Jan 27, 2015

Brazil's Hydroelectric Reservoirs Not Refilling Fast Enough

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The Brazilian National Electrical System Operator (ONS) makes weekly estimates as to what they feel will be the monthly rainfall in various regions of Brazil so that electrical companies can better predict the water levels in the hydroelectric reservoirs.

ONS is now estimating the rainfall in southeastern Brazil (including the states of Sao Paulo, Minas Gerais, and Espirito Santo) during the month of January will be 43% of the long term average. This is far short of what they had expected a month ago when they predicted that the rainfall in southeastern Brazil during January would be 90% of the long term average.

For the northeastern region of Brazil, they are now expecting the January rainfall will be 26% of normal and in northern Brazil, they are expecting 62% of normal. Only in southern Brazil has the January rainfall been abundant and ONS is now expecting that southern Brazil (including the states of Parana, Santa Catarina, and Rio Grande do Sul) will receive 213% of the normal January rainfall.

Southeastern Brazil came into this summer's rainy season with critical low water levels in its hydroelectric reservoirs, but government officials insisted that the expected summer rains would recharge the reservoirs enough to avoid the potential of electrical rationing later this year. Their confidence may have been misplaced.

There are only about two more months left in the summer rainy season. By the time the calendar turns to April the rains are diminishing and the dry season starts to take hold. The next rainy season won't start again until next October. Therefore, unless the rains during February and March are much heavier than normal, there is a strong possibility that the big cities in southeastern Brazil including Sao Paulo, Rio de Janeiro, and Belo Horizonte will be forced to curtail their electrical usage due to low water levels in the hydroelectric reservoirs.

The reservoirs supplying water to the city of Sao Paulo are also at critical low levels and if heavy rains don't materialize over the next few months, there could be water rationing in Brazil's largest city. Prior to today (Monday, January 26), the water levels in the six reservoirs that supply the majority of the drinking water for the city of Sao Paulo have declined for 19 straight days. The level stabilized Monday after weekend rains in the region.

Thus far in January, the rainfall in the region has totaled 113 mm or 4.5 inches. They would need to receive another 158 mm or 6.3 inches over the next five days in order to reach the average rainfall for the month of January. The water levels in the various reservoirs that supply Sao Paulo are in the range of 5-10% of capacity.