Subsidies led the electricity sector into a “death spiral”, says secretary

The Secretary of Economic Reforms, Marcos Barbosa Pinto, said this Tuesday (May 7, 2024) that the granting of subsidies increased the electricity bill by 13%. He also said that the mechanism contributed to taking the electricity sector to a “horrible death spiral”as experts warn.

“[A conta] It would be 13% cheaper if it weren’t for that”, he said. In his view, the policy was a success up to a certain point, when it granted benefits to renewable energies, such as solar and wind.

The statement was made during lunch promoted by the FPE (Parliamentary Entrepreneurship Front). On the topic, he said that “there is no such thing as a free lunch”.

Marcos Barbosa Pinto also spoke about the State’s investment capacity and stated that the private sector should deal with this in the coming years. “Unfortunately, the Brazilian State will not have the capacity”he declared.

He also said that “lack of state planning” in previous governments to develop projects that would help attract private initiative.

The secretary also said that he will deliver a recommendation to the CVM (Securities Commission) next week with measures that contribute to simplifying the capital market.