Above-average rains in most Brazilian regions are helping water reservoirs at hydropower plants replenish their levels, widening the gap from last year's historic lows.
Water levels in the southeastern/mid-center regions — home to nearly 70pc of the hydro power generation in the country — were at 54.4pc of capacity on 18 February, a 5 percentage point increase in one week. Water levels rose in all but one region, the south, which is typical during a year when the La Niña climate pattern is in effect.
Counting all of the interconnected power system across all regions, reservoir levels were at 58pc by the end of last week, far above the 37pc level seen in historically dry 2017 and closer to 63pc level expected by Brazil's grid operator by the end of February.
As March approaches, though, water flows in rivers fell to 99pc of the long-term average from 112pc in the previous week for the southeastern/mid-center regions.
The dip in river flows contributed to a slight increase of the marginal generation cost, which rose to R11.59/MWh from R10.19/MWh the week prior, for the southeastern/mid-center and southern regions. It remains at R0/MWh for other regions.
The power calculated price for clearing, the PLD, is still at its regulatory bottom of R55.70/MWh on average, for all regions. Still, last week the gas-fired Araucária power plant ran with a R2,082/MWh cost, along with the LNG-fired GNA power plant, at a R831.99/MWh cost. Costs above the clearing price are paid as surcharges by all consumers.
Power clearing chamber CCEE forsees a R56/MWh PLD for March.
The duration and characteristics of the La Ninã for this year will be reassessed by the grid operator in its monthly meeting on 28 February, which may change reservoir level forecasts and price estimates.
While the grid operator does not yet need to dispatch most thermal power generation capacity, the new 141MW LNG-fired Jaguatirica II power plant — which does not participate in the interconnected system — started operation last week in the northern state of Roraima. The other two plants at the same complex should beginning running by May, running on LNG processed by Eneva from the Azulão field in Amazonas state.
