Report points out twists in the Brazilian energy sector

Posted on 13 November 2012  | 
From WWF-Brasil, with information from Agência Brasil and Valor Econômico

São Paulo (SP), Brazil – A report launched on November, 11, at the Getulio Vargas Foundation, in São Paulo, points out the mistakes made by the Brazilian energy policy and presents the alternatives for efficient electric power generation, transmission, distribution, and use, based on environmental sustainability and social justice. The report was prepared by researchers from public and private organizations, including non-governmental ones, and it was funded chiefly by tax payers’ money.

The report reveals that Brazil throws away 20% of its power while transmitting the energy from the power plants to the consumption centers – and this is one of the highest rates in the world. Losses from the electric power transmission are less than 6% in Chile and around 7% in Europe.

This calculation was obtained in the auditing made by the Brazilian federal Court of Audit, the TCU (Tribunal de Contas da União). According to the authors of the study, the government’s strategy of investing in hydro-electric plants which are located far away from the big cities can worsen the situation, due to long distance transmission costs. The federal court of audit also estimated that those losses have a 5% impact over the average fare. When taking into account the unbilled energy and the uncollected tax, the loss in public money amounts to around R$ 20 billion (Brazilian Real) in the year of 2007 alone.

The document also shows that 8% of the energy generated in Brazil is exported through products with low value added, such as iron ore, steel, paper and pulp. Those products have low impact in generating jobs, high social and environmental costs, and add up to the Brazilians’ monthly pay bill.

Meanwhile, the government maintains its plans for speeding up the works to build hydro-electric plants in the Amazon and other regions, causing heavy impact upon the environment and mankind – i.e. greenhouse gas emissions, biological diversity losses, and risks to the livelihoods and rights of local populations. Those consequences are often not taken into consideration in the studies made by the governmental electric sector and private businessmen.

In the case of Belo Monte and Tapajós hydro-electric power plants, the risk scenarios presented in the study reveal that when one weighs the variables such as the building time and costs, the resulting carbon emissions, and the market prices for carbon credits, then the venture becomes unviable. 

Regarding the funding of large hydro-electric plants, the report makes it clear that the decisions by financial organizations are guided by granted environmental licenses, which are legally biased and violate voluntary agreements, such as the Equator Principles and the Green Protocol.

Disregarded alternatives – The report points out that the huge potential of solar and wind energy is disregarded in public policies for the energy sector. The available technologies indicates that the use of solar power captured in less than 5% of the urban area in Brazil would be enough to supply 10% of the national electric power demand. As for the wind power, its unexploited potential is 300 Gigawatts (GW), which is the equivalent of three times the total installed capacity in the country.

When analyzing the electric power from biological sources in the energy matrix, the authors note that the use of biomass from sugar cane for electric power co-generation means an important power source for the country, and means an alternative to oil and other fossil fuels. The generation potential of sugar cane biomass could reach an average of 14,000 megawatts (MW) by 2021, and this is the equivalent of the power produced by three plants like the one in Belo Monte.

"Biomass is complementary to hydro-electric power”, stressed Pedro Bara Neto, the infrastructure strategy leader at WWF’s Living Amazon Initiative.

Another alert from the report regards the unbalance in public investments, which contributes to the lack of competitiveness of the Brazilian industry production. According to the document, by 2020 the federal government will invest R$ 590 billion in the oil and gas sector and R$ 190 billion in the construction of hydro-electric plants; meanwhile, no amount has yet been determined in the official plans for the energy efficiency.

Urgent review – For all these reasons, the authors call the attention to the need for an urgent review of the governmental guidelines for determining future scenarios of energy demand, to replace those which are exclusively based on the economic growth projections from the Gross Domestic Product (GDP) and do not take into account vital issues such as the energy efficiency and its destination.

The experts still point out that it is necessary to prioritize the increase in energy efficiency and the decrease in waste. They stress that the economic efficiency of the energy sector is a vital element in technological innovation and industrial competitiveness, and yet there are no incentives for that.

The authors of the report, entitled The Brazilian electric power sector and sustainability in the 21st century – opportunities and challenges, are WWF-Brazil, the Social and Environmental Institute ISA, Greenpeace, Friends of the Earth-Brazilian Amazon, International Rivers-Brazil, and Amazon Watch, as well as individual researchers such as Célio Bermann, from the University of São Paulo’s (USP) Electric Technique and Energy Institute; Philip Fearnside, from Inpa (the National Amazon Research Institute); and Wilson Cabral de Sousa Júnior, from ITA, the Aeronautical Technology Institute.

The Brazilian report launched on November, 11, points out that the huge potential of solar and wind energy is disregarded in public policies for the energy sector.
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