With the return of consumption to pre-pandemic levels, a projection of a 3.4% increase in energy demand in August alone and an influx (the volume of water reaching the reservoirs) once again below the historical average, the crisis caused in the Brazilian electricity sector due to the lack of precipitation could advance until 2022.
Data from the Monthly Electric Power Market Review, prepared by the Energy Research Company (EPE), shows that in June, total energy consumption in the country increased by 12.5% from the previous year. same month in 2020. It was the highest demand. never recorded during that month of the year. In the first half of the year, the increase in energy consumption was 7.7%. The number of the first six months of the year also exceeded by 3% that verified in the same period of 2019, before the pandemic.
In June, growth was significant, particularly in industry (+ 19.4% compared to June 2020) and in trade (19.0%), segments whose activity is driven by the progress of vaccination and the recovery of the economy, with a reduction in restrictions adopted in the fight against the Covid-19 pandemic. During this time, the tanks continue to empty.
Updated reports from the National Electricity System Operator (ONS) indicate that the hydroelectric plants in the Southeast / Midwest subsystem – the largest and also the most concerning amid the current water crisis – are expected to reach at the end of August with only 21.7% of their storage capacity, and the projection for November varies from 11% to 8%. The data was published in the monthly operating bulletin, published last Friday (20), and reaffirms the worst shortage in the Brazilian power system in 91 years.
In the other subsystems, the reservoirs are expected to end the month in a better situation than expected, which however does not relieve the pressure on the National Interconnected Network (NIS), since the Southeast / Midwest reservoirs represent 70% of the l water for energy. generation in the country.
Not waiting for rain to raise the level of the dams before spring, the country is pursuing the strategy of intensifying thermal production so that the reservoirs fall as little as possible to the water expected for the last quarter. The end of the dry season usually takes place in October.
Electricity sector calculations
Water follows little. In the 12-month cumulative result ending in June, the volume that reached the hydroelectric reservoirs was one-third below average. During a public hearing in the Chamber of Deputies, Secretary Christiano Vieira da Silva, of the Ministry of Mines and Energy, said that “the expectation with this trajectory is to set new all-time low records from of September “.
Even with “desiccant” reservoirs and little rain as expected (in the case of the South, where rainfall has barely arrived), calculations made by the federal government still rule out rationing or shortages in 2021 and argue that the sector of electricity has enough installed capacity to meet demand. But consultants and experts point out that the risk has increased.
A market monitoring report prepared by PSR Energy, the segment’s leading consulting firm, reveals that accelerating the pace of demand expansion could result in an average load drop of nearly 7%. According to the cabinet, consumption increased by 7.5% in the first seven months of the year and, if that rate of expansion reaches 9% in the next four months, a rationing between 2.7% and 6, 8% of this demand will be required.
The assessment of the PSR is that “actions must be taken to avoid problems with the supply of energy and electricity, if inputs remain too low”.
The cabinet recalls that in fact, certain actions are taken by the government, such as thermal activation higher than those indicated by optimization models, relaxation of restrictions on multiple use of water, reduction minimum operating volumes of factories, the search for a new energy supply, among other actions on the supply, but actions on the consumption side are also appropriate, with compensation mechanisms, “with or without retribution ”. “The risk is not zero and increases a lot if demand grows more than estimated by the ONS”, specifies the consulting firm.
Earlier this month, XP increased its estimate of the risk of rationing for the next 12 months from 3.5% to 5%. Despite this, she still considers this risk “low”. The reason for the revision was the deterioration of the hydrological scenario.
Roberto Brandão, senior researcher at the Electricity Sector Study Group at the Federal University of Rio (Gesel / UFRJ), says storage conditions at the end of 2021 could mean problems in sight in 2022, as the electricity sector will reach the station in the most critical scenario ever experienced in the country. According to Brandão, changing another year of shortage could put the generation in trouble.
“The end of the dry season and the transition to the rainy season (October, November, December) is the big concern today. As time goes on, another concern will arise, which is next year’s supply, as we’re going to be spending the reserves which is something that will come on the radar. It is inevitable that the reservoirs will arrive at the end of the year in absolutely critical conditions and this makes the system vulnerable to another dry year, ”he emphasizes.
Despite the possible risks, the researcher believes the system has slack to function, but was not prepared for such an extreme event. “If we hadn’t lost almost three Itaipus in terms of water reaching the reservoirs, we wouldn’t have this problem. In fact, on the contrary, the system would be very loose, because from 2015 to today consumption growth has been weak. , by 3.5%, while installed capacity increased by around 20%, “he said.
The MME representative said on the same agenda in the House as the scarcity risk scenario assessments that were conducted using the repeat of the 2020 precipitation scenario to ensure more safety for the system.
“We imagine the same scenario, very unfavorable. If the rain comes, in October, we will have a much more comfortable situation, but we are working with the scenario of not having this rain. It is a more critical scenario for which the system is being prepared, ”he said, while defending the forecast to secure the supply.
Supply and consumption measures
With more expensive production due to the need to activate thermoelectric power plants, thus avoiding the use of water from reservoirs, electricity increased by 20.9% for the consumer in the last twelve months ending in July, according to data from the Broad National Consumer Price Index (IPCA). The high cost concerns consumers, including large ones, as revealed by a recent survey by the National Confederation of Industry (CNI).
The water crisis is appearing on the radar of business circles with fears of a further increase in the cost of energy, the possibility of rationing and the risk of blackouts. Fear of additional hurdles on the road to recovery leads energy-hungry segments to seek solutions such as moving production outside of peak hours (popular rush hours) and even using parts from suppliers. external to avoid consumption in its own manufacture (which is considered a form of energy import).
Government actions on consumption are expected in September. This is when, according to the Ministry of Mines and Energy, the demand reduction program will be put into practice – being prepared by the ministry and planned for months to expand measures that , until now, have focused on the governance of the electricity sector and the organization of supply, with little incentive to reduce the energy consumed by consumers (regardless of their size).
In a recent statement, Minister Bento Albuquerque said industries and small consumers – including individuals – will have an incentive to conserve energy. Participation will not be compulsory, which seems consistent, believes Gesel researcher Roberto Brandão, since, according to his assessment, “the situation is not irreversible” and the compulsory measures could be “hasty”.
Despite this, he believes that a major awareness campaign for rational use and more transparency on the criticality of the current scenario could work together in the medium term. “It would be highly recommendable at the moment. It is such a case: a certain effect does. And 1% reduction in demand in several months is enough. In a month it is very little, but a favorable variation of the demand is always positive, ”reflects.