Brazil leads the ranking of most expensive electricity bill for the population

Brazil has the highest cost of residential electricity in relation to per capita income among 34 countries in the Organization for Economic Co-operation and Development (OECD). The ranking was prepared by the Brazilian Association of Large Industrial Energy Consumers and Free Consumers (Abrace Energia).

The indicator was constructed considering residential tariff data for Brazil, residential tariffs from OECD countries and GDP per capita, according to information from the National Electric Energy Agency (Aneel), International Energy Agency (IEA) and International Monetary Fund (IMF) . All data refers to 2022.

The survey shows that, within family budgets, the impact of energy expenditure weighs more heavily on Brazilians than on consumers who live in economies with higher incomes, such as the United States and Spain, and even among those who live in emerging countries. , such as Chile and Turkey.

Fees and subsidies

According to Abrace Energia, just over half (60%) of the electricity bill is linked to the generation, transmission and distribution of electricity. The remainder is made up of fees that pay for public policies, subsidies, taxes and inefficiencies in the sector.

A projection by the entity indicates that Brazilians will pay around R$10 billion a month more on their electricity bills in 2023, just to cover taxes and subsidies. When accounting for the entire year, the value reaches R$119 billion.

In the electricity bill, the consumer’s money guarantees resources for various sectors and funds, which are often unrelated to the area of ​​electricity. There are funds allocated, for example, to the rural and irrigation, water, sewage and sanitation segments. The biggest expense is the Energy Development Account (CDE), which should receive around R$30 billion from consumer tariffs this year.

The president of Abrace Energia, Paulo Pedrosa, explains that Brazilians pay dearly and several times for the cost of electricity.

“In addition to the residential electricity bill, every time a citizen buys a loaf of bread from the bakery, a t-shirt for their child or a bag of cement to build their house, for example, they are also paying for the energy embedded in those products. Nowadays, in a family, a quarter of what they spend per month is on energy”,

he said.

The high amount of subsidies also creates a kind of vicious circle. The higher they rise, the more the consumer pays in taxes – since taxes are levied, proportionally, on these subsidies.

“If there were a reduction in subsidies and taxes, the competitive advantage that Brazil has due to having a renewable matrix would become evident”,

highlights the executive.

Check out the subsidies and fees mapped out by Abrace and their costs for this year:

Energy efficiency: R$939 million – Fund with the objective of promoting efficiency in the electricity sector;

Research and Development: R$939 million – Fund to develop research in the sector;

Proinfa: R$5.45 billion – Renewable energy purchase program;

Energy Development Account (CDE): R$ 29.57 billion – Funds subsidies for regional development, sanitation, agriculture and even for expensive and polluting sources, such as coal and diesel;

Reservation: R$ 12.16 billion – Account that the consumer pays to guarantee the security of the system;

Electrical System Service (ESS) Charges: R$ 244 million – Covers the cost of thermoelectric plants;

Street lighting: R$5.34 billion – Amount paid to mayors to guarantee lighting in cities;

Non-technical losses: R$6.779 billion – Resources paid by the consumer to compensate for energy stolen from the system;

Taxes: R$58.44 billion

Energy cost/Per Capita Income

The indicator illustrates the cost of purchasing 200 kWh of electricity in each country compared to GDP per capita. According to Abrace, this comparison is more appropriate than a mere comparison between tariffs as it gives a sensitivity to how much the cost of the same volume of energy really impacts the population of each country.

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