Introduction: The Brazilian electricity sector has undergone a gradual liberalization process since 1995, successfully granting freedom of choice to high-voltage consumers. However, the vast majority of the consumer base, residential users and small businesses, remain captive to local distributors, prevented from negotiating directly with suppliers. Despite recent regulatory moves, such as the proposal for full market opening by 2026, there is a significant gap in research on the socioeconomic risks of this transition. Specifically, there is little evidence on how to balance increased competition with the need for social equity and the financial sustainability of distributors. Therefore, this study aims to assess the prospect of full market opening in Brazil, drawing lessons from international benchmarks and modeling the potential economic impacts on the national regulated market.

Methods: The research methodology begins with a systematic literature review in global databases to identify success and failure factors in the international liberalization of low-voltage electricity. This review provides the basis for a critical contextualization of the Brazilian scenario, comparing the historical constraints of the captive market with the proposed liberalization goals. For the quantitative phase, the study replicates established forecasting protocols, applying models to Brazilian historical data (2004–2024) to project demand and costs until 2035.

Results: Preliminary analysis of international experiences reveals several structural challenges: Germany exhibits significant market rigidity due to high switching costs and consumer inertia; France maintains price stability through state redistribution of nuclear energy profits; Japan recently experienced a "reverse phenomenon," in which market prices exceeded regulated prices after the 2022 energy crisis, leading to a contraction in the free market share; and the United Kingdom demonstrates that high consumer satisfaction (81%) can coexist with record levels of household energy debt (£3.85 billion). In the Brazilian context, initial simulations indicate that regulated tariffs may increase between 2% and 11% during the migration phase. This pressure is disproportionately high for smaller distributors, where loss of scale threatens solvency and may force the remaining captive consumers, including 67% of low-income users, to absorb the fixed costs of the distribution network.

Conclusions: The study concludes that while liberalization can boost efficiency and innovation, its successful implementation in Brazil depends on robust regulatory safeguards. To avoid deepening social inequalities, the transition should include a gradual management of legacy contracts, investment in smart metering infrastructure, and comprehensive energy education programs to protect vulnerable users. Furthermore, the research suggests that an abrupt and sudden opening could be detrimental to the financial health of regional utilities. Instead, a gradual approach is recommended, ensuring that gains in competitiveness are not achieved at the expense of tariff affordability for those who remain in the regulated market.