Super El Niño could raise energy rates in 2027, says study

'Super El Niño' International climate models indicate a high probability of an El Niño forming in the second half of 2026. Part of the projections suggest that the phenomenon could reach strong or even extreme intensity, a scenario known as "super El Niño". If confirmed, experts point to a greater risk of heat waves, droughts, fires and changes in the rainfall regime, with possible impacts on hydroelectric energy generation. To prepare projections related to the increase in tariffs, the consultancies estimated two hydrological scenarios: one considering the occurrence of a Super El Niño; and another without the influence of the phenomenon. The results indicate that, in the Super El Niño scenario, the wet period between 2026 and 2027 should end with the storage of the National Interconnected System (SIN) reservoirs close to 70% in April. Without the influence of the phenomenon, the projected level is approximately 80%. Court of Auditors recommends 50 measures for Espírito Santo to face Super El Niño Divulgação/TCE-ES Red flags in 2027 With the meteorological phenomenon on the radar, the study predicts the activation of red flags level 1 and level 2 between four months of 2027, between July and October (understand more below). According to the study, the biggest tariff impact should be recorded in the South Region, where the average difference between the two scenarios reaches 3.3 percentage points. The consultancies explain that the effects on tariffs are transmitted, through tariff flags, by variables such as the Difference Settlement Price (PLD), hydrological risk, sectoral charges and costs related to the distributors' contracting portfolio. In the other months, the green flag should predominate in the first half of the year, while the yellow flag tends to be activated during the dry period, following behavior similar to the scenario without the occurrence of the phenomenon. How the color system works ? Aneel's color system signals the energy generation conditions. If it rains little and the hydroelectric plants generate less, it is necessary to activate thermoelectric plants, which are more expensive. ? To pay for these plants, Aneel activates the yellow, red 1 or red 2 flags, with extra fees on the electricity bill. Find out how much each flag costs Each tariff flag activated by Aneel can generate an extra cost for the consumer: ?green flag (favorable energy generation conditions) – at no extra cost; ?yellow flag (less favorable conditions) – R$ 18.85 per MWh (megawatt-hour) used (or R$ 1.88 for every 100kWh); ?red flag level 1 (unfavorable conditions) – R$ 44.63 per MWh used (or R$ 4.46 for every 100 kWh); ?red flag level 2 (very unfavorable conditions) – R$ 78.77 per MWh used (or R$ 7.87 for every 100 kWh).