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Power price trends (Brazil)

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Rafael Herzberg's picture
Consultant energy affairs Self employed

Rafael Herzberg- is an independent energy consultant, self-employed (since 2018) based in São Paulo, Brazil* Focus on C level, VPs and upper managers associated to energy related info, analysis...

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  • Jun 1, 2021

Power price trends (Brazil)

Two important references for decision-making processes involving the contracting of energy sources and their management are:

MCO - marginal cost of operations
MCE - marginal cost of expansion

MCO is about short and medium terms and MCE is about long term.

The MCO is quite volatile in Brazil (range between tens and hundreds of R$/MWh) because it depends essentially on two very "sensitive" parameters: level of the reservoirs that feed the hydroelectric power plants and market demand.

The MCE is more "behaved" and points to a "stable" value, in USD/MWh, and accordingly is exposed to the exchange rate (right now 1 USD = R$ 5).

If you would like to explore strategies to close robust and competitive contracts involving energy sources, make sure to evaluate MCO and MCE to go for well informed decisions.


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