UPDATE 1-Brazil asks industry to save electricity as drought saps hydro power

(Recasts, adds Mines & Energy Ministry details)

SAO PAULO, June 4 (Reuters) - Brazil’s Mines and Energy Ministry met with industry representatives on Friday to discuss how large electricity consumers can reduce demand to ease pressure on the grid resulting from Brazil’s worst drought in 92 years.

The drought threatens electricity generation, which depends heavily on hydroelectric plants, and could hamper wider economic growth this year.

A senior Economy Ministry official said on Friday the energy crisis has also been exacerbated by “structural” problems, making the planned privatization of state power giant Eletrobras all the more urgent.

In a statement, the Mines and Energy Ministry said it will lead efforts aimed at “emergency and structural solutions” for what experts say will be “demand response” measures.

According to the ministry, the Brazilian Association of Infrastructure and Basic Industries (Abdib) proposed “a plan that will help industry’s capacity to respond, and increase its energy efficiency actions,” according to the ministry.

Abrace, a group representing large electricity consuming industrial sectors, “stressed the importance of seeking voluntary mechanisms” to reduce demand “without affecting competitiveness”, the ministry said.

Separately on Friday, special secretary to the Economy Ministry Adolfo Sachsida said the worst drought in almost a century poses an increasing threat to growth this year.

In an online event hosted by the northern state of Ceara’s planning secretariat, Sachsida said the energy problems were also being exacerbated by “structural” issues.

Privatizing Eletrobras, the largest electricity company in Latin America, will attract private sector investment and reduce these structural risks, he said. (Reporting by Luciano Costa and Gabriel Ponte Writing by Jamie McGeever; Editing by David Gregorio)