Post date: Jan 10, 2013 1:42:55 AM
Latest energy crisis in Brazil risking the country's economic development.
BRASILIA, BRAZIL (JANUARY 09, 2013) (REUTERS) - A hot, dry summer, coupled with the worst drought in decades in the poorer northeast of Brazil, has shown up the vulnerable side of the country's energy system, raising the risk of rationing again if rain doesn't fall soon.
The budding energy crisis has already pushed up electricity prices on the spot market and forced Brazil to import more liquefied natural gas to fuel more costly gas-fired generators that are running at full capacity and producing 25 percent of the national grid's electricity.On Wednesday (January 09), in Brasilia, the country's Energy Minister, Edison Lobão, assured the nation that rationing energy was not an option, and that the country still has enough reserves to cope with the lack of rainfall.
"We still have (water) reserves in our dams that we can still use, but I don't believe it will come to that," he said, addressing questions from the national media.
The last time Brazil was forced to ration energy was in 2001. Back then, the crisis led millions to spend their nights with candlelight and forced factories to cut down output, shaving one percent off of the national economic growth.
On Wednesday (January 09), Lobão sought to calm fears that factories will have to start producing less.
"Industries will keep getting the necessary energy supply, because the power plants (run on natural gas) will keep on providing electricity," he said.
Despite such guarantees, worries remain that the current crisis could trip up Brazil's economy, which has already struggled to grow for the past two years.
Brazilian physicist Luiz Pinguelli Rosa said the story could have been different if precautionary measures had been taken years ago.
"If the country had started using power plants run on gas, in a controlled manner, today we would be in a more comfortable position," he said.
President Dilma Rousseff has promised to reduce the high energy bills, which millions of Brazilians pay every month, by 20 percent in 2013, but experts predict that if the water levels in the country's dams don't go up soon, that promise will not be fulfilled.