Foundation
The power sector's double network
Energy flows through lines and substations; money flows through contracts, the market and the electricity bill. The two networks touch at the same assets, and that is how a lightning strike, an energy surplus or a drought crosses from one to the other.
Breno Loureiro, BrazilGrid
2026-10-14
3 min read
Two networks, the same assets
Most people see the power sector as a single network: plants, lines, substations. There is a second one that never shows up on the map: the network of money , made of contracts, the market, system charges and the electricity bill.
The two touch at the same assets. A wind farm is a node in the energy network and a business in the money network. A consumer is a socket in one and a bill in the other. These points of contact are the bridges .
Above both runs a third layer, the events : a lightning strike, an energy surplus, a drought. An event starts at one point and crosses both networks through the bridges. Along the way, the sector's rules decide who pays.
Two networks tied together by the same assets. An event enters at one point and crosses both through the bridges.
Two networks tied together by the same assets
An event enters at one point and crosses both through the bridges
Energy
electricity
Money
contracts and payments
Events
Rule
The wind farm is a node in the energy network and a business in the money network. The hydro plant also has an owner, contracts and revenue. The local grid and the company that runs it and bills for it. The consumer is a socket in one network and a bill in the other. Hydro plant: Generates with water from rivers and reservoirs. Hydro plant Wind farm: Generates with wind; the operator can limit its output. Wind farm Substation: Where lines meet and voltage changes. Substation Transmission line: Carries energy over long distances. Transmission line Distribution grid: Carries energy to every address. Distribution grid Consumer: Home, shop or factory. Consumer Plant owner: The company that sells the plant's energy. Plant owner Contract: A sale agreed in advance, with term and price. Contract Energy trader: Buys and sells energy without generating it. Energy trader Spot market: Settles the gap between contracted and delivered, at the hourly price. Spot market System charges: System costs shared among all consumers. System charges Distribution utility: Buys energy, runs the local grid and issues the bill. Distribution utility Electricity bill: Where energy, grid, charges and taxes reach the consumer. Electricity bill Curtailment reason: The system operator records why it limited each plant. Curtailment reason Who pays: The sector's rules decide whether the loss is refunded, and from which account. Who pays Drought: Below-normal rain in the river basins. Drought Energy surplus: Lots of wind and sun, little demand. Energy surplus Lightning: A strike near a line. Lightning energy network
money network
event
rule
bridge: the same asset in both networks
Two networks tied together by the same assets. An event enters at one point and crosses both through the bridges.
Two networks tied together by the same
assets
An event enters at one point and crosses both through
the bridges
Energy
electricity
Money
contracts and payments
Events
Rule
The wind farm is a node in the energy network and a business in the money network. The hydro plant also has an owner, contracts and revenue. The local grid and the company that runs it and bills for it. The consumer is a socket in one network and a bill in the other. Hydro plant: Generates with water from rivers and reservoirs. Hydro plant Wind farm: Generates with wind; the operator can limit its output. Wind farm Substation: Where lines meet and voltage changes. Substation Transmission line: Carries energy over long distances. Transmission line Distribution grid: Carries energy to every address. Distribution grid Consumer: Home, shop or factory. Consumer Plant owner: The company that sells the plant's energy. Plant owner Contract: A sale agreed in advance, with term and price. Contract Energy trader: Buys and sells energy without generating it. Energy trader Spot market: Settles the gap between contracted and delivered, at the hourly price. Spot market System charges: System costs shared among all consumers. System charges Distribution utility: Buys energy, runs the local grid and issues the bill. Distribution utility Electricity bill: Where energy, grid, charges and taxes reach the consumer. Electricity bill Curtailment reason: The system operator records why it limited each plant. Curtailment reason Who pays: The sector's rules decide whether the loss is refunded, and from which account. Who pays Drought: Below-normal rain in the river basins. Drought Energy surplus: Lots of wind and sun, little demand. Energy surplus Lightning: A strike near a line. Lightning energy network
money network
event
rule
bridge: the same asset in both networks
Hover over each point to read what it is. Dotted: a bridge between the two networks. Three events, three paths
Each column is a layer; each number, a step. A solid line is a link that leaves a record. A dashed one is only closeness in time and on the map, and coinciding is not causing .
Lightning on the line
Lightning on the line. The reason the operator records decides where the value goes.
Lightning on the line
The reason the operator records decides where the value goes
event
energy
rule
money
Lightning near the line: Same time, same place: a clue, not proof. 1 Lightning near the line Same time, same place: a clue, not proof. The line trips: The record says which line and when. 2 The line trips The record says which line and when. The operator limits the plants: And records the reason. The reason decides the rest. 3 The operator limits the plants And records the reason. The reason decides the rest. The wind farm generates less: The wind was there; the grid could not carry it. 4 The wind farm generates less The wind was there; the grid could not carry it. The owner sells less: Energy that does not flow is not paid for. 5 The owner sells less Energy that does not flow is not paid for. Or: system-security reason: Under the normal regime nothing comes back: the owner keeps the loss. Or: system-security reason Under the normal regime nothing comes back: the owner keeps the loss. Reason: grid unavailable: The rules may refund part of the loss, above an allowance. 6 Reason: grid unavailable The rules may refund part of the loss, above an allowance. The refund becomes a charge: All consumers together pay for it. 7 The refund becomes a charge All consumers together pay for it. It reaches the bill: The utility passes the charge on in the tariff. 8 It reaches the bill The utility passes the charge on in the tariff. recorded link
same time and place: a clue, not a cause
other branch
Lightning on the line. The reason the operator records decides where the value goes.
Lightning on the line
The reason the operator records decides where the value
goes
event
energy
rule
money
Lightning near the line: Same time, same place: a clue, not proof. 1 Lightning near the line Same time, same place: a clue, not proof. The line trips: The record says which line and when. 2 The line trips The record says which line and when. The operator limits the plants: And records the reason. The reason decides the rest. 3 The operator limits the plants And records the reason. The reason decides the rest. The wind farm generates less: The wind was there; the grid could not carry it. 4 The wind farm generates less The wind was there; the grid could not carry it. The owner sells less: Energy that does not flow is not paid for. 5 The owner sells less Energy that does not flow is not paid for. Or: system-security reason: Under the normal regime nothing comes back: the owner keeps the loss. Or: system-security reason Under the normal regime nothing comes back: the owner keeps the loss. Reason: grid unavailable: The rules may refund part of the loss, above an allowance. 6 Reason: grid unavailable The rules may refund part of the loss, above an allowance. The refund becomes a charge: All consumers together pay for it. 7 The refund becomes a charge All consumers together pay for it. It reaches the bill: The utility passes the charge on in the tariff. 8 It reaches the bill The utility passes the charge on in the tariff. recorded link
same time and place: a clue, not a cause
other branch
The path splits at the curtailment reason recorded by the operator. The same cut can end on everyone's electricity bill or as one company's loss. The lightning does not decide that: the reason the operator records does.
Energy surplus
Energy surplus. The same cut as the lightning, another reason, another destination for the money.
Energy surplus
The same cut as the lightning, another reason, another destination for the money
event
energy
rule
money
Energy is left over: Lots of wind and sun, little demand. Nothing breaks. 1 Energy is left over Lots of wind and sun, little demand. Nothing breaks. The operator curtails renewables: Recorded reason: energy surplus. 2 The operator curtails renewables Recorded reason: energy surplus. The wind farm generates less: The same physical cut as the lightning. 3 The wind farm generates less The same physical cut as the lightning. The rules refund nothing: For this reason, the owner keeps the loss. 4 The rules refund nothing For this reason, the owner keeps the loss. The contract still holds: The owner sold energy it did not generate. 5 The contract still holds The owner sold energy it did not generate. The gap goes to the market: Settled in the spot market, at that hour's price. 6 The gap goes to the market Settled in the spot market, at that hour's price. The seller bears the risk: Generator or trader: whoever has no slack feels it first. 7 The seller bears the risk Generator or trader: whoever has no slack feels it first. recorded link
same time and place: a clue, not a cause
Energy surplus. The same cut as the lightning, another reason, another destination for the money.
Energy surplus
The same cut as the lightning, another reason, another
destination for the money
event
energy
rule
money
Energy is left over: Lots of wind and sun, little demand. Nothing breaks. 1 Energy is left over Lots of wind and sun, little demand. Nothing breaks. The operator curtails renewables: Recorded reason: energy surplus. 2 The operator curtails renewables Recorded reason: energy surplus. The wind farm generates less: The same physical cut as the lightning. 3 The wind farm generates less The same physical cut as the lightning. The rules refund nothing: For this reason, the owner keeps the loss. 4 The rules refund nothing For this reason, the owner keeps the loss. The contract still holds: The owner sold energy it did not generate. 5 The contract still holds The owner sold energy it did not generate. The gap goes to the market: Settled in the spot market, at that hour's price. 6 The gap goes to the market Settled in the spot market, at that hour's price. The seller bears the risk: Generator or trader: whoever has no slack feels it first. 7 The seller bears the risk Generator or trader: whoever has no slack feels it first. recorded link
same time and place: a clue, not a cause
The same physical cut as the lightning, another reason. For the plant, nothing changes: it generates less. For the money, everything changes. The seller keeps the loss, and the contract still has to be honoured in the spot market.
Drought
Drought. No equipment fails: the event runs almost only through the money network.
Drought
No equipment fails: the event runs almost only through the money network
event
energy
rule
money
Less rain in the basins: A slow event that lasts for months. 1 Less rain in the basins A slow event that lasts for months. Hydro plants generate less: Reservoirs fall; dispatch decides how much each plant generates. 2 Hydro plants generate less Reservoirs fall; dispatch decides how much each plant generates. They share the shortfall: A pooling scheme spreads the water risk among hydro plants. 3 They share the shortfall A pooling scheme spreads the water risk among hydro plants. The spot price rises: The missing energy gets more expensive. 4 The spot price rises The missing energy gets more expensive. Costlier thermal plants start: To save water; the extra cost becomes a charge. 5 Costlier thermal plants start To save water; the extra cost becomes a charge. The uncovered pay dearly: Without collateral, a trader can be cut off from the market. 6 The uncovered pay dearly Without collateral, a trader can be cut off from the market. The tariff flag changes: The tariff flag warns consumers of the higher cost. 7 The tariff flag changes The tariff flag warns consumers of the higher cost. recorded link
same time and place: a clue, not a cause
Drought. No equipment fails: the event runs almost only through the money network.
Drought
No equipment fails: the event runs almost only through
the money network
event
energy
rule
money
Less rain in the basins: A slow event that lasts for months. 1 Less rain in the basins A slow event that lasts for months. Hydro plants generate less: Reservoirs fall; dispatch decides how much each plant generates. 2 Hydro plants generate less Reservoirs fall; dispatch decides how much each plant generates. They share the shortfall: A pooling scheme spreads the water risk among hydro plants. 3 They share the shortfall A pooling scheme spreads the water risk among hydro plants. The spot price rises: The missing energy gets more expensive. 4 The spot price rises The missing energy gets more expensive. Costlier thermal plants start: To save water; the extra cost becomes a charge. 5 Costlier thermal plants start To save water; the extra cost becomes a charge. The uncovered pay dearly: Without collateral, a trader can be cut off from the market. 6 The uncovered pay dearly Without collateral, a trader can be cut off from the market. The tariff flag changes: The tariff flag warns consumers of the higher cost. 7 The tariff flag changes The tariff flag warns consumers of the higher cost. recorded link
same time and place: a clue, not a cause
No equipment fails; the event runs almost only through the money network. A drought trips no line. It makes energy more expensive, squeezes whoever sold without cover and shows up, months later, in the colour of the tariff flag on the bill.
Six questions, six drawings
No drawing shows everything. Each question calls for a view, and all of them read the same graph: the asset lit in one drawing is the same asset lit in the others.
Six questions, six drawings, one selection. Lit in every drawing: the same asset.
Six questions, six drawings, one selection
Lit in every drawing: the same asset
Selected: Transmission line
Where? Map Where? Map How is it connected? Single-line diagram How is it connected? Single-line diagram Where does it flow? Flow diagram Where does it flow? Flow diagram Who owns it? Who buys? Ownership tree Who owns it? Who buys? Ownership tree What does it affect? Graph neighbourhood What does it affect? Graph neighbourhood What is happening? Exception feed What is happening? Exception feed
Six questions, six drawings, one selection. Lit in every drawing: the same asset.
Six questions, six drawings, one selection
Lit in every drawing: the same asset
Selected: Transmission line
Where? Map Where? Map How is it connected? Single-line diagram How is it connected? Single-line diagram Where does it flow? Flow diagram Where does it flow? Flow diagram Who owns it? Who buys? Ownership tree Who owns it? Who buys? Ownership tree What does it affect? Graph neighbourhood What does it affect? Graph neighbourhood What is happening? Exception feed What is happening? Exception feed
In every drawing, the same asset is lit. Not every asset appears in every drawing.
Question and view Where to see it today Where? MapgridMap How is it connected? Single-line diagramgridAssets, the page of each substation Where does it flow? Flow diagramgridAssets, the distribution utility page* Who owns it? Who buys? Ownership treegridAssets, the plant page and energy traders What does it affect? Graph neighbourhoodgridAssets, the line page and "Path to the transmission grid" on the plant page What is happening? Exception feedgridCurt
* in development
To start: in gridAssets, open the page of a substation and scroll to the "Single-line diagram (assembled)" panel. Each line arriving there is an edge of the energy network; the owner of each one is a node of the money network.
How to read the figures, and what we do not claim
How to read
Energy (blue) is the physical path of electricity. Money (amber) is the path of contracts and payments. Event (orange) is what triggers the chain. Rule (diamond) is where a regulation decides the next step.Recorded link (solid line): a record ties the two steps together, such as the operator recording the curtailment reason and the line involved.Same time and place (dashed): the two facts happened close together, at the same time. It is a clue to investigate, not proof of cause.Other branch (grey dashed): the path the same event would take with another recorded reason.
What we do not claim
The three scenarios are simplified illustrations of the mechanism, not the account of a real episode.
We do not claim that a lightning strike caused a cut. We claim the two can be linked in time and space, and that this link is a clue, not proof.
The rules have conditions, allowances and exceptions that are left out here. The article says where they decide, not how much is refunded.
Not all six views are public BrazilGrid screens. The "Where to see it today" column lists only those that are.
A starting point, not the final word: this is our reading of the sector, based on public information. Use it as a compass and do your own analysis.
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