy contracted to avoid exposure to the short-term market and possible penalties, among others points. It is noteworthy that free consumers in Brazil are usually large industries and use electricity energy only to manufacture their products. In this sense, they are totally averse to contractual risks and penalties and seek the ACL only to obtain financial reductions with the same contractual security as the regulated market. In this sense, the main objective of this work is to model the mathematical optimization problem for contract flexibility optimization by free consumer in the ACL, minimizing the energy cost to meet its demand.