Brazil faces higher electricity tariffs in 2027 due to El Niño

Experts warn that the upcoming El Niño event could raise Brazil's electricity tariffs by 2027. Reduced rainfall is expected to lower water levels in hydroelectric reservoirs, especially in the Central‑West basin, while higher temperatures will increase electricity demand for air‑conditioning. The combined effect could strain the national grid and force greater reliance on thermal power plants that burn fossil fuels and cost more to operate.

Analyst David Zylbersztajn says the risk of higher prices is not immediate but a clear upward trend, noting that “the impact on tariffs does not have to be explosive, but there is a tendency toward higher electricity costs.” He also highlighted secondary risks such as potential wild‑fire damage to transmission lines. The phenomenon may also affect agricultural output and Brazil’s biocombustible supply, further influencing the energy mix.

Current reservoir levels are described as adequate but with limited margin, underscoring the need for preventive measures to safeguard the power system against El Niño‑related stresses.