Hydropower shortage from drought raises electricity surcharge in Brazil

Brazil’s Aneel (Agencia Nacional de Energia Eletrica) has announced that the surcharge on electricity rates in the country will rise by 43% in November as a result of an ongoing drought.

Aneel’s Romeo Rufino said the new rate would occur “given the severe situation of the reservoirs. We are entering the fourth consecutive year of low hydroelectric storage levels.” Hydroelectric plants normally meet more than three quarters of Brazil’s electricity demand, according to grid operator ONS.

The “red flag level 2 levy” will be raised by BRL5 (US$1.50) per 100 kWh, according to data from BNamericas. In October, the red flag level 2 tariff base was increased by BRL3.50 (US$1.11) per 100 kWh, a 17% increase on September’s red flag level 1 rate. Brazil’s four regional sub-systems are allocated green (cheapest tariff surcharge), yellow or red flags to reflect the additional cost of electricity generation during times of low rainfall. Red level 2 is the highest surcharge.

Rufino says, “There is no risk of shortages, we have other sources of energy generation. But the need to use expensive [thermoelectric] plants is increasing.” In addition, the energy ministry said in September that it was increasing electricity imports from Uruguay and Argentina to reinforce supply.

Earlier this month, HydroWorld reported that the 14-GW Itaipu plant in Brazil was able to increase its power production as a result of heavy rains, helping offset some of the decreased hydro generation elsewhere in the country.

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