Brazil mulling reintroduction of daylight saving time to cut energy consumption

Brazil is analyzing the reintroduction of daylight saving time to help reduce electric power consumption at peak times. 

According to experts, moving the clocks forward by one hour during the hottest period of the year could have positive impacts. 

Daylight saving time was abolished during the previous Jair Bolsonaro administration in 2019. The possible reintroduction comes against the backdrop of the worst drought the country has faced in 94 years, which has led watchdog Aneel to raise the price of the electricity rate.

As the growth in the country's installed generation capacity has been driven mainly by intermittent sources (wind and solar), hydroelectric plants remain the main backup, alongside thermal plants – which are more expensive and polluting. 

Last week, national grid operator ONS released a technical note saying that daylight saving time can contribute to greater efficiency in the power grid in meeting the peak load at night, especially between 6pm and 8pm. 

According to the ONS, it is during this period that the system needs to deal with the challenges of the exit of centralized and distributed solar generation and an increase in energy demand. 

From an economic point of view, the ONS claims that the application of daylight saving time could lead to a reduction of up to 2.9% in maximum demand and savings in operating costs of close to 400mn reais (US$73.6mn) between October and February. 

Fernando Borborema, energy studies manager at Delta Energia, believes the measure could result in a slight reduction in the price of energy at peak times.

The most worrying time is 7pm, when most of Brazil's public lighting is switched on, he said. 

“In addition, during this period families return to their homes after a day of external activities, such as work and school, and we notice a great deal of use of electrical equipment like showers and household appliances,” Borborema told BNamericas. 

João Sanches, CEO of Trinity Energias Renováveis, said in a press release that the adoption of daylight saving time could minimize the dispatch of thermal plants between 7pm and 9pm, containing prices for the end consumer, reducing polluting emissions and providing security for the system. 

Mayra Guimarães, director of regulation and market studies at Thymos Energia, explained in a press release how the implementation of daylight saving time could benefit the current configuration of the national matrix.

“As solar energy is generated during the day, this is a strategic source to meet the peak consumption that occurs between 1pm and 5pm. In addition, by continuing to generate energy for another hour, the measure would partly help to mitigate the onset of the second peak, between 7pm and 10pm, when people return home and switch on various devices.” 

She added that daylight saving time would also help to make better use of wind generation, which performs best in the early evening.

RED FLAG MAINTAINED

On Friday, Aneel announced that the power rate flag in October will be red level 2. The signal shows that there will be an additional charge on the electricity bill for consumers. 

The red flag level 2 means a charge of 7.88 reais for every 100kWh consumed. The factors that triggered the level were the GSF (hydrological risk) and the increase in the price of settlement of differences (PLD), which were influenced by the low inflow forecasts for the hydroelectric reservoirs and the rise in the price in the electricity market throughout October. 

A sequence of green flags in Brazil began in April 2022 and was interrupted in July 2024 with a yellow flag, followed by a green flag in August and a red flag level 1 in September. 

The flag system was created by Aneel in 2015 to show consumers the costs of generating energy. It reflects the variable cost of energy production, taking into account factors such as the availability of water resources and the advance of renewable sources, as well as the activation of more expensive generation sources such as thermoelectric plants.