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Brazilian power denominated in USD?
Brazilian power denominated in USD?
A complex regulatory framework takes care - theoretically - of everything that has to do with the country's electricity sector, so that it should be competitive and balanced.
But, in the real world, the cost paid by Brazilians, in $/MWh, is the highest among the BRICS.
Where is the "gotcha", if we have most of our energy matrix that is generated from renewable sources such as water, sun and wind?
My answer is: we do live in an industry where most of the costs incurred are based in USD.
* A large part of the electricity sector's production chain is imported, from photovoltaic panels to wind generators. International investors measure their businesses in USD.
* Likewise, a large portion of fuel from natural gas-fired thermal power plants is denominated in dollars (for example, contract with Bolivia).
* The country's largest hydroelectric power plant, Itaipu, which accounts for around 20% of the country's electricity production, has its revenues in USD as a result of the agreement with its partner, Paraguay.
Bottom line: For those who want to design scenarios in relation to electricity, it is worth considering that this commodity in Brazil, is, in fact, based in USD
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