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Brazil: Will electricity tariffs go up?

image credit: Power prices, rates and cost references in Brazil

Brazil: Will electricity tariffs go up?

A simple and powerful reference for future tariffs is the marginal cost of expansion. 

When calculating the amortization cost (of new power plants), including the internal rate of return and the country risk, you will quickly come to the conclusion that this value is much higher than the tariffs currently established by ANEEL (regulator).

Then there is a conflict. To maintain the tariffs currently granted, a viable future cannot be foreseen for expanding the supply side..

The way out of this situation is to go to a list of programs that have proved successful in other countries. They encourage alternatives (more economical) than the expansion of generation capacity to meet increased demand.

It's time to wake up! Urgently!

Rafael Herzberg's picture

Thank Rafael for the Post!

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