Brazil’s 2nd largest thermal plant begins operations on Thursday (September 16)

RIO DE JANEIRO, BRAZIL – ANEEL (Brazilian Electricity Regulatory Agency) approved the start of operations of the GNA 1 thermal power plant, Brazil’s second largest, as of Thursday, September 16. This is yet another reinforcement for the electric sector amid the most critical period of the hydroelectric crisis.

With a generation cost of R$552 (US$106) per MWh (megawatt-hour), the thermal plant will add 1,338 MW to a system that needed 5,500 MW to guarantee supply until the start of the rainy season, according to the latest ONS (National Electric System Operator) projections.

“The addition of this plant will be of great benefit to the sector, particularly in the current situation. Energy will be injected into the system in the southeast region, which has been most affected by the drought in its reservoirs,” said ANEEL’s general director André Pepitone in a statement.

The energy generated by the thermal plant is capable of supplying 4 million inhabitants. Because it is located in the Southeast region, it is at less risk of its delivery capacity being impacted by bottlenecks in the country’s energy transmission system.

The thermal plant was expected to start operations in the first half of the year, but the schedule was postponed due to issues during the equipment installation and commissioning phase.

The project is controlled by Prumo, owner of the Açu Port, BP oil company, and Siemens electrical equipment manufacturer. At first, it will operate with gas imported on ships, but the plan is to connect a pre-salt pipeline to the port to supply the plant.

Contracted in a 2017 energy auction, GNA 1 has a lower production cost than the emergency thermal plants contracted by the government to address the water crisis. Nevertheless, it is expected to operate at full load in the coming months, further pressuring the electricity bill.

Its investors are building another thermal plant in the port, the GNA 2, with a 1,672 MW capacity, expected to start operations in 2024. By then, the Port of Açu will become the largest thermal power complex in Brazil, according to ANEEL.

On Saturday, September 11, Minister of Mines and Energy Bento Albuquerque visited the north of Minas Gerais for the inauguration ceremony of a transmission line that increases the energy transmission capacity from the Northeast to the rest of Brazil by 25%.

With capacity to transport 1,300 MW, the project will improve the use of the Northeastern generator park, which has developed rapidly in recent years with the construction of wind and solar parks.

“RATIONING IS RULED OUT”

At the event, Albuquerque reiterated that, with the measures the government has adopted, the risk of energy rationing in 2021 has been ruled out. However, the government is beginning to look at 2022 with concern and has approved the emergency contracting of thermal plants for another 5 years.

The hiring is justified, according to the ONS and the EPE (Energy Research Company) evaluation of the scenario, in view of the scant summer rains. Brazil will start the year with its reservoirs at very low levels and it needs to expand its generation capacity to prevent rationing.

On Tuesday, September 14, hydroelectric plants’ reservoirs in the Southeast and Midwest were at 18.38% of their energy storage capacity. The ONS forecast is that, with the measures to reinforce supply and contain demand, they will reach 11.3% by November.

The Ilha Solteira reservoir at the largest hydroelectric plant in the Paraná River basin, reached the minimum limit for operation of the Tietê-Paraná waterway, set at 323 meters above sea level, which had not occurred since the 2014/2015 drought, when transport was completely paralyzed.

Under normal conditions, power generation at the plant would be compromised, but this restriction has been relaxed and the operator continue power generation as long as the water level is above 314 meters. Considering this limit, the reservoir is still at 56% of its energy storage capacity, says the plant’s operator, CTG (China Three Gorges).