The La Niña phenomenon, which consists of a decrease in the surface temperature of the waters of the Pacific, has surpassed its peak and continues to weaken. The official outlook issued by the Climate Prediction Center indicates a 62% chance of transitioning from La Niña to ENSO-Neutral (neither La Niña nor El Niño), remaining so during fall and winter 2021.
What does this mean for the electricity sector?
Although the biggest highlight of the influence of La Niña in Brazil is the reduction of rainfall, historically (1951 to 2020) this weakened phenomenon made the energy generated from the natural flow in hydroelectric plants (ENA) in the Southeast to be 95% of the average (MLT ) in the months of March, April and May. That is, without major impacts on hydropower generation.
For comparative purposes, in 2020, when the Pacific was also neutral, the average ENA of the MLT was 90%.
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Another important projection that can be used for comparison is the most recent maps from the NMME, where we found that rainfall for the quarter is between average and below average, especially in the months of March and April.
Thus, the indicated tendency of the Pacific to enter into neutrality combined with the projections of rainfall within and below the average, creates the expectation that the Southeastern ENA will be greater than 80% of the MLT in the quarter. This value does not favor the increase in the level of the reservoirs before the beginning of the dry period.
This content was prepared by Mercurio’s Commercial team of specialists. Follow our LinkedIn page for more industry updates.