Planning and Future of the Brazilian Energy Sector

Brazil’s annual consumption of power is 555 TWh (Terawatt-hour), with an average growth of 4% per year in the last ten years. With this level of demand, the need to invest in order to ensure the offer becomes undeniable. After the 2001 blackout, energy security became one of the most urgent issues for the country's development.

In 1990, the developed world - United States and Western Europe - represented two-thirds of the global electricity consumption. Nowadays, developing countries already account for 50% of the total. Such an outlook may change until 2035. The USA and Europe may start to consume almost 12 thousand TWh and developing countries over 20 thousand TWh.

Eletrobrás President, José da Costa Carvalho Neto presented these numbers Tuesday (21) during the opening of Power-Gen Brazil. According to him, the BRICS (Brazil, Russia, India, China and South Africa) will lead this evolution. “Considering this scenario, India should grow 226%, China 116.3%, Brazil 99.4% and Russia 49.9% until 2035.” In the same period, consumption in the USA would grow 21.9%, well below the global average of 69.2%.

In terms of global participation, Eletrobrás estimates that China would be accountable for 27.5% of total consumption, USA for 14.7%, India for 7.8%, Russia for 3.9% and Brazil would reach 2.9%.

The installed capacity jumped in Brazil in the last few years. In 2002 it was 80.3 GW and it reached 124.8 GW in 2013. Growth represented 55.4% in the period, an average of 4.2% per year, very close to consumption growth. Today, power plants alone already account for 85.3 GW of power. And thermal plants - which produced 8.5 GW in 2002 - are already responsible for 19.3 GW. Until 2025, the installed capacity should reach 195.1 GW.

Similarly, the basic transmission network had 76 thousand kilometers of extension in 2002, and today it has 116 thousand kilometers. Increase accounted for 54%, again 4% per year. With this, the number of interruptions in supply, which was 21 annual occurrences in 1997 totaling 27 hours, was reduced to ten annual occurrences with an average duration of 18 hours.

Thus, the electricity service in Brazil is the second most well assessed by the population, with 18% very satisfied and highly satisfied and 58% satisfied. Therefore, total approval rate is 76%, only below the 78% of Correios.

And the president of Eletrobrás is confident about the system’s development. In his opinion, Brazil should remain the world’s second in hydropower – the first is China. “We already take advantage of 32.7% of Brazil's hydroelectric potential. There is another 13.1% considered in the ten-year plan, 3.3% which can be used in basins without intervention in indigenous lands and 5.4% with intervention in indigenous lands, but with good mitigation opportunities. Besides, there is another 6.7% potential in small central power plants,” he detailed.

This amounts to 61.2% of the hydropower potential; however, José Carvalho da Costa Neto declares that we will never achieve 100% without causing a negative impact in the environment, indigenous people and riverside communities. However, he truly believes in Brazil’s potential for alternative sources.

“We have potential for 345 GW of power with winds 100m high. Our wind has a much lower volatility than in Europe. I can affirm you: the same success we had with wind power, we will have with solar power,” he ensured.

In addition, he reminded that Brazil has the sixth largest uranium reserve in the world. “But we only measured one-third of our territory. When we explore 100% we will have the second largest uranium reserve. And we are only one of the five countries dominating uranium production in the world, from mining to enriching,” he stated.

In what regards to thermal plants, he reminded that they have energy security in the country. “If we didn’t have these thermal plants, we would already have implemented rationing due to this hydrological period we are going through,” he said.

But he bets on an increasingly greater diversity of sources, not only in Brazil, but in the world. “Except for power plants, renewable sources globally account for 992 TWh today. In 2035, they should represent 5,785 TWh. But the ideal would be at least 9,089 TWh”, he explained.

Building plants in Tapajós River is one of the next steps for the Brazilian power sector. “Only in generation, we will invest R$ 220 billion. And over R$ 70 billion in transmission,” detailed Eletrobrás’ president.

For him, the main challenges the country will face in the future include solving the difficulties to obtain environmental licensing, which forces companies to deal with all environmental agents, nationwide, in states and municipalities, and delays the process. In addition, he believes in the integration of the power network in South America. “Hydrological periods in each country are supplementary. It is a win-win situation, because the minimum of the sum is higher than the sum of the minimum. But this is both a political and a logistic challenge.”

About the financial crisis in the power sector, the executive understands that the Government measures were proper. “Eletrobrás was very impacted by these fair measures to renew concessions, but we are working to reduce costs. If this policy remains, there is an expected rate structural reduction trend in Brazil.”

Brazil ranked 30th in the World Energy Council survey, which assessed sustainability, energy safety and equity. Brazil received A for sustainability, B for safety and C for equity. For the president of Eletrobrás, being ranked 30 may be good compared to other indices, but is far from ideal for the 7th largest economy in the world. “Since 2003, we supplied for 15 million inhabitants who did not count on power in the 21st century. There is still 1 million to go. We will pursue the improvement in this assessment.”