Brazil to raise electric power rates in May

Brazil's electric power watchdog Aneel announced on Friday that the electricity rate flag for May will be yellow. 

That means consumers will pay an additional 1.885 reais (US$0.33) for every 100kWh consumed. 

When hydroelectric plants – responsible for generating cheaper energy than thermal plants – operate at high capacity, Aneel activates the green flag. But when water availability decreases, the agency may switch to the yellow or red flags, leading to higher electricity rates for consumers.

The decision – which was expected by experts heard by BNamericas – was prompted by reduced rainfall due to the transition from the rainy season to the dry season. 

Since December 2024, the rate flag had remained green, reflecting favorable conditions for power generation in the country. 

But, according to the regulator, rainfall and water flow forecasts for the reservoir regions over the coming months are below average. 

Hydroelectric plants account for about half of Brazil's installed power capacity (110GW of 210GW). 

Next come thermal (47GW), wind (33GW), solar (18GW) and nuclear (1.9GW) power. 

The country also counts on 38GW of distributed generation, which basically consists of PV solar power.