Energy: Brazil must have a green flag in 2024, says Aneel – 03/30/2023 – Market

The green flag on the energy bill, which exempts consumers from paying extra fees, may extend throughout 2024 given the comfortable hydrological scenario, which substantially raised the level of hydroelectric reservoirs, the main source of electricity generation in the country, said the director by the regulatory agency Aneel Hélvio Guerra.

He also pointed to the expansion of energy supply this year, especially renewable energy, as a factor for maintaining the green flag, which should continue throughout 2023.

In an interview with Reuters this week, the general director of the National Electrical System Operator (ONS), Luiz Carlos Ciocchi, said that all current conditions point to no additional charges on Brazilians’ energy bills this year.

“The ONS knows this environment well, and the environment is comfortable for 2023 and 2024. We have all the reservoirs full and it continues to rain, which gives us this comfort,” Guerra told Reuters.

More than 60% of the electricity generated in Brazil comes from hydroelectric plants.

“If everything works properly, we will have a green flag by the end of the year and, possibly, in 2024”, added the director of the municipality.

The forecast is that the hydroelectric reservoirs will reach the end of the wet period, in April, at the best storage levels since 2007.

In the Southeast and Midwest, where the hydroelectric plants with the largest lakes are located, the capacity of the reservoirs should reach 85% at the end of March, according to the ONS.

Estimates for the dry period, starting in April, are also positive, with the possibility that the water stock in the dams will reach the best level in 16 years in August, according to the ONS.

The arrival of a new rainy period, in November this year, would contribute to a smooth crossing from 2023 to 2024.

During the 2021 water crisis, the red flag was triggered several times, and the additional charge amounts on the light bill were also adjusted.

The government also created a special flag, called the water scarcity flag at the time, to cover additional costs with activating more expensive thermal plants to guarantee energy supply.

When the red or yellow flags are applied, the account suffers increases ranging from R$ 2,989 to R$ 9,795 for every 100 kilowatt-hours (kWh) consumed. When the water scarcity flag was in effect, from September 2021 to April 15, 2022, the consumer paid an extra R$ 14.20 for every 100 kWh.

The perspective now is that there will be no dispatch of these more expensive thermal plants, only those considered inflexible will be activated, said the director of Aneel

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In addition to favorable hydrological conditions, the director of Aneel highlighted that this year there will be an increase in the supply of renewable generation.

“We have more than 20 gigawatts of wind power in the country, we have more coming in and a high amount of photovoltaics and distributed generation, which already represents around 9% of our matrix”, declared Guerra.

Wind generation already has an installed capacity in the country of approximately 25.6 gigawatts, while solar source has a park of 27 gigawatts (adding own and distributed generation).

According to the Absolar association, in 2023 alone, 10.1 GW of solar generation should be added in the country, with 5.5 GW of distributed generation (on roofs and small plots).