Ownership and regulation in the Brazilian electricity system and their relationship with the system’s efficiency

Abstract

This paper examines the creation and development of Brazil’s electricity sector. Based on a case study from an historical perspective, it analyzes the relationship between state intervention, the type of market (monopolistic, oligopolistic, competitive), the type of ownership (state or private) and the growth of installed capacity. The paper shows that the sector had its origins in private initiatives that were, in general, small and isolated. Until the first half of the twentieth century, the state intervened only occasionally but, subsequently, played an important role in planning and operating the system. Thanks to this, regulation became more effective. The crisis of the 1980s and the privatizations of the 1990s changed the integrated model, increasing competition. However, the results were not satisfactory and, as from the first decade of this century, new models of cooperation between public and private capital were introduced. The conclusion section highlights the relationship that exists between type of ownership and the performance of electricity companies and the sector as a whole