After months of droughts, government seeks energy savings

After months of droughts, government seeks energy savings
President Jair Bolsonaro during a visite to a power plant in Amapá. Photo: Isac Nóbrega/PR

It has been months since Brazil began feeling the effects of its driest summer in nearly a century. Crops were disrupted, hydroelectric reservoirs were left half-empty, and electricity tariffs shot up as the government was forced to turn to more expensive thermal plants. Only now, however, has the administration sought to create savings mechanisms to avoid the need for rationing policies and lower the risk of power outages.

The Mines and Energy Ministry will allow consumers in the unregulated market — generally big industries — to sell the energy they would usually use during peak times, moving their operations to other parts of the day. It opened public consultations today to gather suggestions from the private sector until August 9.

Free-market consumers will be able to make offers for specific periods and, depending on the price per MWh, they will receive money from the short-term market or from resources generated from System Service Charges, which are passed on to the consumer when thermoelectric plants are switched on. Industries that have cheap energy contacts and can shift production will certainly have a financial incentive to sell energy.

Experts say the government should have carried out the measure months ago. On Sunday, reservoirs in the Southeast/Center-West sub-system — the most important in the country — were below 26 percent capacity.