Energy supply grows more than consumption, and Brazil 'throws away' excess; understand

Energy supply grows more than consumption, and Brazil 'throws away' excess; understand

To meet peak consumption, country still needs to connect thermoelectric plants - more expensive and polluting. This is because wind and solar sources, which have grown in recent years, do not offer energy steadily.

By Lais Carregosa, g1 - Brasília

Brazil is experiencing a contradictory situation: the country produces excess renewable energy, but still needs to connect thermoelectric plants - more expensive and polluting - to meet demand at peak times. The scenario has as consequence a higher cost to the consumer and challenges to the operation of the system.

According to the projection of the National Electric System Operator (ONS), in 2028, Brazil will have a demand of 110.98 gigawatts of energy, against an offer that can reach 281.56 gigawatts by the end of 2027. That is, supply will surpass demand by 2.5 times (see art below). 1 gigawatt capacity can light more than 1 million homes per year, depending on the source.

This situation of supply greater than demand is not entirely positive since it implies waste and increases costs (see below).

"When you have this situation, what do you have to do as a National Electrical System Operator? You have to limit this generation. And then you’ll have to limit this generation by a few characteristics. It will have to pour water, or it will shed sun, or it will pour wind", explains the general director of the ONS, Luiz Carlos Ciocchi.

In the sector, "vertigo" happens when the spillway is opened, which controls the flow of water from the hydroelectric plant, to let the water flow that will not be used for power generation. Also for solar and wind sources, it means to stop using the natural resource for power generation - it’s like "throwing away" the ability to generate.

Still, more and more the ONS will need to drive thermoelectric plants in times of peak consumption.

This is because excess energy occurs during the day, due to the generation of renewable energy, which begins to fall in the early evening.

Understand what is vertigo of Energy - Photo: Editoria de Arte/g1

(This article is part of a series on how public energy policies affect consumers. The series will also explain the cost of subsidies in the sector and the reasons behind the increase in electricity bills)

Why does Brazil produce excess energy?

For the former director of the National Electric Energy Agency (Aneel) Edvaldo Santana, the subsidies are responsible for the mismatch between energy supply and demand.

The subsidies work like this: to encourage some energy sources, such as wind and solar, the government grants discounts to the power plants in the tariffs of use of the wires for distribution and transmission of energy. These discounts (subsidies) are funded by consumers, including residential ones.

Subsidies were maintained even after these new energy sources became cheaper, which eventually encouraged the construction of more wind and solar power plants.

Santana explains that the planning of the sector should follow the premise that the supply must follow the demand for energy, which also provides for some more margin of supply in case of lack of rain and its impact on hydroelectric plants, for example. But in Brazil, the offer is passing much of this margin (see art below).

Energy supply will be more than double the demand - Photo: Editoria de Arte/g1

"Since then, more or less from 2013 and 2014, renewable sources - and this is good for Brazil - have had a lot of growth in the participation in the electric matrix, but all this driven by subsidy. Excess subsidy for sources that did not need caused the huge increase in supply, which shifted demand.

Today, supply is more than double the demand if it is to measure in terms of installed capacity [how much each plant can generate]," says the former director of Aneel.

The deputy superintendent of the Energy Research Company (EPE), Renato Haddad Simões Machado, explains that the government grants incentives to a technology when it wants to promote its entry into the system or when it wants to take her to places where private investment wouldn’t come naturally.

"The big problem is when these subsidies are no longer needed. For example, you want to encourage a certain technology to enter the system and it has already developed, it has already entered the system, it is already in a degree of maturity, and you would no longer need to have that subsidy acting. When you arrive at that moment, you end up bringing market distortions", he said.

Extreme heat makes Brazil drive thermoelectric plants that are more polluting and expensive.

Machado also says that one of these distortions is the expansion of a technology that would not be necessary to the system, but becomes economically attractive to companies because of subsidies.

That’s what happened with wind and solar. The maintenance of discounts, even after the consolidation of these sources in Brazil, led to their exponential growth. According to ONS, in 2023, wind energy already represented 12.8% of the national electric matrix, and solar, 5%.

For comparison, hydroelectric plants represent 47.1% of the system. And thermoelectric plants (more polluting), account for 12.2% of the total (see art below).

Why is it still necessary to drive thermoelectric plants?

Hydroelectric and thermoelectric plants can generate flexibly, that is, the ONS can drive these plants when it realizes that it needs more generation to meet the demand. Thus, these enterprises serve as a "reserve" for the system.

With the increase in wind and solar power generation, also grows the challenge of the system to meet the demand at the time that power generation by these sources falls, in the early evening.

The problem is that it is difficult to store what is generated by these sources. So, the energy needs to be consumed in the same amount and at the same time it is offered.

"The issue of intermittent sources (wind and solar), which have been growing a lot and are important to maintain a cleaner and sustainable matrix, [is that] they lack some reliability requirements that only some synchronous sources (thermal or hydroelectric) can provide, have greater requirements to provide greater reliability," explains the director of Electrical Energy Studies at EPE, Reinaldo Garcia.

The ONS has already driven thermoelectric plants to supply the peaks of demand. This was done in November and December last year, for example, when Brazil was hitting demand spikes at the end of the day. By 2024, the operator has already signaled that it will need to maintain the dispatch of these plants.

However, for 2028, the ONS projects a 50 gigawatt "fall ramp" of wind and solar power supply at the end of the day. It is as if almost four Itaipu plants were shut down every night.

In this case, it will be necessary to hire more flexible plants. "Today, if I have such a ramp to climb, I do not have the resources for this", says Ciocchi.

Why don’t hydroelectric plants top the demand?

According to Machado, from EPE, supplying these peaks of demand is a role historically played by hydroelectric plants.

However, there are more challenges today to build large hydroelectric plants that can meet this demand. The environmental restriction to explore the potential in sensitive areas and the effect of climate change are some reasons that affect the implementation of these plants.

"But today we have a situation in which much of the hydroelectric potential that we still have to explore is in regions of more difficult [feasibility], more sensitive environmental issues, far from the center of load [demand]. So, we need, yes, a complement, that hydroelectric plants for a while will be able to supply, but it is necessary that we have another type of resource in the system," he says.

The former president of EPE and executive director of the consultancy PSR, Luiz Barroso, also cites climate change as a factor that should impact the capacity of hydroelectric plants to supply peaks in demand.

"We will increasingly have the effect of climate change on flows, and we will increasingly have the dispute over water use. Then, water will become an increasingly scarce asset, and hydroelectric plants will have increasing restrictions to operate their reservoirs", he says.

For Machado, from EPE, thermoelectric plants would be a "natural option" to play this role.

"[But] there are other technologies that can enter, that other countries have already used, such as battery, demand response. That is, you give a signal to the consumer to reduce consumption at that time, you increase the capacity installed in hydroelectric plants that already exist", he highlights.

In addition to hiring new thermal plants, the general director of ONS also points out the drive of older plants. Another strategy would be to accelerate the demand response program.

"That is, instead of increasing generation, create incentives for large consumers to reduce demand at the most critical times. Instead of adding more expensive energy, give some incentive for someone to stop consuming at that time," says the ONS Director General.

Without storing energy, country 'throws away' generation potential. - Photo: Editoria Arte/G1

Fonte: G1 - O portal de notícias da Globo

What happens to excess energy?

As it does not store what is generated by wind and solar plants, the energy from these sources needs to be consumed in the same amount and at the same time it is offered. It is a physical feature of electrical systems.

The risk, if consumption is not synchronized with production, is to cause damage to the system.

"The Operator has to be aware, because otherwise the consequences for the system can be disastrous. And [it has to] evaluate the capacity and energy production of all these sources throughout Brazil, doing in a coordinated way shutdowns of these sources so that it continues to keep in force the laws of electrical circuits", explains Ciocchi.

Thus, the ONS can ask for the shutdown of plants to avoid an imbalance between the energy offered and the consumption in the electrical system. Ciocchi warns that stop using the generation potential for lack of demand is already a reality, which tends to be more frequent.

"Every day you have this challenge, particularly on weekends, because on weekends our load [demand] is even lower, because economic activity is not in its fullness," says the director-general of ONS.

Santana, former director of Aneel, argues that the government encourages industrial consumption in times of oversupply, cheapening energy.

"This was done until the 1980s, it was called 'time-guaranteed energy'. You guaranteed energy to some consumers - at the time it was just the industry -, for a while, to increase consumption in that region and did not need to build as much transmission to export [to other regions of the country]," he explained.

Santana points out that the current scenario of excess energy would not be completely solved by a policy of encouraging consumption, but the energy problem "thrown away" would be met.

How is the energy drained?

The electrical system is organized into generation, transmission, and distribution. The power plants connect to the transmission network, which cuts the country and is operated by ONS.

The distribution network, in turn, is at the other end, and has its operation more localized, at the state level or groupings of municipalities. It is connected to the transmission and distributes energy to consumers. At this stage, distribution companies are the ones that charge the consumer’s electricity bill.

The government contracts the construction and maintenance of transmission lines through auctions. Plants connected to the system use these lines to provide power.

In cases where the ONS needs to “spill" or "throw away" the energy, the plants stop using natural resources. That is, the hydroelectric plants open their spillways and let the water pass without moving the turbines for power generation, the wind ceases to rotate its blades and so on.

Because of the amount of power plants being built, auctions have beaten successive records of planned investments. In 2023 alone, R$37.4 billion in transmission lines were contracted.

These last events were held to contract the necessary infrastructure to drain wind and solar energy produced in the Northeast and north of Minas Gerais. These are lines that are being built because of excess supply, but that will be unused in many moments since there is no demand.

"Transmission anywhere in the world participates with a maximum of 7% of the total tariff [energy, paid by the consumer]. Here, will participate more and will operate in empty because most of the time will not have what to transmit, will have to expect load [demand]," explained Santana.

What is the impact on the electricity bill?

For the general director of ONS, it is important to question who will pay for the transmission lines. "Who is going to pay for an infrastructure addition that we don’t need right now?" he asks, referring to low demand.

According to Barroso, from the consultancy PSR, investments in transmission are one of the factors that tend to put pressure on the electricity bill.

The construction of these lines is remunerated by the Permitted Annual Revenue (RAP) of the winning companies of the auctions, which is defined by Aneel. RAP will stop at the rate of any agent who accesses the transmission and are passed on to the consumer. With high investments in transmission, this component of the tariff tends to increase.

"Networks will be a portion of the electricity bill, which will increase because we are building a lot of high voltage transmission. These auctions all that are successful become account, and account to pay", says Barroso.

The former director of Aneel, Edvaldo Santana, says that all consumers are impacted by these costs, but the residential consumer must pay more. "The small consumer will pay more, because he does not have the flexibility to negotiate the best contract with a commercial or generator."

On the other hand, the deputy superintendent of Transmission of EPE, Marcos Vinicius Farinha, argues that the transmission should be seen as an investment, instead of cost.

"We can’t look at the transmission just for the cost of it. It has an associated value that is precisely to bring this generation, or connect this generation, cheaper, and in the end this expansion minimizes the cost to the consumer," he concludes.

Source: G1 - Globo news portal