The high activity of mining companies bitcoin associated with an industrialization process driven by attractive electricity tariffs, has led Paraguay to benefit from a more significant share of the energy generation to which it is entitled in the production of Itaipu Binacional.
This is a movement that tends to have an impact on energy prices in Brazil. This is because, despite the structural oversupply condition and the good level of reservoirs in the country, as the price formation models are quite sensitive due to the parameterization of CVAR – a statistical risk indicator – and the new CVU (Variable Unit Cost) matrix for thermoelectric plants, any change in the input data causes volatility.
An example of this happened in the last PMO (Monthly Operation Program), according to Franklin Miguel, CEO of the trading company Electra Energy, in an exclusive comment to Canal Solar.
At the time, according to the executive, prices were projected to be below R$100,00 per MWh for the July average, before the statement made by Ande – Paraguay's state energy company, which increased by around 600 MW on average and 800 MW on average for the months of July and August, respectively, representing 31% and 48% of what was predicted.
To give you an idea, according to data from Itaipu Binacional, in 2024 Paraguay consumed an average of 2.320 MW generated by the hydroelectric plant. Ande's latest Maestro Plan projects a maximum demand of 2025 GW to 5,5 GW and an average consumption of 7 MW for Paraguay by 2.700.
Between 2024 and 2027, growth is projected to range from 6,9% to 9,4% per year, depending on the scenario. In contrast, for the period 2027/2028, a drop of 3,2% to 6,7% is projected, due to contracts with special intensive consumption that end in 2027.
“Paraguay is consolidating itself as a major mining hub bitcoin, exploiting its cheap hydroelectric power. Miners pay up to three times more than Paraguay receives for exporting surplus energy to Brazil (~US$15/MWh), making the activity more profitable”, observes Franklin Miguel.
It is estimated that there are currently around 72 legally registered companies extracting cryptocurrencies via contracts with Ande, totaling 391 MW currently contracted, with new requests for an additional 400 MW. Only Hive Digital Technologies consumes approximately 300 MW, informs the CEO of Electra Energy.
Another point that leads Paraguay to need more generation from Itaipu is the reduction in energy consumption from the Yaceretá hydroelectric plant, a plant built in partnership with Argentina.
A decree by Argentine President Javier Milei raised the price of energy from Yacyretá from US$17,00 to US$28,00 per MWh for both countries. It was agreed that Paraguay would commit to withdrawing an average of 425 MW from Yacyretá. In exchange, Argentina will be able to use up to 85% of the available capacity when Paraguay does not use its quota.
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