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Energy prices: the harsh reality in Brazil

The blue line shows the marginal operating cost of the electric system of the Southeast/Midwest region from July 2017 to July 2018

The red line is the annual average of the blue line, of R$ 375/ MWh

The green line is Eletropaulo's rate of R$ 235/MWh for a typical consumer, connected in medium voltage.

The analysis is simple: the average annual operating cost of the electric system is well above the ongoing rates granted by the regulator (ANEEL).

We thus have a picture that clearly shows a systemic imbalance. It is no wonder that investments in energy businesses have to include a major "country risk". It is no wonder that the financial cost of the moneys is - to include the power sector's risk = usually higher than 20% a year!

It's more than time to wake up to reality and turnaround the situation. Or is there any other consistent alternative?

1 USD = R$ 3,7

PS The above mentioned costs refer only to the "commodity" and do not include transmission and distribution costs

Rafael Herzberg's picture

Thank Rafael for the Post!

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Jim Stack's picture
Jim Stack on Aug 2, 2018 2:54 pm GMT

We had a group of over 30 college students studying at ASU Arizona State Univ this past year. They were learning about Renewable Energy and Recycling. They are very bright and will help transform Brazil in many ways. There is a lot happening there and by making some good choices they can prosper. 


Rafael Herzberg's picture
Rafael Herzberg on Aug 2, 2018 9:07 pm GMT

Hi Jim, thanks for the very interesting comments! Our greatest challenge these days with the ongoing leaders that we have in Brazil in the energy/power arena is finding a way to get good help. Unfortunatelly our leaders - as per the ongoing "Lava Jato" investigations - most of our leaders are more inclined to developing their own interests using energy companies controlled by the State s opposed to discovering the best solutions.  

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