Solar energy feels modulation impact, but wind and hydro maintain strong results in August.
The energy generation landscape in Brazil presented distinct behavior among the main renewable sources in August. While solar photovoltaic energy registered significant reductions in its market value due to modulation, wind and hydro sources managed to maintain positive premiums, indicating resilience and competitive advantages over intermittency.
This dynamic reflects the complex interaction between the generation patterns of each source and how the Price of Settlement of Differences (PLD) is calculated throughout the day. Dicide, in its latest survey, details how this relationship impacted the results of each modality.
Discount on Solar: A Reality in August
Solar photovoltaic generation felt the effects of modulation across the country during August. In some regions, the discount was significant, representing a considerable portion of the average monthly PLD. In the Northern submarket, for example, the loss was R$53.55 per megawatt-hour, corresponding to over 42% of the local average PLD value. The Southeast/Midwest was not far behind, with a reduction of R$50.71/MWh.
Despite these figures, Dicide’s analysis points to an improvement compared to the previous month. The discounts applied to solar energy were smaller in July in all regions, particularly in the South and Southeast, where the drop was more pronounced. Comparing with August of last year, the situation also appears more favorable, with reductions in discounts in practically all areas, especially in the South and North.
Wind Secures Modulation Advantage
Unlike solar, wind energy maintained its trajectory of positive premiums in August, establishing itself as a source with strong economic attractiveness. Gains ranged from R$5.05/MWh in the Southeast/Midwest to R$9.77/MWh in the Northeast, where this premium represented about 7.8% of the monthly PLD.
However, the comparison with July shows a slight deterioration in this performance in three of the four submarkets. Premiums decreased in the Northeast, North, and South. Only in the Southeast/Midwest was there an advance, with the index moving from R$4.34/MWh to R$5.05/MWh. Regarding August 2025, wind also saw its premiums fall in some regions, but the Southeast/Midwest stood out with a significant jump, from R$0.21/MWh to R$5.05/MWh.
Hydro Power Leads Modulation Gains
Hydroelectric generation consolidated itself as the main beneficiary of modulation in August, presenting the highest premiums among the analyzed sources. Values ranged from R$12.75/MWh in the South to an impressive R$30.98/MWh in the North, representing a gain of almost 25% over the region’s average PLD.
Still, the comparison with July reveals that hydroelectric plant premiums registered decreases in all submarkets. However, compared to August of last year, there was significant growth in the Southeast/Midwest, Northeast, and especially in the North, with an increase of over 87%. The only region to experience a negative impact was the South, with a retraction of almost 48%.
Dicide’s analysis highlights the importance of modulation as a factor that directly influences the profitability of renewable energy sources. While solar is still seeking to optimize its position in light of this dynamic, wind and hydro demonstrate, with positive results, the robustness of their generation profiles. The future of Brazil’s energy matrix will certainly continue to be shaped by these complex interactions.
