Pricing capacity, green power could help Brazil market

  • Thursday, September 1, 2022

  • Keywords:Pricing capacity, green power, Brazil market
[Fellow]Brazil's power market will not need to choose between sustainability or generation capacity if both are priced efficiently.


Brazil's power market will not need to choose between sustainability or generation capacity if both are priced efficiently.
Brazilian energy consumers' association Abrace found that 70pc of power consumers believe environmental protection should be a priority, even if it limits resources such as gas, oil and coal. But the same research also showed that 58pc of consumers would not accept paying more for renewable power.
Green energy prices are not a major hindrance for consumers in Brazil, as renewable power becomes more efficient with technological advancement and government incentives boost competitiveness. The International Renewable Energy Agency show this is a global trend in its Renewable Power Generation Costs 2021 report, with estimates of solar power costing $0.048/kWh and onshore wind costing $0.033/kWh, while calculating fossil fuel cost around the range of $0.05/kWh-$0.17/kWh.
Still, it is difficult to say if the market price for green energy sources is accurate, since there is currently no way to put a price on each source's ability to supply on a moment's notice or for sustainability.
Critics of Brazil's new capacity tender model, which is limited to thermal generators, are questioning its rules, as these auctions are not treating capacity as an attribute. Donato Filho, managing director of power efficiency company Volt Robotics, says a less-regulated tender that could offer the capacity attribute — including new sources that might become viable with time, such as batteries — would be open to all sources.
This would ensure the lowest-priced options could compete in power auctions. He also said the tender's rules do not specify a product for plants to supply and asks instead for generators to be available for grid operator ONS' needs. This leads to higher prices since generators have to be available at all times to supply power for an unspecified amount of time, but that issue could be addressed by clear specifications on the lead time required for the power and for how long plants would have to supply energy, he said.
There is still a need to educate consumers on the benefits of green power, but sustainability's impact is here to stay, energy trading firm 2W Energia's operations and marketing vice-president Claudy Marcondes said.
Businesses will increasingly need green power to fit into international supply chains, some of which require net-zero commitments from all suppliers. Residential consumers will see this as an added value to their power consumption.
Energy trading firm Comerc is focusing its efforts on solar power, with multiple solutions for differently sized clients. From building and managing plants for bigger consumers to signing long- and medium-term bilateral contracts and even offering distributed generation options to smaller clients, Comerc vice-president Marcelo Avila said the company's products are already mature after years of developing these projects.
  • [Editor:kangmingfei]

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