By Brazil Stock Guide – Eletrobras (ELET3.SA) and Eneva (ENEV3.SA) are emerging as the main beneficiaries of Brazil’s increasingly volatile short-term electricity market, according to a report by BTG Pactual. The analysis was first published by Reuters and republished by Investing.com.
BTG highlighted that recent regulatory adjustments — including more conservative assumptions for drought scenarios — have made spot prices more sustained and subject to stronger intraday swings. While long-term power contracts remain pressured by an oversupply driven largely by solar capacity expansion, short-term trading has opened opportunities for companies with the flexibility to sell energy under a merchant model, without fixed-price contracts.
“The long-term winners in this volatile scenario are those who know how to manage it and have assets that can help stabilize the country’s energy system,” analysts Antonio Junqueira, Gisele Gushiken and Maria Schutz wrote.
Not every company can adapt to this model, they said. “Not everyone can choose the ‘merchant’ option in the trade-off of energy sales. Eletrobras can. Not every player has the expertise, projects and management to add thermal capacity to the system. Eneva does,” the analysts added.
BTG estimates that if average energy prices reach 200 reais per megawatt-hour over the next five and a half years, Eletrobras could deliver an average dividend yield of 18% per year. Eneva’s fair value could climb 18% — about 3 reais per share — if it secures a significant share of the government’s 2026 capacity auction.
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