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Energy: the necessary and urgent evolution

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,...

  • Member since 2003
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  • Dec 20, 2021

Energy: the necessary and urgent evolution

About a century ago, the tariff model we know today was created.

It is especially focused on the variable cost that had the greatest importance in the production of energy, which is the source, whether coal, gas, oil or even nuclear.

Now, the world is progressively migrating to renewable sources (hydro, wind, solar, etc.), and the most important cost component becomes the amortization of the invested capital.

This is a very important shift that creates new paradigms. The main one is the need to transform the tariff model to adequately reflect the new costs.

This is because economics shows us that the energy commodity can only become competitive/profitable if there is a well-identified cost structure that well represents the supply chain.

And to our satisfaction, a new tariff model can be much simpler, more powerful, more easily understandable than the current one.


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Thank Rafael for the Post!
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