The utility firmly opposes regulatory changes to pricing models, stating it sees no technical or legal basis for modifications to current parameters. Limp emphasized that price formation operates independently of agents’ commercial positions, relying instead on hydrological data, reservoir levels and load forecasts. Axia supports maintaining the current risk aversion curve parameters at 15.40, arguing this level best balances operational costs with energy security. The company noted that reduced out-of-merit thermal dispatch signals improved model adherence to actual system costs.
Brazil’s power matrix transformation underlies the pricing volatility, with installed solar capacity now exceeding 50 gigawatts. Excess generation during daylight hours drives prices to minimum levels, while the system requires thermal plants and increased hydroelectric output in late afternoon, sometimes ramping more than 40 gigawatts. This pattern produces daily price swings from floor to ceiling, behavior Axia considers natural and comparable to more mature international markets.
For the second half of 2026, Axia projects average settlement prices up to R$299 per megawatt-hour under its reference scenario maintaining current risk parameters. Recent weeks showed price declines attributed to improved rainfall prospects in southern Brazil, though potential El Niño development introduces uncertainty. The climate phenomenon typically increases precipitation in the south while raising temperatures and reducing northern rainfall, creating opposing price pressures depending on intensity and duration.
The company reported adjusted EBITDA of R$8.6 billion for the quarter, though shares fell approximately 5 percent as results came in 2 to 5 percent below market expectations. Net debt climbed to R$46.04 billion, though the debt-to-EBITDA ratio remained at 1.9 times. Axia holds significant uncontracted energy capacity in the North and Northeast submarkets, regions with lower liquidity than the Southeast-Center West, and continues efforts to expand sales in those areas.
This article was curated and published as part of our South American energy market coverage.
