Super El Niño forecast increases projection of electricity bill costs for Brazilian consumers in 2027
A super El Niño scenario, which is expected to consolidate in the coming months, could have an impact on the budgets of Brazilian families next year. Analysts predict a significant increase in the value of the electricity bill, driven by the need to activate more thermoelectric plants in 2027. This measure aims to preserve the levels of hydroelectric reservoirs, which may enter the next cycle with reduced stocks due to the extreme weather event.
The reduced availability of water in the main reservoirs forces the energy system to depend on more expensive sources, such as thermoelectric plants. This imbalance can lead to the activation of more onerous tariff flags, resulting in higher electricity bills for both the productive sector and residential consumers across the country.
Pedro Moro, Manager of Prices and Market Studies at consultancy Thymos, emphasized that the evolution of hydrological conditions and, crucially, the volume of rainfall during the next wet period, will be decisive factors in defining energy prices in 2027.
Thymos’ projections indicate that the Difference Settlement Price (PLD), which serves as a reference for the market and influences sectoral costs, should be between R$150 per megawatt-hour (MWh) and R$200/MWh in the second half of 2026. Moro explained that, even with reservoirs at relatively comfortable levels, variations can be significant between months and times, depending on weather conditions and system operation.
The impacts of El Niño, however, are not distributed homogeneously across Brazil, varying considerably between regions and over time. While the South may record more intense rains in spring, favoring local reservoirs, the North and Northeast regions tend to experience a reduction in rainfall volumes during the wet period, starting in November. This contrast could prove decisive for the energy balance and price formation in 2027.
The expert added that higher temperatures in spring could also boost energy demand, contributing to high consumption and daily PLD volatility. The most direct consequence of the phenomenon is the application of tariff flags, which imply additional fees on the electricity bill.
Thymos consultancy projects that the tariff flag should remain yellow until November. For December, there is a prospect of a green flag, indicating the absence of extra charges.
Mateus Cavaliere, responsible for Planning and Market Intelligence at PSR, highlighted that one of the effects of El Niño could be a more intense rainy period in the Southeast, which would benefit water storage in the region.
Cavaliere highlighted the importance of observing whether the phenomenon will be restricted to the South or will advance to the Southeast, contributing to the filling of reservoirs. He pointed out that energy costs could increase this year, as, even with the current high levels of reservoirs, the electrical system could be pressured by greater consumption during a period of drought.
For 2027, the escalation of costs and their maintenance in the following year depend on the intensity of El Niño. Cavaliere warned that, if the reservoir level drops drastically, the impacts could extend until 2028, a scenario that should not be ruled out.
Sectoral efforts are crucial to reduce negative effects
Cavaliere also emphasized the relevance of the role of the National Electric Energy Agency (Aneel) in coordinating between the sector’s various agents in the face of extreme weather conditions, such as El Niño. He explained that distributors in the South need to be prepared for floods, while transmitters may face greater line losses due to cable heating in periods of intense heat.
Companies, according to Cavaliere, already implement measures to mitigate the impacts of severe weather events, including satellite monitoring and contingency plans with technical teams to speed up customer service.
“Although many discuss the potential of El Niño, the fundamental thing is the sector’s unity to minimize the impact as much as possible, and that is Aneel’s work,” said the expert.
The regulatory agency scheduled a meeting for next Monday, the 22nd, with representatives from the sector and government bodies. The objective is to discuss preventive measures to combat El Niño, and the meeting will take place in Manaus (AM), at the headquarters of Âmbar Energia Amazonas.
Nivalde de Castro, general coordinator of the Electric Sector Study Group (Gesel) at UFRJ, indicated that the highest risk of El Niño will be assessed from October onwards. The problem, according to him, could extend to 2027 if the effects of the phenomenon are more severe.
Castro clarified that there is no risk of a blackout, as the system has other sources that can be activated. However, the priority activation of thermoelectric plants to save reservoirs will raise tariff flags, resulting in higher energy costs and impacts on inflation.
Electric companies strengthen preparations for El Niño
Faced with the expectation of a super El Niño, companies and authorities in the electricity sector are intensifying the implementation of preventive measures. Efforts aim to mitigate impacts on distribution and transmission networks, as well as generation plants, in addition to strengthening contingency plans to ensure an effective response in the event of extreme events.
The recent experience of severe weather episodes has been fundamental in guiding actions, seeking to prevent further damage to equipment and facilities and optimize planning. At Copel, which last November faced an F4 tornado in Rio Bonito do Iguaçu (PR), the review of the contingency plan included an increase in the team and technological improvements for operational planning.
Gustavo Theodor Carvalho, Operation and Maintenance superintendent at Copel, informed that the company is hiring electricians, something that has not happened for a decade. More than 100 new professionals, with training scheduled for August, will be able to work in responding to incidents, just before the period of greatest potential impact of El Niño, starting in September.
Furthermore, Copel invests in an artificial intelligence tool developed in partnership with the Paraná Meteorological System (Simepar). The technology predicts operational impacts of weather events seven days in advance, allowing the strategic positioning of teams and equipment. Carvalho highlighted the assertiveness of the tool during last year’s storms.
At CPFL Energia, the lessons learned from the floods in Rio Grande do Sul in 2024 guide actions to avoid future problems. Gustavo Estrella, president of the company, stated that adaptation works were carried out, such as relocating the engine room from a substation to an upper floor, preventing flooding.
Collaboration between companies and government increases response capacity
During a distribution sector event held last week, Gustavo Estrella, from CPFL, highlighted the importance of the lessons learned about mobilization, communication with the public and cooperation between government bodies and companies in the sector themselves. He emphasized that “partnership with these sectors is essential so that we can mobilize efforts and be able to face the crisis.”
Celesc, in Santa Catarina, exemplifies this approach. The company, in partnership with the state Civil Defense Secretariat, structured a contingency plan for preventive and coordinated action. The president of Celesc, Edson Moritz, detailed that the plan involves constant meteorological monitoring, early mobilization of teams in its 16 regions, distribution of emergency equipment (such as own batteries and generators) and activation of support structures according to the severity of each event.
Moritz described the plan as “very advanced” and mentioned learning from the October 2023 floods, when he worked at the Casan sanitation company. He highlighted the complexity of Santa Catarina’s ecosystem, with varied challenges, which requires flexibility in management.
At the federal level, the Ministry of Mines and Energy (MME) and Aneel also intensify monitoring and mobilization for preventive measures against the “super El Niño”. Aneel even called the aforementioned meeting for next Monday, in Manaus, with sector agents and government bodies.
The regulatory agency also sent a letter to hydroelectric companies, requesting preventive actions focused on dam safety. The objective is to identify and mitigate risks that could compromise the safety of these structures.
Mateus Cavaliere, from PSR, reiterated the importance of Aneel in coordinating the various actors in extreme climate scenarios. For him, “the most important thing is the cohesion of the sector to try to minimize the impact as much as possible, and that is Aneel’s work.”
Energisa Group reinforces prevention and response measures
Grupo Energisa reported that, since 2011, it has continuously improved its actions in the face of extreme weather events, with a strategic focus on prevention, monitoring and response. The company highlighted that, from December 2025, it is also preparing to comply with the guidelines of Aneel Normative Resolution No. 1,137. This resolution aims to strengthen the capacity of distributors in situations of extreme events, with clear guidelines for preventive actions, such as pruning and vegetation management, and the reinforcement of procedures for emergencies, communication with the population and dissemination of information about interruptions and provision for reestablishment of supply.
According to Energisa, the preparation of the group’s nine distributors, which serve the Southeast, Center-West, Northeast and North of Brazil, includes specific fronts for heat waves, fires, storms and other contingencies. The objective is to reduce vulnerabilities, speed up service returns and ensure the safety of customers, employees and communities.
