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Future power prices in Brazil

Future power prices in Brazil

The country's stagnant economy has allowed the maintenance of very low power prices given the weakness of the demand side of the equation!

Anyone who needs to look long term has to consider a substantial increase in future prices. I mean the marginal cost of expansion (MCE).

It is the one that reflects the cost of new plants, to be built, and respecting the Brazilian power matrix (70% renewable and 30% thermal).

The MCE is in the range of R$ 320/MWh (USD 80/MWh). Welcome to a way more expensive power prices future!

Rafael Herzberg's picture

Thank Rafael for the Post!

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Matt Chester's picture
Matt Chester on Mar 27, 2019 1:13 am GMT

What timeframe do you expect these changes to come in, Rafael?

Rafael Herzberg's picture
Rafael Herzberg on Mar 27, 2019 9:12 am GMT

Matt, as soon as the economy starts (really) growing again. Right now Congress is supposed to evaluate very important reforms (soial security especially) and most importantly vote for it still in 2019. So I would say that a positive attitude torwads new investments - assuming that reforms will pass - will be there in 2020. Then the economy should turn around!

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