Brazil to Avoid Rationing Energy

Brazil's government is planning to take steps to save energy through more efficient usage to avoid blackouts and the risk of rationing, Energy Minister Eduardo Braga said on Friday.

The worst drought in more than 80 years has drained hydroelectric reservoir levels in the important southeast region of Brazil, which accounts for 70 percent of Brazil's hydroelectric-dominated generation capacity.

Last week rolling blackouts swept across parts of Brazil as the national grid operator ordered select power cuts to avoid a larger crisis in a fragile electric system that is buckling under the strains of record-breaking heat and dryness.

"We are going to launch an energy efficiency program that will certainly have a positive effect," Braga told reporters after meeting with electricity sector officials.

The minister did not detail what steps would be taken to reduce demand, but he stressed that they would not include power rationing. He said Brazil has additional 5,000 megawatts available to back up the grid.

Braga said the program will be started in 60 to 90 days, when Brazil's rainy season is over.

Brazilian officials have repeatedly denied the need for energy rationing as they resort to more costly thermal plants to make up for lower hydroelectric generation.

However, water rationing will almost certainly be needed in the region's largest cities, starting with the biggest, Sao Paulo.

The national electric grid operator, the ONS, said earlier on Friday that hydroelectric reservoir levels in southeast Brazil will likely rise to 20 percent capacity by the end of February, from 16.8 percent currently.

Despite the projected rise, levels remain at their lowest in over a decade. January and February are historically the rainiest months for a region that accounts for more than 60 percent of Brazil's gross domestic product.

Below-average precipitation is the last problem Brazil needs now, with economic activity grinding to a halt, drinking water reservoirs nearly dry, and export crops like cane and coffee facing another year of damage.

Some economists are starting to factor in the potential of electricity rationing in their forecasts for Brazil in 2015. (Reporting by Rodrigo Viga Gaier and Anna Flávia Rochas; Editing by Chizu Nomiyama)