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Power prices and added value

image credit: Rafael Herzberg
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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  • Mar 12, 2021

Power prices and added value

The Brazilian productive activity is essentially of "low added value". Of course, we are a country that is still a long way from developed countries that are characterized by "high added value".

So the cost of energy has a relevant weight in our companies. It is Top 10 and often Top 5.

As the cost of Brazilian energy (USD/MWh) is the highest among the BRICS - our competitors - we should face at least the following challenges:

1. How to reduce power theft?

It represents more than 10% of the electric energy produced in the country and is they paid for by the whole community?

2. How to mitigate the "duck curve"?

The increasingly important penetration of solar energy creates a new challenge for dispatching the integrated system and associated with a cost.

3. How to manage the hydro reservoirs?

The environmental requirements have led the system operator to "open the floodgates", which, on the other hand, demanded more dispatch of thermal plants, which are much more expensive.

4. Run-of-river plants

In recent years, practically only run-of-river power plants have been built. What makes the annual dispatch more expensive because there are many months when the flow of rivers is much lower.

In the meantime, we remain as laggards!


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