Alternative Energy Sources Are Solutions to High Hydroelectric Power Prices, Solar and Wind Energy Gain More Spotlight in Brazil

Reduction of Water Reservoir Levels Led to the Activation of Thermoelectric Plants, Increasing Electricity Bills.

The arrival of the drought further reduced the level of the country’s water reservoirs and increased the costs of electricity production, raising the electricity bills for Brazilians. For the month of May, Aneel (National Electric Energy Agency) activated the red tariff flag level 1, which charges R$ 4.169 for every 100 kWh consumed. With no expectations of lowering production costs, consumers are alert to the possibility of using complementary sources to mitigate the impacts on their wallets.

• Thinking about the environment, Brazilian oil company Petrobras reuses enough water to supply a city of 1.3 million inhabitants
• The amount of energy generated by thermoelectric plants rises, and with it, so do the electricity tariffs
• High freight rates can affect the global economy and increase prices of products on Brazilians’ tables
• A company in the water, wind, and solar segment is seeking a maintenance technician and planning engineer on this day 18
• Construction of the desalination plant in Ceará will begin in 18 months

According to Aneel, the hydrological balance for 2020-2021 recorded the worst historical result for the National Interconnected System (SIN), measured since 1931. With the onset of the dry season and the reduction of reservoirs, the situation became even more unfavorable for electricity production by hydroelectric plants, making the activation of the thermoelectric park necessary, which increased costs.

Already informed about the impacts on their electricity bills, consumers are concerned about how long the situation will last. A projection made by MegaWhat Consulting states that the red flag level 1 will likely be activated in July, August, September, and October. In the remaining months of the year, the forecast is for the yellow flag, which charges R$ 1.343 for every 100 kWh consumed.

Energy Crisis Discarded

The National Electric System Operator (ONS) guarantees that Brazil is not at risk of facing an energy supply crisis but confirms that higher costs are expected to persist until the end of the year. 

As a preventive measure, the Electric Sector Monitoring Committee (CMSE) approved additional measures to meet demand, such as increased activation of thermoelectric plants and even the import of energy from other South American countries, such as Uruguay and Argentina. 

Wind and Solar Energies Gain Prominence

The challenging scenario opens the door for alternative energy sources to gain more prominence in the country, such as wind and solar. Consumer interest has been growing in recent years and can contribute to the consolidation of the use of these alternatives in the medium term.

Wind energy reached 18 GW of installed capacity, according to the Brazilian Wind Energy Association (ABEEólica). The photovoltaic industry, on the other hand, registered a 70% increase in solar panel installations last year compared to 2019, according to information from the Brazilian Association of Photovoltaic Solar Energy (ABSOLAR). The expansion corresponds to a power of 7.5 GW, roughly half of the capacity of the Itaipu hydroelectric plant.

Generator Rentals

In the short term, the water crisis faced by the country is likely to lead to an increase in the use of temporary energy. To mitigate risks and save on electricity bills, consumers are expected to demand the rental of generators.

For companies and industries, these devices are often used as part of energy cost planning. Generators are also commonly requested by rural properties, especially the more remote ones, for the implementation of self-production systems.