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Brazil's electricity costs will rise amid supply fears

Thursday, July 22, 2021

Significance

The controversial privatisation comes as warnings of potential energy disruption increase due to the longest dry spell in the Central and South-east regions for 91 years. The water crisis has forced a shift to thermal power stations, whose higher costs push tariffs upwards.

Impacts

  • Higher energy tariffs will drive inflationary pressures this year.
  • Eletrobras’s privatisation may occur early next year, but could increase energy prices.
  • Significant energy investments are required to avoid future power disruption.
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