Brazil is facing the worst drought on record since the beginning of the current historical series, in 1950. According to an index that measures the amounts of rainwater and plant evapotranspiration, the current situation surpasses the droughts of 1998 and 2015/2016. The drought problem this year extends over 5 million square kilometers—58% of the national territory and 500,000 more than in 2015. Even though the data for 2024 will only be available by April, the low levels of rainfall and stress on vegetation, also a risk factor for fires, show that Brazil is on a path to increasingly dry years, according to the institute.
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Affected Cities
The August drought monitoring bulletin, published by Cemaden on Tuesday (3), indicates that 3,978 Brazilian municipalities were in some level of drought, with 201 of them in the extreme situation, the worst recorded. The state with the most droughts was São Paulo (82), followed by Minas Gerais (52) and Mato Grosso (24). According to the center’s forecast, the number could reach 4,583 this month. The institute’s integrated drought index considers rainfall soil moisture deficits and dry vegetation.
São Paulo
In São Paulo, a series of fires in the last month highlighted how agriculture is directly impacted by dry weather. The estimated loss caused by the fires is R$2 billion for the state’s agribusiness. The impact was mainly on sugarcane plantations, according to the State Secretary of Agriculture and Supply.
Use of Thermoelectric Power Plants
The Electric Sector Monitoring Committee (CMSE) approved, on Tuesday (3), the expansion of the contracting of natural gas thermoelectric power plants, in response to the extreme drought affecting Brazil. The committee also authorized the National Electric System Operator (ONS) to relax performance and safety criteria, if necessary, to guarantee supply during the period. This change allows the operator to alter limits on the use of generated electricity to avoid shortages.
Drought Affects Logistics
Transportation sector companies report financial and operational losses after droughts and floods affected activities in ports and airports. Now, they are looking for alternatives to mitigate the effects of the extreme weather events recorded in recent months. The port sector, for example, is trying to find ways to deal with the drought in the Amazon region, which is preventing some vessels from passing through.
Increase in Electricity Bills
The National Electric Energy Agency (ANEEL) announced on Wednesday (4) that it has activated the red flag level 1 on the electricity bill for September. The activation of the red flag and the increased use of thermal power plants are the sector’s responses to the extreme drought that is affecting Brazil and, on the one hand, reduces the availability of water for energy generation, and on the other, increases the population’s demand for it.
Analysis:
The severe drought of 2024 is having a profound impact on the Brazilian population and companies, generating an increase in energy costs due to the activation of the red flag on electricity bills, and putting water supplies at risk in several regions. For families, these increases represent an additional financial burden at a time of economic recovery, in addition to increasing the risk of rationing and health problems related to the lack of water and the increase in forest fires. Water stress in vegetation also increases the risk of fires, harming the environment and public health.
For companies, the expansion of natural gas-fired thermoelectric plants and the logistical challenges resulting from the drought, such as the interruption of river routes in the Amazon, can increase operating costs and hinder the flow of goods.
