Brazil has been using less and less water from hydroelectric plants for power generation and a significant part of this potential is being thrown away. The slow growth of demand associated with a favorable hydrological scenario, with abundant rainfalls; the oversupply of electricity driven by the massive entry of new wind and solar plants; the lack of reservoirs for water storage; and the poor integration with neighboring countries to export surplus power are among the reasons for the waste.
January 2023 was the worst month ever in terms of non-utilization of water for power generation, according to data from Brazil's national grid operator ONS. In total, 9,404 average megawatts were wasted, an amount higher than the entire production of Itaipu Binacional in the period.
In this context, it has become increasingly challenging for ONS to take advantage of this power. The solution has often been to release water downstream without generating electricity.
The release of surplus water has increased over the years, including in dry periods like in 2021, when Brazil went through the worst water crisis in 91 years.
Forecasting wind and solar generation is difficult. When there is wind or sunshine, these plants are prioritized in the system's operation, which makes hydro less necessary. According to Edvaldo Santana, a former director of the Brazilian Electricity Regulatory Agency (Aneel), the volume of unused electricity is not reasonable.
"The data for January 2023 are frightening. The hydroelectric plants had a total availability of 96 average gigawatt and generated 53 aGW. However, 17 aGW were released and, of these, 8 aGW should have passed through the turbines. This corresponds to the consumption of the entire southern region of Brazil," he said. "Today's offer is for generation as late as the year 2031."
He stressed that the power supply has expanded towards non-hydro renewable sources, which means a lot of inflexible power, and will increase further with the obligation to contract thermal plants under the Eletrobras law. "The expansion has been determined by unnecessary subsidies, which makes the bill increase despite the brutal surplus of power. The consumer will pay dearly for the surplus," he said.
Data from ANEEL show that 9.45 GW are expected to come into operation by 2023. Of this total, 8.7 GW are wind and solar. Specialists point out that these sources have displaced hydroelectric generation, since they are very competitive because they receive subsidies.
Luiz Carlos Ciocchi, the director-general of ONS, told Valor that this oversupply driven by wind and solar could in the future generate a surplus power that the country will not be able to use. "The subsidies for already very competitive sources cause distortions and creates a disproportionate increase in supply compared to consumption," he said. "The growth in supply not backed up by the growth in demand can lead to a situation where there is too much generation for too little power."
Mr. Ciocchi reinforces that today there is no waste, as this water surplus cannot be used because the hydroelectric plants generate power according to the demand and stored water. However, Brazil has imposed restrictions on the construction of new reservoirs, and the largest plants in the system are run-of-the-river projects - which lack large reservoirs.
"The ONS operates the system that is already in place. We are not responsible for the plan, execution, and strategic and political guidelines of the construction of these plants," he said. "So when the water arrives in Belo Monte, Santo Antônio, and Jirau, we have to generate power. If there is no demand for this power, we have to release water without generating power."
Mr. Ciocchi believes that Brazil should rediscuss the strategy of building hydroelectric dams with reservoirs. Roberto Brandão, a senior researcher at the Federal University of Rio de Janeiro (UFRJ), goes in the same vein. In his view, it was a mistake to prevent the construction of new reservoirs, although he finds the environmental arguments against it reasonable.
Mr. Brandão explains that, in January, the opening of the floodgates of the hydropower mills occurred before the reservoirs were completely filled. This is a planned action by the ONS to control floods, which consists of maintaining a waiting volume in the reservoirs to avoid or minimize flooding.
One alternative is to sell the surplus to neighboring countries. In the last few days, Brazil has increased the export of energy to Uruguay and Argentina to values above 1,100 aMW, a more rational way to use this power, but there are connection limitations. According to Celso Torino, vice president of the Regional Energy Integration Commission (CIER), the amounts of wasted power are expressive and should be the focus of a study of opportunities.
"Whether from the perspective of integration in Latin America or of the world in light of the issue of combating global warming, I see an opportunity in transforming this unused power into effective integration of Brazil with other countries."
Mr. Ciocchi said it is a vision of the future that hydroelectric plants play the role of batteries in the system. However, they were designed to generate power and there is no solution today on how to remunerate these projects that would work this way. During a webinar of the Brazilian Forum of Leaders in Energy, Eletrobras CEO Wilson Ferreira showed a different view.
"The intermittent sources [wind and solar] exist thanks to the hydroelectric plants and the transmission system, but it is inadequate the way it is happening today. The hydroelectric plants, which were made to be the basis of the system, because they have the lowest cost, are being burdened by the hydrological risk, because they are not dispatched in their totality. They are playing the role of battery of the sector with absurd costs and wear on the machines."