Skip Navigation LinksMy Argus / News / News Story

Printer friendly

Brazil electricity demand recovering from recession

09 Mar 2018 16:52 GMT
Brazil electricity demand recovering from recession

Sao Paulo, 9 March (Argus) — After two years of decline followed by modest expansion in 2017, Brazil's electricity demand is forecast to grow at an average annual clip of 3.9pc between 2018 and 2022, according to government-controlled energy research agency Epe.

After suffering its worst economic downturn in recent history in 2015-16, Brazil will have an excess of power generation capacity over the next four years, Epe projected.

According to Epe estimates, Brazil needs to add an average of 4GW of new capacity per year to keep up with long-term demand.

Brazil's electricity sector monitoring committee (CMSE) said 745.2MW of new commercial generation capacity was commissioned in February, the bulk of which came from a 611.1MW turbine at the 11.23GW Belo Monte hydroelectric plant. In the first two months of 2018, a total of 996.8MW new generation capacity and 830km of new transmission lines began operating.

Hydroelectric reservoir levels at the end of February reached 37pc in the main southeast/center-west grid, up 5.51 percentage points over the month. Northeastern reservoir levels also recovered 8.33 percentage points, reaching 26.3pc. The region has suffered from a prolonged drought.

In the northern grid, which is at the peak of its rainy season, reservoir levels increased 29.2 percentage points to 62.1pc in February. In contrast, reservoir levels in the southern grid fell 8.7 percentage points to 73.5pc.

Hydroelectric reservoirs are expected to continue to recover this month in the southeastern, northeastern and northern grids, according to the national systems operator (ONS).

As a result, thermoelectric output will be limited to lower-cost plants, which will reduce demand for imported LNG as well as fuel oil in the coming months. Thermoelectric generation peaked in October at an average of 17,694MW, but has since declined steadily, reaching an average of 8,884MW in January, according to the ONS.

But LNG imports will likely rebound in the second half of the year as hydroelectric reservoirs decline in response to drier weather. Epe estimates that hydroelectric reservoir levels will end the dry season in November with 30pc of capacity this year, compared to 18pc in 2017.