Via STRATFOR (subscription required), a quick summary of Brazil’s watergy crisis:
What Happened: Brazil’s energy crisis is worse than previously thought amid particularly low rainfall that has significantly reduced hydropower generation, according to the country’s energy minister Bento Albuquerque, Folha de Sao Paulo reported Aug. 31. Federal agencies in Brazil have been directed to cut overall energy consumption by 20%.
Why It Matters: The record drought means individual and corporate consumers of energy in Brazil are likely to pay more for electricity. In addition to the reduction of personal energy consumption, private companies will likely be encouraged to import more energy, most likely liquified natural gas from other countries in the region. With climate change expected to bring only more extreme weather in the coming years, the Brazilian government will be increasingly compelled to find alternate sources of energy, including potentially thermal power and liquified natural gas.
Background: Hydropower makes up over 60% of Brazil’s energy supply. Albuquerque said the drought had cost Brazil enough energy to power Rio de Janeiro for five months.