Brazil needs to update the way the electricity sector is planned and operated to deal with the new risks that arise in the market with climate change and the energy transition, according to a study by Instituto Acende Brasil, a think tank focused on the sector. The report indicates that the industry will need to rely on more sophisticated scenario analysis that takes into account new threats to ensure security of supply.Severe or extreme weather effects, such as droughts, floods and heat waves, and the consequent incentive to adopt renewable sources to help combat change are making the management of the sector more complex."It is more difficult to plan than in the past, when there was a very consistent relationship between economic growth and energy consumption. There is no such conviction anymore, especially because of distributed generation, which has been growing a lot," said Richard Lee Hochstetler, head of economic and regulatory affairs at Acende Brasil.Weather events are already affecting the sector's operation. In 2021, Brazil experienced a drought that reduced the volume of water in hydroelectric reservoirs and generated uncertainties about the ability to supply energy at peak consumption times. Similar challenges are experienced in other parts of the world. This week, for example, a heat wave in Argentina caused power outages in Buenos Aires.At the same time, the growth of renewable sources in the power generation mix helps to diversify the electrical system, but also brings new uncertainties to the sector, since the generation by these plants varies throughout the day and according to the climate conditions."Transformations such as the growth of uncontrollable sources and changes in load behavior are happening at a faster pace than the practical ability to adapt planning," Acende Brasil's head Cláudio Sales said.The Energy Research Company (EPE) and national grid operator ONS have sought to adjust to the new moment. Analysts note, however, that the changes need to be faster, especially to avoid further pressure on energy prices.One example is the ongoing update of the computer system that calculates the plants to be dispatched by the ONS. Specialists point out that changes in the computational model must be faster, as this model is very optimistic in the estimates of the generation capacity of hydroelectric plants by not considering that productivity decreases as the reservoirs are emptied.EPE's head Thiago Barral agrees that the increase in uncertainties has brought greater complexity to the elaboration of scenarios. For him, the role of planning becomes even more important in this context. "Scenarios are not projections or predictions, but ways of exploring plausible futures, in order to better prepare to face these uncertainties and reduce regrets arising from today's decisions that impact our future alternatives," he said.Mr. Barral pointed out that EPE started to use scenarios that test changes in assumptions or variables in the sector, in addition to the traditional reference economic projections in the Ten Year Energy Expansion Plan, an annual publication that indicates the perspectives of expansion of the energy sector over a decade. So questions like "What if the cost of a particular source drops faster than estimated?" and "What happens if water availability is structurally reduced in a given region?" have been incorporated into long-term planning."We must also not forget that we are all subject to the occurrence of the so-called black swans, high-impact events or apparently unlikely rare events, which defy normal historical, scientific, financial or technological expectations," Mr. Barral said.For the ONS, in this new context, it will also be necessary to anticipate some regulatory discussions for the modernization of the sector, such as the use of hybrid plants, which combine more than one source, and storage resources. Projects of this type, according to the operator, can help to streamline the electrical transmission system, which is also undergoing changes with the growth of renewable generation in new regions.Another topic worth mentioning, according to the ONS, is distributed generation, in which consumers themselves generate energy, mainly through photovoltaic panels in homes, buildings and businesses. Mr. Hochstetler agrees that the growth of this field will be a challenge for operation and planning, as it could lead to a drop in consumption in the National Interconnected System (SIN) at the same time the total demand for energy continues to grow in the country.