The solar energy sector combined with battery energy storage systems (BESS) should reduce its operational costs in Brazil by up to 40% over the next decade. The estimate is part of a study by consulting firm McKinsey & Company presented during a sector event in São Paulo. The projection points to a leap in competitiveness in the Brazilian energy market.
According to the study, the Levelized Cost of Firm Energy (Firm LCOE) is expected to fall from $65/MWh to $39/MWh by 2035. This indicator incorporates the firmness premium to guarantee predictability in electricity delivery to consumers.
With this reduction, Brazil will take a prominent position worldwide in the sector, ranking only behind China in the lowest cost forecast. The high tariffs charged by utility companies also serve as an incentive for consumers to transition to self-generation of energy.
Mikael Djanian, partner at McKinsey & Company in Brazil, commented that comparing with other countries, Brazil only loses to China in terms of firm LCOE. The country's strategic position in the global renewable energy market should be reinforced with these technological and economic advances.
