Electricity consumption breaks record in July, driven by industry

Electricity consumption in Brazil was a record in July, reaching 39,950 gigawatts/hour (GWh), an increase of 5.7% against the same month last year, according to the Monthly Review of the Energy Research Company (EPE).

The performance was mainly driven by the industry, which registered the highest energy consumption for the month of July since 2014, an increase of 9.8% year-on-year.

The heating of economic activity is due to the advance of vaccination in the country, but it coincides with the worst drought in the last 91 years, which has reduced the energy generation of hydroelectric plants to the worst levels in history and forced the government to carry out campaigns to reduce the consumption.

Electricity consumption accumulated in the last 12 months totaled 495,829 GWh, an increase of 5.2% compared to the previous period. All regions of the country showed expansion in electricity consumption in July: South (7.7%), Northeast (6.9%), North (5.4%), Southeast (5.1%) and Midwest (2.5%).

The South Region had the highest industrial energy consumption in the month, with an increase of 11.1%, followed by the North (10.6%) and Southeast (10.5%), and then by the Northeast (8.4%) and Midwest (2.6%).

Among the states, the highlight was Alagoas, with a high of 51.8%, driven by the low base effect of comparison of the chemical sector in relation to the same month in 2020. But São Paulo, which has the largest productive park in the country, added a consumption of 509 GWh in July, an increase of 13.7% against July last year.

Segments

According to EPE, all the ten most electro-intensive segments of the industry increased consumption in July. Metallurgy led, with an increase of 11.7%, driven by steel and primary aluminum, mainly in the Southeast and North – the segment demanded over 388 GWh of cargo last month.

Chemical products followed, with over 168 GWh, or an increase of 11.8% in one year, with emphasis on thermoplastic resins in the Southeast and chlor-alkali and fertilizers in the Northeast.

Non-metallic mineral products increased energy consumption by 14.8%, or another 167 GWh in the Southeast and South, driven by renovations, self-construction and real estate works.

The textile (22.5%) and automotive (21.5%) segments continue to show the highest growth rates, with the good performance still leveraged by the low base effect, although this effect was mitigated by the beginning of the recovery of these sectors in July 2020, informed the EPE.

The commercial class showed an increase of 9.8% in electricity consumption in July, but the growth rate was lower than that recorded in the second quarter of this year, as July 2020 marked the beginning of the sector’s recovery from intensifying the flexibility of social distancing measures.

“The advance of the service sector was what most contributed to the expansion of commercial consumption in the month,” stated EPE.

Residential

The residential class had a 0.5% drop in consumption, driven by the Southeast region and justified by milder temperatures than in July 2020.

Electricity consumption in the Southeast dropped 2.3%, with highlights for Rio de Janeiro (-3.7%) and São Paulo (-3.5%). The North had a drop of 0.9% and the Midwest, 0.4%.

The South Region (1.8%) registered an increase in electricity consumption in July, with states affected by very low temperatures, demanding an increase in the use of electrical equipment for heating homes. In the Northeast, the rise in residential consumption was 2.2%.

“Although attenuated, the low base effect still leverages the rate of expansion of the free market, which increased by 14.8% in consumption in the month, while captive consumption by electricity distributors grew by 0.4%. The contribution of the low base effect was canceled out in the captive market rate, as it covers the entirety of residential consumption, the class with the best performance in July last year”, explained EPE.

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