Carried out in collaboration with AES Tietê, the AES Energy Intelligence Project will add scalability and security to bilateral transactions
Channeled into a pioneering initiative that will allow introducing Brazil’s first organized over-the-counter energy trading platform with the use of blockchain technology, we are working in collaboration with AES Tietê, one of Latin America’s largest renewable electricity generation companies. Called AES Tietê Energy Intelligence project, our joint initiative consists of a digital environment that will allow trading energy with central counterparty clearing (CCP), which ensures clearing and settlement of bilateral energy contracts for both buyers and sellers. Backed by ANEEL’s R&D program, AES Tietê is investing R$ 3.4 MLN in the project.
Currently in Brazil, the Free Energy Market (Ambiente de Contratação Livre – ACL) operates in a non-organized format. It means it does not involve a CCP to settle trades. This may present risks to trade executed by two counterparties in terms of liquidity and transparency, in addition to limiting the expansion of the Free Energy Market. Launched this month, the project we designed for AES will allow counterparties to trade energy on the organized OTC market with added solidity, security and scalability.
We want everyone to have access to Brazil’s Free Energy Market, so that end consumers may buy electricity directly from generators or free market traders. Today, Brazil’s free market accounts for 30% of the energy traded. The Brazilian Energy Regulator ANEEL intends the market to be totally free by 2028, which means there is a growing trend towards opening up.
“Along with increased security, our platform will ensure data reliability and enhance scalability in energy trading, thanks to integration between financial intelligence and encryption of smart contracts with the use of blockchain technology”, says Igor Ferreira, CEO at Fohat.What is more, Fohat is the first and only company in Latin America to use blockchain in the energy sector, with considerable expertise in the Australian market, where electricity is traded freely.
In addition to the organized OTC energy trading platform, Fohat will implement further energy intelligence solutions. It will integrate other solutions designed by AES Tietê, such as Virtual Power Plants with the OTC market. Thanks to collaboration with the Energy Web Foundation, the platform will allow issuing I-RECs (renewable energy certificates).
“This collaboration is a major step towards our innovation and digitalization strategy. We build on our work to respond to and anticipate major trends in the energy market with a focus on our customer needs. As disruptive solutions are taking over the energy sector, we are moving ahead with pioneering initiatives to add value to our business.”Rogério JorgeChief Commercial Officer and Head of Innovation and Digital Transformation at AES Tietê.