Strategic decision making based on energy rates and costs from Itaipu's Multinational Energy Agreement Perspective

Abstract

The goal of this research is supporting strategic decision makers from countries that share and/or are impacted by cross-border energy generation projects. The methodology includes a case study of the energy surplus not used within the international agreement between two countries in LatinAmerica. The methodological procedure chosen allows the revision of the rates practiced in the energy market and the cost of building new transmission lines for energy trading with other South American countries. As a result, there are opportunities for the country with less energy demand (Paraguay) to sell its energy surplus about 456% more expensive than the price currently applied for selling to Brazil. The conclusion reached is that Itaipu's Multinational Energy Agreement members should start negotiations immediately and this research supports strategic decision makers from many countries to evaluate the best usage of Itaipu's energy surplus.