Brazil’s benchmark electricity price rose to a record high as a lack of rainfall during the traditional wet season drives down hydro-power dam levels.
The weekly spot price, known as PLD, rose 69 percent to 822.83 reais ($340.60) per megawatt-hour for the southeastern and central regions, the country’s wealthiest and most populated, from 486.59 reais last week, according to data published today on the website of the energy trading board, or CCEE. The previous record was set in July 2001 at 684 reais, CCEE said in an e-mailed response to questions.
While the bulk of Brazilian energy is sold through fixed-contracts, generators are allowed to sell excess production on the spot market, where it can be bought by industrial consumers as well as distributors who aren’t fully supplied through fixed-contracts. Hydro-power accounts for about 70 percent of Brazil’s electricity production.
Water reservoirs in the southeastern and central area are at 40.7 percent capacity, compared with the 32.9 percent a year ago, when spots prices also jumped. The difference with last year is that dams started the rainy season in November at low levels and recovered with rains that fell between January and March, according to Rodolfo Salazar, commercial director of electricity trader Bolt Comercializadora.
“This year, it’s not raining there during the rainy season, which means water availability is low,” Salazar said in an interview. The situation signals low water availability in the drier, winter months between May and October, he said.
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