Oil report

Brazil grid operator says power supplies guaranteed despite severe drought

RIO DE JANEIRO, June 5 (Reuters) - Brazil’s national grid operator ONS said on Saturday it has taken measures to guarantee power supplies in Brazil this year, dismissing shortages in hydro electricity due to the worst drought since 1930.

The agency admitted that a technical note with energy projections for the June to November period this year did point to risks to supplies, but said that such a scenario should be discarded after measures adopted by the government.

“Several measures approved by the Electric Sector Monitoring Committee (CMSE) are already underway, and that means that ... the supply of energy and power is guaranteed in 2021,” the grid operator said in a statement to Reuters.

Among the actions being taken, the agency highlighted the easing of hydro restrictions for dams in the São Francisco and Paraná river basins, increased thermal generation with guaranteed fuel supplies and the import of energy from neighboring Argentina and Uruguay.

ONS said a campaign to make people more aware of the need to save water and electricity was also underway.

The agency stressed that Brazil is going through a water crisis due to a lack of rainfall and that the country’s hydroelectric reservoirs have received a volume of water below the historical average during the last seven years.

The worst drought in almost a century poses a risk to growth this year, just as Brazil’s economy starts to perform better than most analysts had expected, the special secretary to the Economy Ministry Adolfo Sachsida said on Friday.

The drought will also impact river navigation and make transportation of goods more expensive in the world’s largest exporter of commodities, ranging from soybeans to coffee and sugar.

Reporting by Marta Nogueira and Rodrigo Viga Editing by Marguerita Choy