Power prices volatility in Brazil
- Feb 24, 2018 2:15 pm GMTFeb 24, 2018 2:15 pm GMT
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The capacity of the reservoirs that feed the hydroelectric plants - which repredepends on the nature!
This conclusion derives from the volatility observed in the CMO prices vis-à-vis water reservoirs, as shown in the charts, taken in the last 12 months:
- CMO - marginal cost of operation - is the cost to produce an additional MWh with the available generation system
- H20 - stored volume - is the energy reserved in water, for the dispatch of hydroelectric plants
The message is simple: anyone who has the mission to outline the power contracting strategy of h a company or institution should necessarily analyze CMO and H2O to find out when to close good short- and medium-term deals.
For the longer term, the criterion should be the marginal cost of expansion, which is the cost of new plants to be built, considering the power matrix contracted for the future.