This Wednesday (8), at a hearing in the Chamber of Deputies, the National Electric Energy Agency (Aneel) confirmed that the capacity of the reservoirs of Brazilian hydroelectric plants should be below 19%, a level registered in the 2014 water crisis.
The statements are another warning element for the near future of energy generation in Brazil. Although the government has been saying that the problem is a consequence of the drought, experts in the electricity sector point out that the equation is more complicated than that: it carries factors linked to inefficient management and questionable business practices.
Among these names is the former director-president of the National Water Agency (Ana), Vicente Andreu, who bluntly rejects the justification for the lack of rain as the cause of the energy crisis. none,” he said in an interview for the program well live, gives Radio Brazil in fact.
Know more: Electricity bills have an extra fee of R$ 14.20 and a tariff banner is 50% more expensive as of September
“This crisis is an energy crisis. They create this thing of calling it a water crisis to give the impression that it is a fortuitous thing, at the moment, that no one expected”, points out Andreu. During the conversation, he highlighted that the government and the generating companies are losing control of the situation and that the country may experience even more critical moments until the end of the year.
“More than putting the blame on São Pedro, they will have to pray a lot to São Pedro. For him to help bringing the rains in advance. If not, we will have problems at the end of the year, without a doubt,” he warned.
Read the conversation below or listen on the audio player below the title of this story.
Brasil de Fato: The government has stated that the energy crisis is the result of a water problem, the drought, which would be leaving the reservoirs at very low levels. Can you put this situation on St. Peter’s account?
Vincent Andreu: You can’t put it on St. Peter’s account at all. This crisis is the result of a recurring operation, which takes place every year, in the electricity sector and which was aggravated by the Bolsonaro government. Its purpose is to empty the reservoirs in the rainy season, so when the dry season arrives, with little water in the reservoirs, the price of the tariff will explode. This year they lost control over this operation, because the drought in the Paraná River basin, in the region of São Paulo, Minas Gerais, Mato Grosso do Sul and Paraná, is being very intense. With that they are losing control of this crisis.
Actually São Pedro is the only solution they have, that it rains again. Because all the measures that were taken are either a result of lack of planning or were taken too late. Even without mobilizing the population, trying to hide this crisis as much as they can. More than blaming Saint Peter, they will have to pray a lot to Saint Peter for him to help by bringing the rains in advance. If not, we’re going to have problems at the end of the year, no doubt about it.
Does this mean that what we are experiencing today is directly linked to the search for profit on the part of generating companies in Brazil?
No doubt. When we look at the charts, we reach this conclusion very easily. I would like to ask three questions here that are important for us to realize this. First, this situation that is the biggest water crisis in 91 years is a statistical falsehood. Is not true.
I am a statistician by training, if I say that in 2021 – due to the great flood that took place in Manaus and the Amazon Basin represents 70% of Brazilian water – that Brazil is in the biggest flood in its history in 101 years, it is statistically true , but it doesn’t mean anything at all. When they talk about 91 years, they try to confuse, they try to give the impression that it wasn’t predictable.
The second issue is that the large reservoirs in the Brazilian electricity sector are not annual reservoirs, that is, they do not empty and fill in a period of one year. They are multi-year reservoirs, supporting around two, three, four, five years of drought. So if we’re experiencing a drought now in 2021, we have to look back. We will clearly see that they have been carrying out this type of operation every year in the electricity sector, a very high risk operation.
When you place the tariff flags, this adds income transfers, withdraws from the population and goes to these companies.
Why does anyone do this? Here comes the third premise. The lack of water in the reservoirs causes the creation of tariff flags and now they have created another one. I estimate roughly R$33 billion that they will take from the Brazilian population, from the Brazilian society, from the economy to these agents operating in the electricity sector. If we were on the green flag, which means a reservoir with water, how much more would these companies be making? Nothing, they would be billing what is in the contract value. When you place the tariff flags, this adds income transfers, withdraws from the population and goes to these companies.
As these companies are all vertically integrated or are economic groups, they do not lose out at the end of the generation. On the contrary, the government issued a Provisional Measure that allows them to recover all the money they may be losing in 2021. At the other end, with these tariff flags, they collect this brutal resource, leaving the population, sacrificing mainly the poorest who don’t they have more to save and that they are paying absurd rates. In fact, it is an operation that aims to favor the operators of the electricity system, the agents in the sector.
Are there other technical elements involved that might explain the situation?
Some people, technically, say that this stems from the computational model of operation – called New Wave, Nova Onda – which has become obsolete because it doesn’t capture climate change, because it has no price for water. A series of technical criticisms that are true.
Now, the electricity sector is very competent to know about these criticisms. It’s not just one year, it’s been several years that this has been happening in our country. The conclusion reached is that the justification of computing or the climate issue is just a pretext. So much so that the only real measure that took place in Brazil as of May was the explosion in tariffs, raising money for the electricity sector.
The Bolsonaro government’s first scandal was in Itaipu, when it tried to carry out a maneuver that only failed because the president almost fell on the Paraguayan side. If we associate that it is not a problem of incompetence, that the problem is an extraordinary gain for these agents and many of these agents support pocketbookism, we cannot believe that all this is happening by chance.
Is it as if the population were then paying a fine due to the practice of companies?
It’s more than a fine, it’s extraordinary profits that these agents are having. If there is no crisis, they don’t earn anything more. Making the crisis is the way to maximize the income of agents in the electricity sector. Maximizing income means reaching into our pockets and transferring money to these companies.
What is the weight of the Eletrobrás privatization process in this problem?
In this crisis it directly has no weight, because obviously Eletrobrás has not yet been privatized. But it’s not just going to be privatization, it’s going to be denationalization. It is one more step in the loss of sovereignty in a strategic sector for the country. Who will say, in the future, how the thing will work in Brazil are companies outside Brazil, which will end up buying, how they are buying the entire Brazilian electricity sector.
Eletrobrás has 40% of hydraulic generation in Brazil, which is the cheapest energy. By the time they privatize, which is eventual, they have to produce crises, the tariff will explode and we are already seeing this.
With the privatization of Eletrobrás, we are going to have river owners again. If the guy, to maximize his profit, thinks he should empty the reservoir, he will empty the reservoir.
Finally, what is more serious from my point of view is that hydroelectric plants determine the flow of the great Brazilian rivers. In the past (the sector’s agents) owned the rivers. We created at ANA – in the 2014 crisis during the government of Dilma Rousseff – a series of rules that prevented the electricity sector from being the owner of the rivers. These rules are now all being broken by the Bolsonaro government. Returning to an absolutely centralized management, which disqualifies Ibama, disqualifies ANA, disqualifies the National System Operator (ONS).
With the privatization of Eletrobrás, we are going to have river owners again. If the guy, to maximize his profit, thinks he should empty the reservoir, he will empty the reservoir. All other uses, navigation, supply, irrigation, leisure will be subordinated to the interests of these new owners.
In the political dispute that we are going to fight in 2022 against authoritarianism and fascism, the issue of Eletrobrás must be central. We have to delay the privatization process, not let it happen and, if it happens, reverse it. Because privatization will be dramatic for the population of Brazil, for the economy of Brazil and, above all, for the poorest in Brazil.
Is this damage reversible? Is there anything that can be done to escape the consequences of this dismantling?
First you have to change the political vision, the role of the state. Public policies must return to having a very strong social, economic and environmental objective. This is a first step, the damage is huge. It has to, at least, stop, change the political concept that has been implemented and then make changes, revert decisions. Make changes that, as Lula says, put the poor on the budget and the rich on the income tax. It won’t be easy, but it’s possible and, above all, we have to believe.
Edition: Leandro Melito