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Power prices: opportunity (Brazil)
Power prices: opportunity (Brazil)
Two factors contribute to the market's very attractive ongoing deregulated prices:
1°) Reservoirs
That supply the hydroelectric plants (which represent the largest fraction of the country's power matrix) are full!
2nd) Demand
The Brazilian GDP is anaemic and therefore the demand for energy is low
Numerically:
* Long-term (2024 to 2027) market price is at BRL 130/MWh
* Long-term "equilibrium" price is BRL 167/MWh
This is the calculation I always do (marginal cost of expansion).
Bottom line: market prices are BELOW the one that would properly compensate the power generation investmentos.
1 USD = BRL 5.2
Rafael Herzberg
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