Firjan warns of possible return to yellow tariff flag.
The forecast of below-average rainfall, the drop in reservoir levels, and the likely increase in thermal power generation, coupled with the growth in total consumption until the end of the year, lead to the possibility of resuming the activation of the yellow tariff flag, which would impact the cost by R$ 15/MWh; this information is contained in the unprecedented study – the Brazilian electricity sector conjuncture bulletin – which will be published quarterly by the Firjan System.
Newspapers in Brazil - The forecast of below-average rainfall, the drop in reservoir levels, and the likely increase in thermal power generation, coupled with the growth in total consumption until the end of the year, lead to the possibility of resuming the activation of the yellow tariff flag, which would impact the cost by R$ 15/MWh.
The information is contained in the unprecedented study – the Brazilian electricity sector's economic outlook bulletin – which will be released quarterly by the Firjan System.
The study, which evaluates three essential indicators for industry – consumption, generation, and cost – shows that the industrial sector suffered the most significant impact on consumption, with a 5,7% drop when comparing the first half of 2016 to the same period last year. The Northeast region was the most affected in the first half of the year, with a 10,7% decrease in energy consumption by the productive sector, followed by the Southeast (-6,6%) and South (-4,1%) regions. The North (+1%) and Central-West (+0,6%) regions showed slight growth in 2016. Even so, despite the drop recorded in the first half of the year, the trend is for a 0,5% increase in total consumption across the country this year compared to 2015.
Regarding generation, it was found that the average level of reservoirs in the National Interconnected System (SIN) was 49,1% at the end of July, an increase of 6,9 percentage points since the beginning of the year. According to the analysis by subsystem, a decrease is expected in all regions compared to the end of July due to the country going through the dry season. In the first half of the year, hydroelectric generation represented 77% of the total produced in the country, while wind power accounted for 4,4% and thermal power for 18%.
The reduction in thermoelectric generation levels this year resulted in smaller tariff adjustments for distributors in the regulated market compared to the previous year. Furthermore, it allowed for the deactivation of the red tariff flag, which impacted costs by up to R$45/MWh. Between December 2015 and July 2016, there was a 5% decrease in real terms in the average cost of energy for the productive sector. However, the impact was not very significant since, in the accumulated total of the last three years, the increase was 57,7%, reinforcing the loss of competitiveness faced by national industry.
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