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Power (Brazil): the "idleness" cost

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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  • Sep 25, 2020
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Power (Brazil): the "idleness" cost

Electric power experts estimate that there is a systemic idleness - for at least 5 years - in the supply of more than 10 GW.

So what?

Each GW of installed capacity requires investments of 1 USD Billion. The associated amortization is USD 0.2 billion/year in round numbers. Considering 10 GW, it is equivalent to USD 2 Billion/year.

What's the size of this cost?

The national power consumption, is roughly 70 GW average. It is equivalent to USD 3/MWh. or R$ 16/MWh.

The current power market price for future delivery, is around R$ 150/MWh.

It means that idleness, which is embedded in the "wire fees", charged by the local concessionaire is approximately 10%.

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