Energy Supply Risk Due to Selling Over the Physical Generation Capacity
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In Brazil the electricity market agents have to present full physical generation coverage. In other words, only the generator’s assured energy can be negotiated. This work explores the possibility of financial leverage in terms of energy by allowing the negotiation of contracts that extrapolates the physical capacity. Short-term price simulations are used to value contracts and to study risk. The procedure gives more flexibility and liquidity to the market amplifying the business possibilities.