Opening of the free market tends to boost the expansion of smart metering

The market already anticipates a possible increase in demand for smart meters based on the forecast of full opening of the ACL (Free Contracting Environment) for energy at the end of 2027, as provided for in MP (Provisional Measure) 1.300/2025, recently published by the government with the aim of reforming the model of the national electricity sector.

The new impetus should not come from energy distribution companies, but from the initiative of marketing agents. Companies will be able to offer the exchange of conventional equipment as a competitive differentiator when offering migration contracts.

Associated with the sale of electricity at more affordable prices, the use of the smart meter will allow the customer, among other facilities, to manage their consumption pattern more efficiently, including the performance of each of their household appliances.

As meters are part of the distributors assets, their replacement by a more advanced model and their shared use by the distributors may be the subject of specific regulation by the ANEEL (National Electric Energy Agency).

An agreement between the interested parties, however, would also be a viable solution. There is a record of similar negotiations occurring at the time of the opening to large consumers, according to ABINEE (Brazilian Association of the Electrical and Electronic Industry).

Data richness
Donato Filho, CEO of Volt Robotics, understands that, although electronic metering is not an absolute necessity for opening up the market, since current meters allow basic billing of accumulated monthly consumption, he considers it “highly desirable”.

“Smart meters offer granular information, with readings every five minutes. This wealth of data is essential for the free market, as it allows the creation of innovative and personalized products and services,” highlights the executive.

Donato says Brazil is significantly behind in adopting smart metering, estimating it is about 20 years behind compared to other countries that have already implemented it or are in advanced stages of their plans. 

He identifies the lack of differentiated tariffs, technical and bureaucratic issues and the absence of regulatory definition as the main obstacles. In this context, there are some notable cases, argues the director of Volt Robotics. 

He mentions the successful replacement program that Copel, a concessionaire in Paraná, has been promoting in its concession area. The company has installed more than one million smart devices.

“Indispensable”
Roberto Barbieri, advisor for the Electric Energy Generation, Transmission and Distribution area at ABINEE (Brazilian Association of the Electrical and Electronic Industry) agrees that the demand for a mass replacement of the meter park with smart versions has never been robustly established.

 According to Barbieri, the annual market for meters – estimated at between 4,5 and 5 million units – is dominated by conventional devices. Although they are already electronic in terms of technology, he points out, these models only record total energy consumption, without offering additional information or communication capabilities.

The main driving force for the installation of smart meters in Brazil, according to the executive, has been micro and mini distributed generation, such as photovoltaic solar generation installations. 

The possibility of remote cutting and reconnecting, remote measurement or the implementation of differentiated tariffs has not proven to be a sufficient incentive to date, not least because there is a lack of smart tariff products.

On the other hand, Barbieri believes that although the migration to the free market does not require, in principle, a smart meter, it will become indispensable for retailers who wish to offer differentiated products and services. 

“To win customers, retailers will need to offer tariffs with time differences, which is only possible with a meter capable of distinguishing consumption at different times of the day,” he points out.

Regarding a possible business model that could make it possible to exchange meters when the free market opens completely at the end of 2027, the ABINEE advisor assesses that the expectation is that there will be an agreement where the retailer, at its own expense or together with the consumer, finances the replacement. 

However, he does not rule out agreements between traders and distributors, as occurred in the past when the first large consumers migrated.

Value in exchange
In the view of ABRACEEL (Brazilian Association of Energy Traders), it is not yet possible to state that the option to offer smart meters could become an attractive appeal that will differentiate approach strategies on the part of traders.

“It is difficult to say what solutions, products and services retailers will offer consumers because these are commercial decisions that will be made when the time comes for the market to open up. But it is reasonable that some retailers may see value in replacing meters or providing equipment that plays a role in managing energy consumption,” says Rodrigo Ferreira, CEO of ABRACEEL.

On the other hand, Ferreira points out that there are devices that are not meters, but that, installed in the internal electrical structure of a consumer, also map the use of equipment and even allow remote control. “It is very likely that this will be offered in Brazil to some consumers, and then it will expand, in the same way that it was offered and is offered in other markets”, he assesses.

consulted, the ABRADEE (Brazilian Association of Electric Energy Distributors) reported, in a note, that the installation of smart meters is a measure to modernize distribution networks and provides a paradigm shift.

According to current regulations, the entity points out, the replacement of conventional meters with smart meters is a prerogative of the distributor in accordance with its network modernization strategy and its cost is covered by the tariff of the universe of consumers.