Brazil greenfield power generation projects under pressure
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Loading... - Eduado Heito
- 31 Mar 2023
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The combination of high capex levels and low energy rates in Brazil’s free (non-regulated) electric power market is holding back investment decisions in greenfield generation projects.
While the costs of materials, equipment and services for the deployment of new projects have not fallen to pre-pandemic levels, the country’s 13.75% basic interest rate has worsened financing conditions.
Meanwhile, with fewer thermal plants being dispatched amid favorable hydrological conditions, the "price for the settlement of differences (PLD)," which is the main price reference in the free market, has remained at the floor of around 70 reais (US$13.40)/MWh.
"Even self-production energy projects, which count on sectorial benefits, are more difficult to be feasible," Henrique Casotti, a partner at energy solutions firm Genco Energia, told BNamericas.
“The power generator is suffering, especially when it comes to greenfield projects, as the bill doesn't add up, since the costs are inflated. So this inhibits investments in generation,” Cláudio Ribeiro, CEO of 2W Ecobank (formerly 2W Energia), told BNamericas. Read More…
