Aneel predicts a drop in energy demand, which will make it cheaper.

By Leonardo Goy

BRASILIA (Reuters) - The Brazilian National Electric Energy Agency (Aneel) authorized on Friday a downward revision of the load on the Brazilian electrical system for the period from 2014 to 2018 by the National System Operator (ONS), which will reduce the price of short-term energy.

According to Aneel, the projected lower energy demand will have a reduction effect of 160 reais per megawatt-hour (MWh) in the Settlement Price of Differences (PLD) as early as next week.

The PLD is the price that guides operations in the short-term market. The reduction occurs at a time when the federal government is securing another loan, this time of 6,6 billion reais, to help distributors pay for the purchase of energy in the short-term market.

According to Aneel director Reive Barros, who is the rapporteur for the case, the ONS's request to make new load projections stems from the Central Bank's downward revision of the average annual GDP growth from 4,4 to 3,5 percent for the next four years. In total, the revision indicates a drop of 7.551 average megawatts in the country's load projection.

The load forecast for 2014, for example, fell 1,8 percent, from the 65.917 MWmed estimated in May to 64.710.

For 2015, the expected demand was reduced by 2,4 percent, to 66.773 MWmed, compared to the previously expected 68.420. In 2016, the revision was 2,3 percent, to 69.545 MWmed.

For 2017, Aneel authorized a 2 percent reduction in the estimate, to 72.574 MWmed. In 2018, the load is expected to be 75.711 MWmed, a forecast 1,9 percent lower than the previous one.

"That's equivalent to almost one Santo Antônio hydroelectric plant per year," said Reive, referring to the estimated average annual generation for the Madeira River hydroelectric plant.

According to him, the schedule stipulated that the revision of load expectations would take place in September, but it was brought forward to incorporate the GDP revision.

"If we had a growth outlook above 4,4 percent, that would have been done as well," said Reive, explaining that the regulation allows for extraordinary revisions to the calculation basis when a relevant fact arises, such as a change in GDP growth prospects.

However, Aneel denied ONS's request for the load revision to be applied retroactively to the bills, which could lead to corrections in past PLD values.

"We rule out going back, the rule does not allow for going back," he said.

According to the director, the effect of the PLD reduction in the future will still be subject to other factors, such as the level of hydroelectric dams and rainfall, for example.