Consulting
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Consulting Services
Energy Consulting
Price
projection
The spot price (PLD) and the contract market (PPAs) are at the center of investment decisions in the power sector.
The spot price is fundamental point to be analyzed in any power market, and in Brazil, it takes on special significance due to the composition of our generation mix, with hydroelectric plants still representing more than 50% of total installed capacity. The contract market has a strong correlation with the spot price in the short term and aligns with the Cost of New Entry (CONE) for new plants in the medium and long term, known in Brazil as the Marginal Cost of Expansion (CME).
Given the characteristic of hydroelectricity and its natural variation based on water inflow and reservoir levels, there is a tendency for spot price volatility in contexts of higher uncertainty regarding inflows combined with lower reservoir levels. The uncertainty of spot prices can be seen as either a risk or an opportunity, depending on how the player positions themselves in the market. Understanding the dynamics of spot price formation is crucial for decision-making, both in portfolio management and in asset transactions (M&A).
Envol
Solutions
How can Envol help?
How can
Envol help?
Discover our solution
Envol consultants have been involved in over 200 projects concerning spot price and market projections, both for the short and long term. These studies underpin asset pricing in M&A processes and assist in portfolio management for generators, as well as in helping consumers to make decisions regarding contract purchases. Our methodology for projections also takes into account the fundamentals of the Brazilian power system, without disregarding statistical and mathematical price concepts.
The spot price projections (PLD) and the contracts market are fundamental pieces for decision-making
