This group brings together the best thinkers on energy and climate. Join us for smart, insightful posts and conversations about where the energy industry is and where it is going.


Power prices/tariffs not viable in Brazil

image credit: Balance is the key!
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...

  • Member since 2003
  • 2,213 items added with 1,291,741 views
  • Jul 21, 2020

Power prices/tariffs not viable in Brazil

Predictability, legal certainty and respect for contracts are essential so that power providers and energy users can make long-term decisions.

The amortization of power generation plants, which is the main cost item of the Brazilian power matrix, can be estimated as follows.

* Investment in power plants is R$ 6 thousand/kW of nominal capacity
* For every 1 kW of market demand, the matrix offer is 2 kW
* The investment is therefore R$ 12 thousand/kW
* The financial calculation is for 20 years and an interest rate of 1% per month
* Amortization results in R$ 233/MWh (USD 44/MWh)

In addition to amortization, there is a list of costs to be considered:

* Fuel to run thermal plants
* Operation and maintenance
* Power theft, which in Brazil is important
* Subsidies
* Taxes

The current tariffs/prices are below the required economic-financial balance.

This although Brazil has the highest cost among the BRICS in USD/MWh.


No discussions yet. Start a discussion below.

Rafael Herzberg's picture
Thank Rafael for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »