IntercontinentalExchange (NYSE: ICE), a leading operator of regulated global futures exchanges, clearing houses and over-the-counter (OTC) markets, today announced a partnership to launch BRIX, a Brazilian marketplace for electric power. BRIX is operationally ready, and anticipates launching in June 2011.
As a pioneer in the development of transparent, electronic markets for the North American electric power markets in the year 2000, ICE has developed the trading platform for the Brazilian marketplace. Today, ICE’s electronic platform hosts liquid markets for North American power and natural gas, and supports trading for approximately 50% of the world’s crude and refined oil futures contract volume.
Along with ICE, the partnership includes Roberto Teixeira da Costa, economist, founder and first president of CVM, the Brazilian financial regulator; Eike Batista, ceo of EBX Holding which invests across industrial sectors including energy, infrastructure and mining; Josue Gomes da Silva, president of Coteminas, the largest textile group in the Americas; and Marcelo Parodi, founder and president of Compass Energia. Mr. Teixeira da Costa will serve as the Chairman and Marcelo Mello has been named President of BRIX. Mr. Mello was previously head of commodities Latin America for Standard Bank.
BRIX will offer a transparent, electronically traded marketplace for key Brazilian power contracts, including a range of risk management tools for eligible power market participants. Bids, offers and trades will be shown in real time on the BRIX screen for all participants. The BRIX marketplace will operate subject to rules and participant agreements. All trades will be registered with the Camara de Comercializacao de Energia Eletrica (CCEE). More information can be found at www.BRIX.com.br.
Said Chuck Vice, president and coo of ICE: “ICE was founded more than a decade ago to serve global energy markets, and we believe our history of providing transparency and market-based prices will bring important risk management tools to the Brazilian power industry. We are proud of the BRIX partnership, which combines the deep local knowledge and strong industry experience in Brazil with ICE’s extensive market expertise and technology. Together, our partnership is committed to serving the unique needs of participants in the Brazilian power market, and we look forward to developing the power market on BRIX.”
Said Roberto Teixeira da Costa, chairman of BRIX: “Brazil’s vibrant economic and industrial growth brings opportunities to leverage best practices in markets — particularly in the rapidly expanding energy sector with an experienced, innovative partner like ICE who has transformed the North American natural gas and power markets from fragmented, opaque markets to transparent, market based pricing. We will continue to work with the industry as we move toward our launch to build a marketplace that is responsive to market requirements.”
Brazilian electric power has been distributed in a market-based manner since 1995, when Brazil enacted Law 9074, creating what is known as “the free power market.” While electric power is also sold and distributed in a price-regulated market, the free power market is growing rapidly and today accounts for approximately 25% of Brazil’s total power consumption.
Brazil is also a leading country in renewable power generation: 75% of its energy matrix comes from hydropower plants. Wind energy and biomass are also expanding rapidly. BRIX will have trading environments for all sources of power generated in Brazil, including hydro, thermal, biomass and wind, throughout the country. Establishing transparency and price discovery in these markets will further strengthen investment for renewable projects.
