ON FEBRUARY 4th your correspondent experienced a power outage which left himstranded in a metro tunnel beneath São Paulo. It appears he was not the only one: 6m people in 11 of Brazil’s 27 states suffered blackouts late in the day after a transmission line between the states of Tocantins and Goiás failed. Operation was restored 38 minutes later but some areas were left without electricity for two hours.
The cause of the outage is unclear. The head of the national-grid operator, Hermes Chipp, ruled out the spike in electricity use in the past weeks as Brazilians fired up air-conditioners to help them cope with the hottest summer since records began in 1946. Inconveniently for President Dilma Rousseff the power cut came on the same day as a government publicity campaign to reassure citizens that Brazil is not facing an electricity crunch.
Specialists have long warned that supply of energy has not kept pace with surging demand. They predict that the risk of electricity shortages this year now tops 20%, well about the 5% the government deems acceptable.
Brazil generates roughly 80% of its electricity from hydropower plants. Lack of rain in recent months coupled with the sweltering heat weeks has meant that reservoirs in the south-east and centre-west, home to 70% of the country’s total storage capacity, are only 40% full. The grid operator’s models suggest they ought to be 53% full.
At the same time Brazilians are consuming ever more electricity. Peak demand reached an all-time high of 84,000MW on January 30th, according to figures from the national grid. Part of this is down to the sweltering summer and part to increased incomes, which translate into higher power consumption. But part is the result of the government’s policy of subsidising electricity—to keep inflation in check and voters sweet ahead of elections in October. Last year the state-owned electricity generator slashed bills by 16%, the biggest cut in 20 years.
This, many analysts reckon, is unsustainable. The government will have to let bills rise or risk driving distributors out of business. As demand spiked last week they had to tap spot markets, where the price nearly doubled in a day to the regulatory ceiling of 822.83 reais ($342.25) per megawatt hour. If rains do not come demand could remain at that level throughout February. Dilma Rousseff, the president, can ill-afford to prop distributors up for ever: last year the overall budget deficit reached 3.3 % in 2013, the highest since 2009. Nor should she, especially in light of the strain that the overuse of underpriced energy puts on the grid.
The recent meteorological vagaries also call into question the country’s reliance on hydropower. This is set to grow as Belo Monte, the world’s third-biggest hydro plant on the Xingu river in the northern state of Pará, becomes fully operational by 2015. It will produce a maximum output of 11,233MW. In the dry season, however, it will generate only a third of that figure.