Energy: the fair power price
A recurring question that arises, especially among free (deregulated) corporate and institutional energy users, is about the “equilibrium” price of electricity.
It serves, in principle, to assess whether current prices are “high”, “low” or just right!
In the real, everyday world, the market price is the one where “supply and demand meet”.
But what would then be a “technical” price that reflects a systemic balance?
I really like using the MCE concept – Marginal Cost of Expansion.as it reflects a fair return on the capital invested to increase the generation through new plants – to be built.
If you want to know the MCE calculation, which is not complicated, and even obtain a spreadsheet,, send me an email to rafael.herzberg@gmail.com including an invitation and a link to a virtual meeting at your preferred date and time, considering that I am based in São Paulo, Brazil (GMT-3).
