Level of hydroelectric plants will have to double in 2022, but rains bring confidence, says ONS

The level of reservoirs in the Southeast/Midwest region, where the main Brazilian hydroelectric plants are located, will practically have to double by the end of the wet period, in April 2022, for the country to return to some relief in energy terms, and that It is possible, ONS director general Luiz Carlos Ciocchi told Reuters.

According to the head of the National Electric System Operator, after the worst wet season in more than 90 years in the area of ​​hydroelectric plants, the rains started on schedule, unlike in 2020.

The agency stated this Friday (12) that rainfall in the Southeast/Midwest is estimated at 112% of the historical average in November, compared to 104% in the previous week’s report.

The ONS also increased the expectation of precipitation in the Northeast, pointing to volumes at 89% of the historical average in November, compared to 66% in the previous week’s forecast.

For the South, the projection was also increased to 61% of the historical average in November, compared to 58% in the previous week’s report.

With regard to the energy load, the ONS started to see an increase of 0.8% in Brazil in November, versus an increase of 1.1% in last week’s estimate.

Currently, the level of dams in the Southeast/Midwest regions is around 18.5%. The ideal, according to Ciocchi, is that the rains that started now could raise the level to close to 35%.

“With the rain that has already arrived, soil unit, even if we project the rains for 2020/2021, which were the worst in history, we would arrive [em abril] in 35%, 40% (in the Southeast/Midwest)”, he highlighted.

“This would be a level that we are going through the year 2022 like this one here. With caution, care and we can,” he said, noting that this level would avoid any risk of energy rationing.

Although the level of the dams will have to double by April, Ciocchi estimates this is feasible.

“If we reach 35%, it will be good… and it is possible… from a technical point of view, we will enter 2021/2022 with much more confidence than 2020/2021”, he reinforced.

The rains in January will be important to improve the situation of the reservoirs, he pointed out, noting that for now it is difficult to make accurate forecasts for the first month of the year.

costs

to afford the costs of activating more thermal plants to guarantee energy supply, the government created the water shortage flag, which is expected to remain in effect until April of next year.

According to Ciocchi, there is no prospect of abandoning the new flag.

Ciocchi signaled, however, that if the rains come in at or above expectations, the more expensive thermals will be shut down, easing cost pressure on energy.

The tariff flag account has been in deficit, despite the tariff increase, and the sector has been negotiating with the government a package for the electricity sector that would include financing from banks that could reach up to R$ 15 billion, as previously published by Reuters.

Recovery

The director-general of the ONS stated that after the biggest water crisis in more than 90 years, a project of two to three years will be needed to recover the level of the country’s dams.

“It is not possible to replenish reservoirs with a single rainy season. This is a program to be maintained and to work on it for two, three years. It has an enormous imponderable because it is not known how much water will come”, stressed Ciocchi.

This recovery of the reservoirs, he said, will not be done at any price or cost. Ciocchi stated that one cannot think of “filling reservoirs with thermal plants that cost R$ 2,400 per megawatt hour”.

Voluntary Reduction

This week, the National Electric System Operator suspended the receipt of offers in the voluntary reduction in electricity consumption program, which involved large energy consumers and other agents, as one of the ways the government could deal with the water crisis.

This occurred after the improvement of hydropower conditions and with the effectiveness of these emergency actions, said the director.

The measure, however, does not exclude the possibility of resuming actions in 2022, if the need for additional resources is identified to meet the demand for electricity in the country.

The suspension was the target of criticism, but the ONS director said they are unfounded.

According to Ciocchi, at this moment, there is no need for cutting-edge energy, which is the focus of the voluntary demand reduction program.

“This show was for the high end, for those 15 or 30 minutes you need 500 MW more to have no problem. It was successful and used, but when you don’t, it’s gone,” he said.

He explained that you cannot compare the price of a thermal with demand response. “To compare this is to compare oranges with watermelon. It’s one thing to pay dearly for energy for the whole month, another thing is power on a day from 17:00 to 17:30, for example. There’s no such thing as using a more expensive resource and leaving it aside a cheaper one.”