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Short-term electricity cost (Brazil)

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...

  • Member since 2003
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  • Jan 19, 2022

Short-term electricity cost

This week an article came out indicating that the CCEE (Brazilian Chamber of Electric Energy Trading) predicts that the annual average of the CMO (marginal cost of operations) of the electric sector should be R$ 82/MWh (1 USD = R$ 5.6)

For those who wish to consider this scenario, it is worth taking great care in managing the deregulated power contracts in their portfolio.

That is to say, if the consumption of electricity is lower than the contracted one, you will have to "settle" the difference. And if the spot price is around R$82/MWh, it is equivalent to saying that there will be a loss in this transaction, as fixed prices in the medium or long term are at least twice as high.

The good news is that it will be worth considering strategies to reverse these losses. For clients that I provided consulting services and were in this situation, a very successful cost arbitrage strategy was implemented!


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Thank Rafael for the Post!
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