Medium Term Horizon

The process of energy operation planning, in the context of the annual cycle of the operation planning, results in two basic products. The Power Operation Annual Plan (PEN), whose horizon covers the period from May of the current year (end of rainy season) to December of the fifth year ahead, was issued by ONS in July/2011 in a report entitled PEN 2011. The second product is the monthly calculation of the future cost functions, using Newave medium term optimization model. This work enables the coupling of medium-term operating strategies with Decomp short-term model, which produces the energy policies of the operation of each week of the current month in the Monthly Operation Program.

PEN 2011 indicates a very favorable situation of energy supply to the market for the next five years, as had already been detected in the previous annual planning cycle.

The analysis of the conditions of the load services based on probabilistic risk assessment of energy deficit indicates the adequacy to the supply criteria established by the National Council for Energy Policies (CNPE), as the deficit risks are far below 5% for all subsystems on the horizon 2011-2015, with null values in the Northeast.

This result is mainly because of growth of new energy offer aggregate by the auctions of generation and transmission lines. From May 2011 to December 2015, it is planned the entry into operation of 243 new plants, of which 19 hydroelectric, 69 thermoelectric, 141 wind farms and 14 small hydroelectric plants, as well as remaining PROINFA plants and other small plants authorized by ANEEL.

Regarding the participation of different energy sources, the Brazilian power matrix will pass for a significant transformation in the next five years. The thermoelectric power will increase from the current 16,897 MW (15.6%) to 27,305 MW (19.8%). Wind power will have increased by 535%, increasing from the current 826 MW (0.8%) to 5248 MW (3.8%). The energy from biomass will increase 59% from 4577 MW (4.2%) to 7272 MW (5.3%).

The evolution of this matrix, maintaining the current trend of expansion of hydropower with little or no multi-year adjustment, makes flexible or low flexibility thermoelectric with moderate operating costs and low degree of uncertainty in fuel supply – natural gas, liquefied natural gas and coal - start to play a key role in the selection of projects to be offered in the next new energy auctions. Similarly, small plants and alternative sources of complementary generation during the dry period, such as wind and biomass, also come to play an important role in the operational security of the BIPS, as they act as "virtual containers", complementing the hydraulic generation during dry periods every year.

Also worth mentioning the analysis of the treatment of maximum demand, in which the peak capacity x demand balance indicates that the grid capacity available under PEN 2011 horizon is always higher than the estimated demand. However, the tendency is that it is increasingly necessary to the dispatch of thermal generation at peak hours above the inflexibility declared by the owner agents, depending on the severity of the peak loss for depletion of the reservoirs and / or internal restrictions on the transmission grid.

The need for additional thermal dispatch may be reduced if there is availability of wind generation higher than the one considered conservative in the peak balance (30% capacity factor), as well as greater availability of hydroelectric generation, associated with higher storage in reservoirs of the BIPS, which reduces losses due to depletion. These higher storage levels may result from more favorable inflows or operational security policies through the implementation of Short Term Operation Procedures (POCP). In addition to these resources, hydro peak capacity can also be enhanced by the deployment of new generating units in existing wells provisioned in some hydroelectric power plants in operation (about 5 GW, according to ABRAGE).

PEN 2011 main recommendations are listed below:

• Power evaluation results indicate the need to develop economic feasibility studies to expand the capacity of North-South and South-Southeast/Midwest interconnections;
• The studies for planning the supply expansion should take into account the needs to meet the maximum demand of the BIPS, so that the scale of the installed capacity for this service can be as economic as possible;
• In this sense, the MME and ANEEL should evaluate the establishment of regulatory mechanisms that encourage the installation of hydraulic power in the BIPS, either by motorization of the existing wells in operating plants, repowering of existing plants, or by the possibility of contracting power and / or capacity charges;
• The feasibility of energy auctions by source and region must be evaluated by MME.

Short Term Horizon

In 2011, the period from January to April was characterized by high inflows in the Southeast / Midwest, reaching 128% of historical average of the month (MLT), North, with 113% of MLT, and South, with 203% of the MLT. In the Northeast, inflows were below average, reaching 86% of MLT. This favorable hydrological scenario allowed at the end of April, the storage level in Southeast / Midwest reached 88% of its maximum stored energy, and even with below-average inflows, it was possible in the Northeast region to reach approximately 90% of the maximum, depending on the transfer of energy surplus of the BIPS for this region.

The favorable hydrometeorological situation in Southeast / Midwest has required the integrated operation of flood control in the basins of the rivers – Grande, Paranaíba, Tietê and Paraná - reservoirs. Coordinated by ONS, this operation allowed softening the natural flood peak of about 24,500 m³ / s, reducing it to values close to 16,000 m³ / s near Jupiá plant.

In the remaining months of the year, regions Southeast / Midwest, North and South remained in a favorable hydrological framework, with inflows above average, representing 112%, 114% and 145% of their historical averages. In the Northeast, were observed inflows below average, reaching 82% of MLT.

Due to the scenario of high inflows, the implementation of Short Term Operating Procedures in 2011 did not identify the need for complementary thermal dispatch to ensure that the BIPS’ target levels established for the regions Southeast / Midwest and Northeast in late November, corresponding to 42% and 25% of their maximum storage capacity, were achieved. The optimal operation of the hydrothermal system during the year allowed reaching the end of the dry season in November with 57% of the stored energy in the Southeast / Midwest and 46% in the Northeast.

In 2011, the Operator began issuing weekly PMO Executive Report, which publishes short term power guidelines as well as a future vision of the service, with an annual horizon. This document provides agents full access to key data and PMO results, enabling them to make their own sensitivity analyzes to define their actions strategies in the BIPS.

The power integration with the electrical systems of Uruguay and Argentina was performed with the export of 2547 GWh of energy to these countries, employing thermal generation not used to meet the requirements of the BIPS.