Electricity bills will come without any extra charge this year after the improvement in rainfall in the last wet season in Brazil, said Luiz Carlos Ciocchi, the director-general of national grid operator ONS.
This is possible because the reservoirs of the National Interconnected System (SIN) reached a water storage volume of 63.1% at the beginning of this year’s dry period, the best since 2012, compared with 35.3% last year, Mr. Ciocchi said. The official foresees a safer crossing from the wet to the dry period this year than happened in 2021. Hydroelectric power has a prominent role in Brazil’s power generation mix.
Brazil faced the worst drought in nine decades last year, which affected the reservoirs of hydroelectric plants and raised uncertainties about the supply of electricity. As a result, the country took measures including activating thermoelectric plants.
“We will have a very good year, very calm, which will not cause so much headache or cost so much,” the director told reporters. The dry season runs from the end of April to October.
Consumers currently pay R$14.20 for every 100 kWh consumed to cover part of the costs with thermoelectric generation. However, as of April 16, the Brazilian Electricity Regulatory Agency (Aneel) will eliminate the extra charge from electricity bills.
Brazil is expected to have up to 6,000 MW of thermal plants during the year. At the height of the water crisis last year, more than 20,000 MW of thermal plants were activated.
About the emergency contracting of thermal plants made last year until 2025, and that now are no longer necessary due to the improvement in hydrology, the executive defended the maintenance of the contracts, and ONS will tap these plants during the year. “Preserving the legal framework is very important. This brings confidence and stability,” he said.
According to Mr. Ciocchi, the cost of using these plants is unlikely to represent a significant cost for consumers. Next year is expected to be calmer from the standpoint of structure for the supply of electricity since large blocks of renewable power from wind and solar farms are expected to come into operation, although it is still difficult to predict the situation of the reservoirs.
On the other hand, Brazil still has limitations in power transmission from the North-Northeast system to the Southeast region. However, according to him, the integration is moving forward.
“Looking ahead to 2023 is like looking into a crystal ball. We still can’t say much. What we can say is that there is a lot of new generation coming in, a lot of transmission lines, so from the infrastructure standpoint, we will be better off than this year,” he said.
The reservoirs of the Southern subsystem, the only one below average, with about 50% capacity, are still a concern.
Source: Valor International