Energy and exchange rate (Brazil)
Investments in the production chain of the electricity sector are strongly linked to the Dollar.
Historically, they are referred to as Dollar/GW installed in generation, transmission and distribution.
Thus, the cost incurred in delivering energy to consumers – industrial, commercial, institutional and residential – is linked to the Dollar.
The challenge always arises when the rates granted by ANEEL and the prices charged by the free market are misaligned with the variation of the Dollar.
If they are below, investors tend to lose interest in expanding supply.
If they are above, customers are exposed to a lack of competitiveness, harming the country’s GDP.
This issue becomes more important now that we have seen a strong increase in the Dollar throughout 2024.
Will we have a virtuous market balance or will we prefer a populist approach?
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