Business

Brazil closes year with hydroelectric reservoirs half full

The level of water in the reservoirs of Brazil’s southeast/center-west hydroelectric system is ending 2022 at about 50% of capacity, double what they were a year ago, according to national grid operator ONS.

The southeast/center-west system is the country’s main hydroelectric generating region, accounting for 70% of national reservoir water storage capacity, BNamericas reported.

The north, northeast and south subsystems’ storage levels are closing the year at 55%, 60% and 80%, respectively. This is up from 54%, 52% and 43% a year earlier.

The recovery of the hydro reservoirs is a result of higher rainfall this year compared with 2021, when Brazil faced its worst drought in 91 years.

Consequently, electric power prices in Brazil’s non-regulated market are expected to remain close to the floor – possibly around BRL60 (US$11.55) per MWh – in the coming months.

According to electric power trading chamber CCEE, on Dec. 21 spot prices were at BRL55.7/MWh.

Hydroelectricity accounts for around 60% of Brazil’s total installed power capacity of 191 GW.

The Ministry of Mines and Energy’s Monthly Energy Bulletin for August 2022, released in November, showing an increase of more than 13% in the supply of hydroelectric energy compared with 2021. The increase in hydroelectric generation is due to the improvement in rainfall this year, combined with strategies adopted in managing the 2021 water crisis. This resulted in higher levels of storage in the hydroelectric reservoirs.