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Death spiral

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, analysis...

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Death spiral

Distributed generation is being super encouraged.

Photovoltaic solar energy is one example increasingly present on Brazilian rooftops. I mean, the consumer is producing locally as much as possible and the local utility sells "the difference" of what is needed to complete the total volume.

The more consumers go for this solution, the more pronounced the reduction in the utility's sales, for the same infrastructure in the electricity sector's value chain.

The regulator's response is, in the next tariff review, to recalculate the values now considering the same amortization of the investment, but with a smaller volume of energy delivered.

Thus, it is consumers who do not invest in distributed generation are the ones who actually subsidize those who invest.

It is high time to evolve the rate structure, so that it promotes a balance ...so necessary!

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Thank Rafael for the Post!
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