With a water crisis, Aneel maintains red flag 2 in September, the most expensive

THE National Electric Energy Agency (Aneel) announced this Friday (27) the maintenance of red flag 2, in force since June, for the month of September. The decision takes place in the middle of a historic drought in the hydroelectric region.

Red flag 2 represents an additional charge of R$ 9,492 for every 100 kWh consumed, and is the most expensive extra charge. The agency did not update the value of the flag as expected by economists and even part of the government.

In recent days, there has been a strong debate between ministries on the subject. Authorities and technicians linked to the electricity sector defend an increase in red flag 2 to a figure above R$ 20 — with an increase of around 150% — but for a short period of around three months. The economic team prefers a smaller readjustment of the banner — close to 50%, to a value close to R$ 15 — for several months.

The announcement follows a time when the main water reservoirs in the country are at a critical level, due to lack of rain. The biggest drought faced by Brazil in the last 91 years.

This scenario causes the federal government resort to thermal plants, with a higher generation cost. The extra value is transferred to final consumers through the tariff flag.

The National Electric System Operator (ONS) predicts that the country will face an electricity deficit in October and November this year if it does not adopt “additional resources”, which would be new power generation units that prevent consumption from exceeding supply.

“Without that or strong energy savings, there is a great risk of blackout because of the degradation in the level of storage of the reservoirs, with the drought”, says the entity.

water crisis

The Minister of Economy, Paulo Guedes, stated that he spoke with the National Electric Energy Agency (Aneel) to insure the increase in the price of the tariff flag on the electricity bill, amidst the water crisis faced.

“The flag went up and it was going to go up more. I suggested moderation: go up a little more, but longer, because we need to replenish the reservoirs. It’s better to go up a little longer than go up more for just three months”, he said in his participation in the XP Investimentos event, this Thursday (26).

Even so, he acknowledged the risks of the water crisis, but stressed that it was just another challenge to be faced by the Bolsonaro government.

According to the latest bulletin released by the ONS, the Southeast and Midwest Hydroelectric Power Plants’ reservoirs operate with only 22.7% of their storage capacity. Responsible for around 70% of the country’s hydroelectric generation, the reservoirs have the lowest levels in the last 91 years. The useful volume at Furnas is at 18.3% and at the Nova Ponte plant at 12.2%.

In comparison with the previous bulletin, the level of storage of reservoirs in the Southeast/Midwest decreased by 0.2 percentage point (pp). The biggest drop in the level of storage was registered by the South Region, of 1 pp The subsystem is operating with 30.7% of its capacity.

The reservoirs in the Northeast operate with 50.4% of the storage capacity. The useful volume of the Sobradinho hydroelectric reservoir is at 49.14%. The plants in the North region, on the other hand, operate at 72.8% of their capacity. And the Tucuruí Dam follows with 89.84%.

According to the ONS report, the North reservoirs should end the month of August with 72.4% of the storage capacity, followed by the Northeast with 49%, in the South with 26.8% and the Southeast/Midwest subsystem with 21.7%. According to the operator, inflows remain below the historical average.


Even in the crisis scenario, the federal government rules out the possibility of energy rationing. The Minister of Mines and Energy, Bento Albuquerque, reiterated that, despite measures to encourage the reduction of electricity consumption, the government does not work with the hypothesis of rationing.

“I don’t work with a hypothesis of rationing and that has to be made clear. […] I understand this (reduction of consumption) as economic measures that should always be applied, regardless of the moment we are living in now”, he argued at a press conference last Wednesday (25).

The MME’s Electric Energy Secretary, Christiano Vieira da Silva, clarified that to characterize rationing, the program must provide for a cut in the supply of energy for those who do not meet the established goal.

“It’s not about that (rationing), at all. […] It’s showing what the federal government is doing to contribute. […] Some (public buildings) may reduce 10%, others 15%, others will achieve below 5% and will explain why they were unable to join, but there will be no cuts”, he commented.

*With information from Fernando Nakagawa and Isabelle Resende