Brazil and Paraguay reduce Itaipu energy tariff by 8.2%, hydroelectric power plant is the biggest in the Western world

The Board of Directors of the Itaipu Binational Hydroelectric Power Plant announced on Tuesday (9) new budget bases for 2022, which include a reduction in the energy tariff. The cuse (unit cost of electricity services) decreased from US$22.60 to US$20.75 per kilowatt month, a decrease of 8.2 percent.

The Itaipu Dam is a hydroelectric dam on the Paraná River located on the border between Brazil and Paraguay. The Itaipu Dam’s hydroelectric power plant produced the second most electricity of any in the world as of 2020, only surpassed by the Three Gorges Dam plant in electricity production.

The tariff, frozen since 2009, was reduced for the first time in 13 years. ENBPar (Empresa Brasileira de Participações em Energia Nuclear e Binacional), the state-owned company created to operate the hydroelectric plant after the privatization of Eletrobras, is responsible for its operation in Brazil.

The decision stems from an agreement between the governments of Brazil and Paraguay. According to the hydroelectric plant, the amount will reduce electricity bills for consumers of the electricity generated by the plant.

It also guarantees each country an estimated income of US$220 million. According to the Ministry of Mines and Energy, Brazil defended a value of US$18.97 per kilowatt month, while Paraguay wanted to maintain a value of US$22.60.

The ministry reports that the “estimated additional revenues will be used to maintain Itaipu’s transfer tariff of US$18.97 per kilowatt-month for Cuse, provisionally approved by Brazil’s electricity regulator Aneel in December 2021.” According to the ministry, there is “no impact on the end user.”

“The company’s operational and strategic projects, such as the technological upgrade of the plant, the Brazilian-Paraguayan integration bridge, and the revitalization of the Furnas high-voltage direct current (HVDC) system, among several others, will be carried out with the resources obtained for their execution,” it said.