Drought: Brazil’s electricity sector rules out rationing in 2021, admits bills will increase

RIO DE JANEIRO, BRAZIL – The measures announced by the government to ensure the supply of electricity this year, such as the operation of all available thermoelectric plants and the increase in energy imports from Argentina and Uruguay, should rule out the risk of rationing in the short term.

The statement was made on Tuesday, June 15, by directors of the National Agency of Electrical Energy (ANEEL) and the Electric System National Operator (ONS).

They attended a public hearing in the Mines and Energy Committee of the Chamber of Deputies. The debate was proposed by deputies Christino Áureo (PP-RJ) and Danilo Forte (PSDB-CE) and discussed the water crisis.

According to the ONS, the Southeast and Midwest hydroelectric reservoirs, which account for 70% of the country’s storage capacity, are currently experiencing the worst drought since the indicators began to be measured in 1931. Storage levels now stand at 30.8%. In some power plants, such as Itumbiara and Água Vermelha, it stands at around 10%.

Read also: Brazil’s government working to avoid electricity rationing during drought

“With these measures, we ensure that we will reach the end of the year with the energy and power needed for society’s consumption,” said ONS Director General Luiz Carlos Ciocchi.

According to the entity, with the announced measures the Southeast and Midwest reservoirs will reach November, when the rainy season starts, at 10.3% capacity. Otherwise, they would reach at 7.5%.

Electricity bills affected

ANEEL’s general-director André Pepitone recognized the gravity of the hydric crisis, but said that the current situation in Brazil is better than in 2001, when rationing was imposed.

According to him, factors like the expansion of transmission lines and the inclusion of renewable sources in the electricity matrix (such as solar and wind) left the country better prepared for this moment. “We have a much more robust energy security today than we did 20 years ago,” he said.

Pepitone admitted, however, that the use of thermoelectric plants will increase Brazilians’ electricity bills.

The additional cost of running these plants is estimated at almost R$9 (US$1.7) billion between January and November, values that will be passed on to consumers in 2022.

Gilvan Sampaio, general coordinator of Earth Sciences at the National Institute for Space Research (INPE), also invited to the public hearing, said that the dry season is starting earlier and lasting longer each year across Brazil. “This has been recurrent in the last 20 years,” he said.

Government participation

During the public hearing, deputy Arnaldo Jardim (Cidadania-SP) said he was against the government’s idea, disclosed in the press, of creating a new administrative agency to coordinate the action plan against electricity rationing. “Instead of establishing new management forms, it would be better to strengthen the current entities,” Jardim said.

Deputy Danilo Forte called for greater government participation in the discussion on structuring measures for the electric sector, such as market liberalization and distributed generation. He was supported by the committee’s president Edio Lopes (PL-RR). “We need a firmer position from the government,” said Lopes.

Deputy Christino Áureo highlighted the importance of diversifying the Brazilian energy matrix in recent years, but said that the country can not give up on fossil fuel sources. “We must not demonize the use of fossil sources, particularly thermal power plants. They will provide us with much support in this transition”, he stated.

Deputies Padre João (PT-MG) and Elias Vaz (PSB-GO) opposed the increase in the electricity bill. “If there is one thing we can’t do, it is to increase the burden on the productive sector and workers, who are currently in a difficult situation,” said Vaz.