Eith Brazil facing its worst drought in almost a century and hydro output plummeting, gas-fired power generation reached a record high by providing essential back-up to the power system.
The drought in Brazil is testing the country’s power system: whilst power generation needs climbed by 10% yoy so far in 2021, hydro output is plummeting (-10% in June) on low rainfall and reservoir levels.
This recalls the 2001 crisis, when the country faced several blackouts. with one notable difference: Brazil’s thermal generation stack rose by more than threefold since the beginning of the century, with the addition of new gas and oil-fired power plants.
At the moment, this is exactly this thermal generation which is providing essential back-up to the Brazilian power system: thermal output rose by over 60% yoy, with over half of the swing provided by gas-fired power plants.
Together with lower pipeline deliveries from Bolivia, Brazil’s thirst for gas translated into a record LNG inflow in June and set to be beaten in July.
Meanwhile, reservoir levels continue to drawdown, standing at just 28% in the Southeast/Midwest (vs 50% last year).
What is your view? What will be the impact of the drought on Brazil’s energy system? How can the resilience of the system further enhanced? Could gas storage play a role?
Source: Greg MOLNAR
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