Brazil set to slash spot power prices

Tuesday, October 14, 2014

The price of wholesale energy for short-term contracts in Brazil could be slashed by more than half, under plans outlined by local sector regulator Aneel.

The watchdog released a statement Tuesday proposing a spot-market price cap of 388 reais (US$162)/MWh, down from the current limit of 823 reais/MWh.

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Under the plan, the minimum price will rise to 30.3 reais/MWh from 15.6 reais/MWh.

The changes will be put to public consultation from October 16 to November 10. If approved, they will take effect on January 1.

Spot power trading has become increasingly important in Brazil as ongoing drought cripples hydroelectric output.

Most of Brazil's short-term power contracts come from thermoelectric plants, whose prices are up to six times higher than hydropower.

BNamericas will host its 11th Southern Cone Energy Summit in Lima, Peru, on November 12-13. Click here to download the agenda.