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Power prices falling (Brazil)....BE CAREFUL

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 13, 2023

Power prices falling (Brazil)....BE CAREFUL

Low power prices (free market) are perceived as great news for companies and institutions that want to close contracts. Of course!

I would like to draw your attention to a situation that deserves caution.

In my assessment, the prices offered are well below the one that would offer a minimally adequate remuneration for the capital invested in the generation plants.

That is, to the limit, if a contract is signed under these conditions, in the future, the supplier could claim "economic-financial imbalance" and then a negotiation or even arbitration would take place.

It will be worth analyzing this scenario and finding ways to mitigate risks. Prevention is better than cure!


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