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Electric power in Brazil: what's a fair price?

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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  • Oct 19, 2021

Electric power in Brazil: what is a fair price?

This week I received a message from a reader of my posts asking: after all, who am I complaining when prices are low and when they are high.

This is a very interesting topic!

From a systemic point of view, it is about a balance between supply and demand, so that prices can revolve around competitive values ​​for customers and at the same time healthy for the entire production chain.

What has happened in Brazil is a combination of negative factors that places Brazil at the bottom of the market (BRICS) when the reference is $/MWh, including:

* Undersized hydroelectric reservoirs
* Taxes well above what is charged internationally on electric energy
* Energy sources to feed thermal plants much more expensive than our competitors
* Open debts from agents that end up burdening the cost of all the electricity sector
* Theft that have existed for decades and whose costs are transferred to the honest consumers

On the other hand, the bravado of our leaders "who command" to lower the flag (cost related) of water crisis, but without showing who will pay for it.

In short, we need to demand transparency, correction and, above all, respect for regulation. Otherwise we will always be outside what is sustainable and even desirable.


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Thank Rafael for the Post!
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