A ANEEL The Brazilian National Electric Energy Agency (ANEEL) announced that the tariff flag will be yellow in May. This means that all Brazilian consumers will pay an additional cost of R$ 1,88 for every 100 kWh consumed on their electricity bill.
This is the first extra charge of the year, since the green tariff flag was in effect between January and April. According to the Agency, the change is related to the reduction in rainfall during the transition to the dry season, which decreases hydroelectric generation and increases the need to activate thermoelectric plants, which have a higher cost.
For the coming months, the market projects the maintenance of the yellow flag in June and the possibility of adopting the red flag level 1 from July onwards, as explained by Fred Menezes, Commercialization Director of Armor Energia.
"The scenario is influenced not only by the end of the wet season, but also by a more risk-averse pricing model, which increases the need to dispatch thermal power plants in the face of lower water availability," he said.
How does the fare flag system work?
Created in 2015, the tariff flag system aims to signal to consumers the cost of energy generation in the SIN (National Interconnected System) in each period.
Monthly, the ONS (National Electric System Operator) assesses operating conditions and defines the generation strategy needed to meet demand, estimating the costs that may be passed on to tariffs.
As Flags are classified into four levels.Green, yellow, and red (levels 1 and 2) reflect the variation in energy costs over time.
- Green flag: no additional charge;
- Yellow flag: An additional R$ 1,88 for every 100 kWh;
- Red flag level 1: An additional R$ 4,46 for every 100 kWh;
- Red flag level 2: An additional R$ 7,87 for every 100 kWh.
ANEEL announces the schedule for activating the tariff flags in 2026.
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