Brazil: Power prices are rising due to 7 weaknesses.

Brazil: Power prices are rising due to 7 weaknesses.

1. Exchange rate

It has risen to a much higher level than historically, characterizing the weakness of the local economy.

2. Non-firm energies (solar and wind)

They require much greater investments for the same energy delivered by other sources.

3. Errors between regulation and practice

The disconnect between times officially defined as peak and off-peak, which no longer coincide (for a long time) with the real country curve of daily demand.

4. Power theft

They are as strong (more than 10% of all power delivered) as ever. Without being effectively restrained.

5. Crony projects

Generation projects without cost merit continue to rise - favoring selected groups.

6. Lack of a demand response program

On paper, it exists. In practice, it is only for show, that is, without it being widely offered.

7. Proportionation

Without ceremony, these 6 "items" are divided among all consumers, making Brazilian energy among the most expensive in the BRICS (Brazil, Russia, India, China and South Africa). And worst of all, our leaders have no motivation to change this scenario.

And so it is up to each industrial, commercial and institutional energy user to find out which alternatives should be evaluated to face this painful situation. The good news is that they exist! If you would like to know more about them, get in touch!