Brazil’s electricity regulator expects virtually all energy resources depleted by November

RIO DE JANEIRO, BRAZIL – Brazil’s National Electric System Operator (ONS) raised a new alert about the challenges Brazil’s electricity sector is facing this year due to the severe water crisis in the country’s hydroelectric reservoirs, projecting a depletion of virtually all energy resources by November.

The warning came after the agency raised the load forecast and considered a lower and more “realistic” thermal availability to meet demand for energy, according to a technical note published Thursday night July 22.

According to the agency, the scenario “results in a degradation of storage levels at the end of the dry period when compared with the results of the previous prospective study, particularly in the South and Northeast subsystems.”

“With respect to meeting the power requirements, very reduced surpluses are observed in the month of October, with the exhaustion of virtually all resources in the month of November,” ONS stated in its technical note.

The increase in the load forecast occurred after an increase in the activities of commerce and services, as well as the maintenance of the high pace of industrial production, particularly export-oriented activities, the agency said.

The updated study incorporates hydraulic restriction flexibilities currently authorized and considers the GDP increase to 4.5% per year, instead of the 3% that was used as a parameter until now.

“Thus, this technical note provides more realistic assumptions and aligned with the current economic moment and the conjunctural conditions of the SIN (National Interconnected System),” the agency said.

On the other hand, ONS stressed in a note that, in the two scenarios considered, “there is no risk of power outages, even with the worst hydrological conditions in the past 91 years.” Water is the main energy source in the country.

ONS also pointed out that “although the study suggests that the situation will remain sensitive until the end of 2021, the Operator is monitoring the unfolding of measures currently underway and acting within its powers to increase the supply of energy sources and ensure that electrical supply is not suspended.”

The ONS, along with other federal government entities, has been taking several measures to ensure uninterruped energy supply in Brazil.