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Rafael Herzberg
Rafael Herzberg
Expert Member
Top Contributor

Case 2: successful strategy for power contracting

A chemical industry client hired me to find and implement an energy solution for a unit that was to be opened in the northeast of the country (Brazil).

I recommended that we systematically prospect market offers for delivery after the unit's start-up, which would occur in one year. The CEO agreed!

A few months later, I suggested that we close a contract since prices had dropped significantly, to R$160/MWh. Subsequently, about half a year after the unit's commercial start-up, the spot price (PLD) shot up to R$800/MWh, given that the reservoir levels of hydroelectric plants in the northeast had dropped alarmingly.

I approached the CEO and suggested that he consider stopping the operations of this unit in the northeast, and paying the contracted volume of energy but liquidating it a at the power clearing house (CCEE), while the "spot" remained so high!

I made this suggestion because I knew that the electricity bill was the third largest cost of this operation. And I also knew that the other units in the group could meet the volume that the unit in the northeast would no longer produce. And so it was done! A very special/hefty result for months in a row! The unit's staff was allocated to do training and/or take vacations. Everyone won!