Jun 18, 2021
Brazil's Minister Askes Brazilians to Conserve Electricity
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
South-central Brazil is suffering from one of the driest periods in over 90 years. Not only has the dry weather impacted the production of soybeans, corn, sugarcane, coffee, and citrus, it is also threatening the country's electrical supply. The majority of Brazil's electricity is generated by hydroelectric dams and the water levels in the reservoirs are reaching historical low levels.
The Brazilian Minister of Mines and Energy is asking for everyone in Brazil to help conserve electricity due to the ongoing drought and low water levels at Brazil hydroelectric dams.
He indicated that the government is not planning on rationing electricity because they can activate other electrical generators, but he is asking for everyone to conserve energy and warning that their electricity bills will be increasing.
Starting in June, Brazil's reservoirs entered a "Red Alert 2" level, which automatically triggered higher rates for electricity during peak periods.
The Brazilian Association of Basic Industries and Infrastructure (Abdib), which represents large industrial users of electricity, is asking its members to voluntarily increase their efforts to improve electrical efficiency to reduce demand.
The consulting firm PSR, which specializes in energy, issued a report last week that the energy situation in Brazil is worrisome, but not yet alarming. In a best-case scenario, they estimate that the reservoirs in the center-west and southeast regions of Brazil will be down to 21% of capacity by the end of November. In a worst-case scenario, they estimate the reservoirs will be down to 10% of capacity by the end of November.
Brazil is currently in the midst of its annual dry season and little additional rainfall is expected until the summer rains return sometime in September or October. Meteorologists in Brazil are already warning that the return of the rains may be delayed due to the ongoing drought.
A delayed start to the 2021/22 planting season may not significantly impact soybean production, but it could impact the safrinha corn which is planted after the soybeans are harvested.