In South America, Brazil’s energy suppliers are under pressure as national power grid operator ONS restricted electricity distribution during peak-time this week causing outages in nine states in the country.
Grid operator ONS requested that supply from 11 power plants, or about 5% of the distribution system be automatically cut off on Monday.
Energy provider CPFL Energia SA, which supplies electricity to three Brazilian states, said in a statement that the company turned off its power lines “following the standard procedure [from ONS] to stabilize the national electric system.”
Another energy supplier Electropaulo Metropolitana SA, which has a service base of 20.1 million customers in the Sao Paulo metropolitan region, cut more than 700 megawatts from its area of operation on ONS instructions, according to a statement on its website.
Electricity rationing concerns
The financial markets in Brazil responded with a drop in CPFL Energia’s shares as concerns circulate that the country is facing energy rationing as dry weather is reducing generation from hydroelectric dams, reports Bloomberg.
An analyst at an investment brokerage told the news service that “there has been a lot of concern among investors about new rationing, so the outage this afternoon left everyone afraid it is already happening”.
Dam levels in the Southeastern and Midwest regions reportedly fell to 18.3% on January 18, according to ONS data.
Building a smarter grid
The news comes as the Mining and Energy Ministry said that the country plans to diversify its future energy mix making it less reliant on hydro-power.
A new report out this week also predicts that the Brazil’s smart grid market, allowing ONS to better monitor its grid and integrate renewable energy sources into it, is expected to grow by 21.17% over the period 2014-2019, according to market research company Tech Navio.