Agência Brasil explains: how the new light tariff flag works

Since the last day 1, Brazilians have been feeling the impacts of the lack of rain in hydroelectric plants in their pockets. With the creation of the water scarcity banner, consumers will pay an extra R$ 14.20 for every 100 kilowatt-hours (kWh) consumed.

The extra charge will be made until April 30, 2022 and will increase the energy bill, on average, by 6.78%, according to the National Electric Energy Agency (Aneel). The water scarcity flag replaces the red flag 2, in force since June and which was readjusted by 52% in July.

Initially, level 2 of the red flag was R$ 6.24 for every 100 kWh. With the readjustment, the value had risen to R$ 9.49 in July. In practice, the water scarcity banner creates another level, with a charge of R$ 14.20. The increase is not calculated on the total amount of the electricity bill, but on every 100 kWh consumed.

Variable costs

Created in 2015 by Aneel, the tariff flags reflect the variable costs of electricity generation and are divided into levels. They indicate how much it is costing the National Interconnected System (SIN) to generate the energy used in homes, commercial establishments and industries. When the electricity bill is calculated by the green flag, it means that the bill is not increased.

Understand more:

The yellow flag means that energy generation conditions are not favorable, and the bill is increased by R$ 1,874 per 100 kilowatt-hour (kWh) consumed. The red flag shows that it is more expensive to generate energy in that period. The red flag is split into two tiers. At the first level, the additional amount charged becomes proportional to consumption, at the rate of R$3,971 per 100 kWh; level 2 applies the ratio of R$ 9,492 per 100 kWh.

“With tariff flags, the consumer gains a more active role in defining their energy bill. When knowing, for example, that the flag is red, consumers can adapt their consumption and reduce the value of the bill (or, at least, prevent it from increasing)”, explains Aneel.

Why does the account increase?

The hydroelectric plant, which generates energy from the power of water in the reservoirs, is the cheapest and the first option for the SIN. Therefore, in times of heavy rain and full reservoirs, the tariff flag is usually green, because energy is being produced in large capacity and under favorable conditions

In periods of drought, when the level of reservoirs decreases, it is necessary to capture energy from other types of plants, such as thermoelectric plants. This type of plant generates energy from fossil fuels such as coal, diesel and gas. In addition to being more polluting, it is less effective and more expensive. Therefore, when the thermoelectric plants are activated, the cost of energy generation increases and the tariff flag changes, as production conditions become less favorable.

The assessment of energy generation conditions in the country is the National Electric System Operator (ONS). It is he who defines the best energy generation strategy to meet demand. It defines the forecast for hydraulic and thermal generation, as well as the energy settlement price in the short-term market.