Brazil leads in a ranking that compares the impact of electricity costs on household income across 34 countries, including those in the Organization for Economic Co-operation and Development (OECD).
On average, Brazilians spend 4.54% of their annual income on electricity.
This rate far exceeds that of European nations like Spain, Germany, and Luxembourg, where the figures stand at 2.85%, 1.72%, and 0.35%, respectively.
The Brazilian Association of Large Energy Consumers (Abrace) carried out this study.
They considered residential electricity rates for 2022 and per capita Gross Domestic Product (GDP) data from the International Monetary Fund (IMF).
Victor Hugo iOcca, Energy Director at Abrace, points out the need to revisit Brazil’s energy sector costs.
He argues they are disproportionate when compared to other countries, considering income levels.
On average, a Brazilian household pays about $34 for 200 kilowatt-hours (kWh). In contrast, Polish families pay roughly the same but have twice the per capita income.
In Turkey, a country with a similar per capita GDP to Brazil, electricity is nearly half as expensive.
It costs about $17.9 for 200 kWh, making up only 2% of the average income. Different energy sources affect the cost of electricity.
Renewable sources are currently more cost-effective, while coal, nuclear, and natural gas are pricier.
Geopolitical risks also play a role. For example, the Russia-Ukraine conflict has pushed up gas prices.
Public policy has a significant impact on electricity costs. Canada, like Brazil, relies heavily on hydroelectric power.
Even in Wealthy Canada, Power is Cheaper Than in Brazil
Yet, electricity is cheaper in Canada. An average Canadian pays about $24 for the same amount of electricity that costs $34 in Brazil.
The U.S. has a diverse energy mix but still manages to have cheaper electricity costs, at $30.25 for 200 kWh.
Given its high per capita income, Americans spend less than 0.5% of their earnings on electricity.
Brazil’s high electricity costs also include taxes and subsidies, making up about 40% of the final price.
According to Abrace, Brazilians overpay by around $5 billion a month on these additional charges.
Thus, the organization is lobbying for some of these costs to be transferred to the national treasury.