Medium Term Analysis

Regarding the energy management annual planning, in June 2009, ONS issued the PEN 2009, which evaluated the energy supply to the BIPS on the period May/2009 – December/2013.

The analysis in the five-year horizon allows ONS to forward proposals for making strategic decisions, such as: constructions anticipations, the need for evaluation, by MME / EPE and CMSE, of the deployment of additional energy offer to the expansion program set for this period or even the establishment of reserve generation and / or energy reserve, pursuant to Law 10.848, of 03/15/2004 and Decree No. 6353 of 01/16/2008.

It is important to highlight, as one of the conclusions of the 2009 PEN, that the hydroelectricity will continue as the main source of power generation over the next five years, but the utilization of conventional thermoelectric sources such as coal, gas and oil, will increase over the period from 11, 895 MW (12.1%) to 25,267 MW (19.9%).

It is also worth mentioning that the energy supply conditions foreseen at the horizon 2009/2013 indicated the compliance to the supply criteria recommended by CNPE, since the risks of energy shortages are less than 5% in all subsystems.

As featured recommendation, the PEN 2009 brings the urgent need for assessments to quantify the cost / benefit associated with reduction of minimum flow restriction of the Sao Francisco River and / or expansion of export capacity of the Northeast region in order to ensure full use of the contracted energy in the region in 2013.

In this context, the PEN 2009 recommended that the location of new offer in 2012 and 2013, resulting from LENS A-3, 2009 and 2010 and from LER, 2009, should give priority to the South and Southeast / Midwest regions. Nevertheless, further expansions in the Northeast should be evaluated considering also the costs necessary for the expansion of export capacity of this region.

Another important recommendation was that there should be a follow-up of the planning and development of the logistics of providing oil for flexible thermal generation, so as to ensure the fuel supply for these thermal plants and their full use in situations in which they should be dispatched in order to ensure the safety of the system.

Short Term Analysis

With regard to the short-term implementation of operation programming guidelines, it should be noted that the distribution of inflows during the year 2009 in the BIPS did not occur uniformly, especially in the southern region of the country in which, in the first half, significantly reduced values, in the order of 30% of historical average, were registered.

This abnormal behavior of rainfall in the South region was previously identified by ONS, through a climate forecast analysis methodology, which allowed the adoption of operating policies that could mitigate its effects on the energy supply to the South region.

Thus, at CMSE, ONS carried out an evaluation of the energy supply conditions in the South region in 2009, concluding for the implementation, in this period of critical inputs to the region, of a safety minimum storage of 40% of its maximum storage capacity.

The complementary thermal dispatch in the South region was defined having this minimum level of storage as a reference, together with the maximization of the power supply to that region. From the second half of July, through the analysis of future climate conditions, ONS identified the reversal of the adverse hydrological framework in the South region, as reported at the CMSE meeting in May. This fact led to the gradual reduction of the complementary thermal dispatch in the South region.

The inflows to the South region remained high throughout the second half, reaching values in the order of 255% of MLT (Long Term Average) in September and resulting in an annual average of 124% of the MLT for the region.

In this context, it is important to emphasize that in the period from April to July, inflows were also not favorable in the Southeast / Midwest, demanding the implementation of complementary thermal dispatch in this region to ensure the achievement of the Target Level for November/2009, according to the existing methodology for the achievement of the safety Storage / Target Level at the end of the dry season.

However, there was also, in the SE / MW region, a significant recovery in inflows in the second semester, with the natural energy inflows reaching 181% of MLT in September, resulting in an annual average of 121% of MLT. This fact allowed the achievement of the Target Levels in November, with no need for complementary thermal dispatch.

In the North and Northeast regions, the annual average energy inflow stood at 110% and 98% of MLT, respectively.

It is also important to highlight that the combination of complementary thermal dispatch applied in the first semester with significant inflows observed in the second semester provided the filling of the BIPS storage reservoirs at the end of 2009.

The energy stored in the reservoirs of the SE / MW region reached, at the end of December, 72.6% of its maximum storage. In the Northeast, the storage has reached 65.5% at the end of the year. These values are 16.7% and 20.9%, respectively, higher than those registered at the end of 2008.

Another action that deserves mention concerns the operative strategy that was adopted during 2009, aiming at raising the storage level of Serra da Mesa hydroelectric plant's reservoir, in order to increase the BIPS regulating capacity, with benefits for the safety of the energy supply. It is worth noting that this measure was only possible from the actions that ONS has undertaken alongside Furnas, to allow operation of the generating units as synchronous compensators, which allowed the plant to minimize the generation without compromising the proper control of the 500 kV grid, to which it is connected. At the end of the year, the volume of the reservoir reached 59% of the maximum, a mark which is 20% higher than the value recorded in the last ten years.

As in previous years, there was an opportunity, in 2009, for energy integration with the electric systems of Uruguay and Argentina, with the export being effected, with resources of thermal generation not used to meet the requirements of the BIPS, complemented by hydroelectric power, through "return" mode, once the exported energy should be returned to Brazil by November 2009, as agreed between the parties.