The cost of Brazilian power will rise

The cost of Brazilian power will rise

The cost of electric power in Brazil has two main components. 1) The inherent to generation, transmission and distribution and 2) the "extras".

The "extras" are carefully established by politicians, regulators and the executive branch to ensure that their specific (questionable) interests are served. They involve dubious plants (called "tortoises" in the industry's jargon) associated with sweet heart deals, sources that are not necessarily competitive, and the decision to favor run-of-river plants (and not with reservoirs).

The inherent as mentioned above is a cost that should go up a lot. Because the matrix is ​​changing to meet a strategy of privileging intermittent sources (solar and wind) that have an important underlying cost of non-intermittent, "back-up" sources.

It means that investments in installed capacity will have to be increased, above the traditional one, to meet the intermittency. And, of course, this is a cost that will be passed on to energy consumers.

Too bad we don't have in our country a strategic look to the future, aiming at competitiveness.