August 3, 2021

Brazil drought threatens country’s electricity supply

The drought that has raged in Brazil for several months is a source of many concerns. It threatens the country’s electricity supply, which is highly dependent on its hydropower plants, increases the cost of energy and risks jeopardizing agricultural production and the recovery of the economy.

The lack of rains in the southeast and center-west of the country is even the worst in nearly a century, the Brazilian government has estimated. And the situation will hardly improve, with an austral winter characterized by low rainfall in these regions.

In the south of Brazil, this drought is linked to the climatic phenomenon La Niña, explains to Agence France-Presse (AFP), Pedro Luiz Côrtes, professor of the Institute of Energy and the Environment of the University of São Paulo. Active from September to early May, it could even resume at the end of September, when the rainy season should normally begin. “In fact, we are going to have a year and a half or two years of dry season”, predicts the researcher. For the situation in west-central Brazil, Mr. Côrtes points to a rainfall deficit of nearly a decade due “To deforestation in the Amazon, which reduces the humidity in the atmosphere”, a problem that can become “Chronic”.

A power plant reservoir level reduced by 30%

The first consequence of this phenomenon, the drought affects the operation of the hydroelectric sector, which contributes 63.8% to Brazil’s electricity production potential, and of which most of the factories are located in the south and center-west of Brazil. Brazil.

According to the National Electricity System Operator (ONS), the average level of the reservoirs of these plants had reduced at the end of May to 32%, the worst since the water crisis of 2015, compromising their capacity to produce electricity. energy in the coming months. 1is June, the National Water Agency (ANA) decreed until November the “Critical situation of scarcity of water resources” in the Parana basin, an area with the highest hydroelectric potential in the country. This will allow it to temporarily modify the rules for water collection. ” Firstly “, specifies the resolution of the ANA, “The need for restriction” for irrigation and human consumption “Not planned”.

But to preserve its reserves, the electricity sector wishes to relax the minimum flow rules of dams, which could have a negative impact on other uses of resources, such as river transport or irrigation. In order to save reservoirs and avoid a giant blackout or rationing, like that of 2001, still anchored in the memory of Brazilians, the government has also started to solicit available thermal power stations. However, according to Pedro Luiz Côrtes, for whom the urgency is now to sensitize the population, these thermal power stations are “Secondary sources” :

“Even added to other sources of electricity, such as the growing wind farm, they will hardly compensate hydropower plants if energy consumption increases significantly with the resumption of economic activity. “

The Brazilians will in any case feel the effects of the crisis in their portfolio: due to the higher operational cost of thermal power plants, the National Electric Energy Agency (Aneel), after a first readjustment in May, triggered for June its highest extraordinary rate, an additional tax of 6.24 reais (1 euro) per 100 kilowatt-hour (kWh) consumed.

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Large agricultural regions affected

Another consequence, the drought also affects important agricultural regions and threatens the crops of sugar cane, coffee, oranges, but also corn and soybeans, putting their prices under pressure. Poultry and pork, fed with rations of cereals and oilseeds, should therefore also cost more, warns André Braz, economist of the Getulio Vargas Foundation (FGV). The industry is, for its part, “Already very affected by the rise in commodity prices and the energy issue constitutes an additional challenge”, adds the specialist.

Consulting firm MB Associados is now forecasting a Consumer Price Index (IPCA) to rise 5.8% this year, above the ceiling set by the government. This inflationary pressure could lead the central bank to increase its interest rates again.

As for the Brazilian GDP, after having fallen by 4.1% in 2020, it could this year grow in the same proportion. But for Sérgio Vale, chief economist of the MB Associados cabinet “The recovery of the economy (…) In progress “ could see his rhythm “Affected” by the energy issue and the imminent arrival of the third wave of Covid-19.

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The World with AFP