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Is "apportioning" energy costs the best way to go?

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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  • Jan 31, 2022
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Is "apportioning" energy costs the best way to go?

The question stems from a very common practice in Brazil, especially in the electricity sector.

The official criterion is to apportion costs of dispatching more expensive plants "among everyone" and even "prolonging their collection through loans to the electric utilities".

The retrospect shows that this strategy results in a systemic increase in costs for everyone, and even puts Brazil as a laggard in terms of $/MWh, compared to the BRICS (Brazil, Russia, India, China and South Africa).
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It will be worthwhile to evolve to a formulation where consumers pay the real costs. This way they will have a natural incentive to find creative/saving solutions.

We would move from a system that has always been essentially populist to one centered on efficiency. It may not be easy and simple, but it will certainly be much better in the long run.

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Thank Rafael for the Post!
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