Brazil’s main water reservoirs reach highest level in 10 years in June -ONS

RIO DE JANEIRO, BRAZIL – After a year of historic drought across the country, Brazil’s central hydroelectric reservoir system reached its highest level in a decade in June, according to ONS, the national grid operator.

Reservoirs in the Southeast and Midwest regions were at about 65% of capacity in June, compared with only 29.1% at the same time last year.

Water levels in these regions would reach 62.1% capacity by the end of July, while the northern region would be at 96.8%, the south at 86.6%, and the northeast at 80.9%.

Because Brazil relies heavily on hydropower, the level of hydro storage directly affects energy prices in both the free and regulated markets.

Esfera Energia’s head of strategic monitoring, Daniel Ito, predicts that the local PLD price index will increase in the free market as water levels in the Southeast and Midwest reservoirs decline until the next rainy season begins in October/November.

After that, PLD fluctuation will depend on rainfall, but a price explosion is not expected this year,” he said.

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