Brazil revises down 2020 power consumption forecast

Brazil's energy planning firm EPE forecasts that power consumption will fall 0.9% this year to an average load of 67,249MW due to the coronavirus pandemic.  

In its previous projection, EPE said demand was expected to grow 4.2% compared with 2019, when it averaged 67,835MW. The region most affected by the coronavirus is expected to be the southeast.   

“Due to quarantine measures adopted in several regions, economic activity faces a significant reduction. Projections for growth of gross domestic product were revised to zero, which directly impacts energy consumption,” EPE said in a statement.   

Previously, EPE believed Brazil would reach an average energy load of over 70,000MW in 2020, a volume that is now only expected to materialize in 2021. As a consequence, in 2019-24 the country should see annual growth of 2.9% in electricity consumption, down from 3.8% expected before the pandemic.   

The lower figures are set to have a direct impact on the country’s upcoming power tenders, as distributors use the projections to calculate the volumes they will contract. There is talk among market players of the need to reschedule some of the auctions.  

“I believe they could be postponed, even if it's for a short time, in order for the market to have a clearer view of what's going to happen,” Alexandre Viana, director of consultancy firm Thymos, told BNamericas.     

Brazil plans to hold six tenders to contract power generation projects this year. Two will buy electricity from existing plants (the A-1 and A-2 auctions in December) and another two are for new projects (the A-4 and A-6 auctions scheduled for April and September, respectively). The A-4 and A-5 tenders, also initially scheduled for April, will contract power supply from new plants and existing units simultaneously for the first time, replacing diesel-fired plants with less expensive and less polluting gas-fired units.