By Alexandre Schinazi


Much is spoken about the serious water crisis that affects many regions of Brazil, particularly the country’s financial capital and largest city, São Paulo. But little has been announced to the general public about the significant impacts this will most likely have on the Energy sector – as early as this year.

It is well known that Brazil’s electrical energy is produced mainly by hydroelectric power. The long drought the country has seen in the past years, with well below average rainfall during the humid summer months, has all but dried up many of the dams that hydroelectric power plants use to generate energy.

The consequences have already begun to appear, as the nation is becoming increasingly dependent on its thermoelectric plants, fueled mainly by diesel and natural gas. According to the national operator of the electric grid (ONS), in 2009, 93% of Brazil’s electricity came from hydroelectric plants. By 2013, this number had decreased to 79%; and in December 2014, to a mere 69%. Although this percentage is still large when compared to most countries, Brazil’s power grid was not designed to operate on 30% thermoelectric sources. The fuel-based plants have been running fulltime lately, straining machinery and affecting maintenance routines. On November 21, 2014, a record 17.1 GW of thermoelectric power was being generated simultaneously. This represents an astounding 98.7% of the country’s thermal capacity available on that day, meaning that despite politicians’ rhetoric, Brazil is dangerously close to its electrical limit.

Geracao térmica

Brazil’s thermal energy production in 2009 and 2014


Of course, contrary to the government’s insistence, lack of rain is not the only reason the country now finds itself in this delicate position. Poor planning by political leaders, election-oriented policies, and utility companies’ eagerness to share previous years’ profits with shareholders rather than investing the necessary amounts in grid infrastructure have predictably paved the way to the looming energy crisis, much like what can be said about the water crisis.

Eduardo Braga, Brazil’s Energy Minister, summarized his view of the government’s responsibility in the crisis by stating last month that “the electric sector is being victim of the hydrological rhythm” and that the “reality” is that “the consumer has to reduce” energy usage in order to avert major problems. This came after a meeting with none other than the Planning Minister. At least he is right about one thing: regardless of what actions will or will not come from Brasília, consumers must take their fate into their own hands and do their part by reducing energy consumption as soon as possible.

At Mitsidi, we believe that there is a huge untapped potential for energy efficiency. More on this on our next blog posts!