Energy policy of Brazil


Energy policy of Brazil

Brazil is the 10th largest energy consumer in the world and the largest in South America. At the same time, it is an important oil and gas producer in the region and the world's second largest ethanol fuel producer.

The governmental agencies responsible for energy policy are the Ministry of Mines and Energy (Ministério de Minas e Energia), the National Council for Energy Policy (CNPE), the National Agency of Petroleum, Natural Gas and Biofuels (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis - ANP), and the National Agency of Electricity (Agência Nacional de Energia Elétrica - ANEEL).OECD/IEA. World Energy Outlook 2006. ISBN 92-64-10989-7] cite web | publisher= |url= http://www.ctgas.com.br/conteudo/img_upload/Project_cloling_report_Narrative_Mar_20_05.pdf | title = Project Closing Report. Natural Gas Centre of Excellence Project. Narrative | format = PDF | date = March 20 2005 | accessdate=2007-05-12]

Reforms of the energy sector

At the end of the 1990s and the beginning of the 2000s, Brazil's energy sector underwent market liberalization. In 1997, the Petroleum Investment Law was adopted, establishing a legal and regulatory framework, and liberalizing oil production. The key objectives of the law were the creation of the CNPE and the ANP, increased use of natural gas, increased competition in the energy market, and investments in power generation. The state monopoly of oil and gas exploration was ended, and energy subsidies were reduced. However, the government retained monopoly control of key energy complexes and administered the price of certain energy products.cite web | publisher= Baker Institute |url= http://www.rice.edu/energy/publications/docs/BrazilEnergySector_MainStudy.pdf | title = Critical issues in Brazil's energy sector | format = PDF | date = June 2004 | accessdate=2007-05-19]

Current government policies concentrate mainly on the improvement of energy efficiency, in both residential and industrial sectors, as well as increasing renewable energy. Further restructuring of the energy sector will be one of the key issues for ensuring sufficient energy investments to meet the rising need for fuel and electricity.

Primary energy sources

Oil

Brazil is the world's 15th largest oil producer. Up to 1997, the oil monopoly belonged to Petróleo Brasileiro S.A. (Petrobras). As of today, more than 50 oil companies are engaged in oil exploration. The only global oil producer is Petrobras, with output of more than convert|2|Moilbbl|m3 of oil equivalent per day. It is also a major distributor of oil products, and owns oil refineries and oil tankers.

In 2006, Brazil had convert|11.2|Goilbbl|m3 the second-largest proven oil reserves in South America after Venezuela. The vast majority of proven reserves are located at Campos and Santos offshore basins on the southeast coast of Brazil. [http://www.eia.doe.gov/emeu/cabs/Brazil/pdf.pdf Country Analysis Brief. Brazil] , US Energy Information Agency, August 2006] In November 2007, Petrobras announced that it believes the offshore Tupi oil field has between 5 and convert|8|Goilbbl|m3 of recoverable light oil and neighbouring fields may even contain more, which all in all could result in Brazil becoming one of the largest producers of oil in the world. [ cite web | author = Gary Duffy | title= Brazil announces new oil reserves |url= http://news.bbc.co.uk/2/hi/americas/7086264.stm | publisher = BBC | date=2007-11-09 | accessdate=2007-12-12]

Transpetro, a wholly owned subsidiary of Petrobras, operates a crude oil transport network. The system consists of convert|4000|mi|km of crude oil pipelines, coastal import terminals, and inland storage facilities.

Natural gas

At the end of 2005, the proven reserves of Brazil's natural gas were 306 bcm, with possible reserves expected to be 15 times higher. Until recently natural gas was produced as a by-product of the oil industry. The main reserves in use are located at Campos and Santos Basins. Other natural gas basins include Foz do Amazonas, Ceara e Potiguar, Pernambuco e Paraíba,Sergipe/Alagoas, Espírito Santo and Amazonas (onshore). Petrobras controls over 90 percent of Brazil’s natural gas reserves.

Brazil's inland gas pipeline systems are operated by Petrobras subsidiary Transpetro. In 2005, construction began on the Gas Unificação (Gasun pipeline) which will link Mato Grosso do Sul in southwest Brazil, to Maranhão in the northeast. China’s Sinopec is a contractor for the Gasene pipeline, which will link the northeast and southeast networks. Petrobras is also constructing the Urucu-Manaus pipeline, which will link the Urucu gas reserves to power plants in the state of Amazonas.

In 2005, the gas production was 18.7 bcm, which is less than the natural gas consumption of Brazil. Gas imports come mainly from Bolivia's Rio Grande bassin through the Bolivia-Brazil gas pipeline (Gasbol pipeline), from Argentina through the Transportadora de Gas de Mercosur pipeline (Paraná-Uruguayana pipeline), and from LNG import. Brazil has held talks with Venezuela and Argentina to build a new pipeline system Gran Gasoducto del Sur linking the three countries; however, the plan has not moved beyond the planning stages.

Coal

Brazil has total coal reserves of about 30 billion tonnes, but the deposits vary by the quality and quantity. The proved recoverable reserves are around 10 billion tonnes.cite paper | title = Survey of energy resources | publisher = World Energy Council | date = 2004 | url = http://www.worldenergy.org/documents/ser2004.pdf | format = PDF | accessdate = 2007-07-13] In 2004 Brazil produced 5.4 million tonnes of coal, while coal consumption reached 21.9 million tonnes. Almost all of Brazil’s coal output is steam coal, of which about 85% is fired in power stations. Reserves of subbituminous coal are located mostly in the states of Rio Grande do Sul, Santa Catarina and Paraná.

Oil shale

Brazil has the world's second largest known oil shale (the Irati shale and lacustrine deposits) resources and has second largest shale oil production after Estonia. Oil shale resources lie in São Mateus do Sul, Paraná, and in Vale do Paraíba. Brazil has developed the world’s largest surface oil shale pyrolysis retort Petrosix, operated by Petrobras. Production in 1999 was about 200,000 tonnes. [http://www.hubbertpeak.com/laherrere/OilShaleReview200509.pdf Review on oil shale data] , by Jean Laherrere, September 2005] [http://www.kirj.ee/oilshale/oil-2006-3-2.pdf Oil Shales in the world and Turkey; reservs, current situation and future prospects: a review] , by N. E. Altun, C. Hiçyilmaz, J.-Y. Hwang, A. Suat Bağci, M. V. Kök. Oil Shale. A Scientific-Technical Journal, 2006, Vol. 23, No. 3 pp.211-227. ISSN 0208-189X]

Uranium

Brazil has the 6th largest uranium reserves in the world.cite web | publisher= |url= http://www.eletronuclear.gov.br/downloads/41/49.pdf | author = Ronaldo C. Fabrício | publisher= Eletronuclear | title = Outlook of Nuclear Power in Brazil | format = PDF | date = March 20 2005 | accessdate=2007-05-12] Deposits of uranium are found in eight different states of Brazil. Proven reserves are 162,000 tonnes. Cumulative production at the end of 2002 was less than 1,400 tonnes. The Poços de Caldas production centre in Minas Gerais state was shut down in 1997 and was replaced by a new plant at Lagoa Real in Bahia. There is a plan to build another production center at Itatiaia.

Electricity

Power sector reforms were launched in the mid-1990s and a new regulatory framework was applied in 2004. In 2004, Brazil had 86.5 GW of installed generating capacity and it produced 387 Twh of electricity. As of today 66% of distribution and 28% of power generation is owned by private companies. In 2004, 59 companies operated in power generation and 64 in electricity distribution.cite web | title = OECD Economic Survey of Brazil 2005: Regulation of the electricity sector | type = PDF | url = http://www.oecd.org/dataoecd/12/11/34427493.pdf | accessdate = May 12 | accessyear = 2007]

The major power company is Centrais Elétricas Brasileiras (Eletrobrás), which together with its subsidiaries generates and transmits approximately 60% of Brazil's electric supply. The largest private-owned power company is Tractebel Energia. An independent system operator (Operador Nacional do Sistema Elétrico - ONS), responsible for the technical coordination of electricity dispatching and for the management of transmission services, and a wholesale market were created in 1998.

During the electricity crisis in 2001, the government launched a program to build 55 gas-fired power stations with a total capacity of 22 GW, but only 19 power stations were built, with a total capacity of 4,012 MW.

Hydropower

Brazil is the third largest hydroelectricity producer in the world after China and Canada. In 2004 hydropower accounted for 83% of Brazilian power production. The gross theoretical capability exceeds 3,000 TWh per annum, of which 800 TWh per annum is economically exploitable. In 2004, Brazil produced 321TWh of hydropower.cite web | publisher= International Energy Agency | url= http://www.iea.org/dbtw-wpd/Textbase/nppdf/free/2006/key2006.pdf | title = Key World Energy Statistics -- 2006 Edition | format=PDF | date = 2006 | accessdate=2007-07-13]

The installed capacity is 59 GW. Brazil co-owns the Itaipu hydroelectric power plant on the Paraná River located on the border between Brazil and Paraguay, which is the world's second largest operational hydroelectric power plant with installed generation capacity of 14 GW by 20 generating units of 700 MW each. [cite web | title = Power: World's biggest hydroelectric facility | work = USGS | url = http://ga.water.usgs.gov/edu/hybiggest.html | accessdate = May 18 | accessyear = 2006 ] The first new hydroelectric power station after more than twenty years will be the Belo Monte Dam.

Due the Brazil's reliance on hydroelectric power, the drought in 2000-2001 resulted in recurring blackouts, and in June 2001 the government was forced to ration electricity usage, which was ended in late 2001. However, the country still remains vulnerable to power outages.

Nuclear energy

Nuclear energy accounts for about 4% of Brazil's electricity.cite web | publisher= Uranium Information Centre |url= http://www.uic.com.au/nip95.htm | title = Nuclear Power in Brazil. Briefing Paper # 95 | date = May 2007 | accessdate=2007-05-19] The nuclear power generation monopoly is owned by Eletronuclear (Eletrobrás Termonuclear S/A), a wholly-owned subsidiary of Eletrobrás. Nuclear energy is produced by two reactors at Angra, which is Brazil's sole nuclear power plant. It is located at the Central Nuclear Almirante Álvaro Alberto (CNAAA) on the Praia de Itaorna in Angra dos Reis, Rio de Janeiro, Brazil. It consists of two pressurized water reactors, Angra I, with capacity of 657 MW, connected to the power grid in 1982, and Angra II, with capacity of 1,350 MW, connected in 2000. A third reactor, Angra III, with a projected output of 1,350 MW, is planned to be finished by 2010, but work has been paralyzed due to environmental concerns and lack of funds. By 2025 Brazil plans to build seven more reactors.cite web | publisher= Mecropress |url= http://www.mercopress.com/Detalle.asp?NUM=9036 | title = Brazil plans to build seven nuclear reactors | date = 23 October 2006 | accessdate=2007-05-19]

olar power

The total installed photovoltaic power capacity in Brazil is estimated to be between 12 and 15 MWp, of which 50% is for telecommunications systems and 50% for rural energy systems.

Wind energy

Brazil's gross wind resource potential is estimated to be about 140 GW, of which 30 GW could be effectively transformed into wind power projects. The current installed capacity is 22.075 MW generating about 54 GWh per annum. Update 11/07: According to a Nov-07 award for Brazil's Proinfa program, current capacity is 237 MW, of which 208 was added in 2006; agreements for 1,423 MW are to be in operation by the end of 2008.

Biofuels

Due to its ethanol fuel production, Brazil has sometimes been described as a bio-energy superpower. [ [http://www.tierramerica.net/2004/1030/iarticulo.shtml Brazil - A Bio-Energy Superpower] , by Mario Osava, Tierramérica] Ethanol fuel is produced from sugar cane. Brazil has the largest sugar cane crop in the world, and is the largest exporter of ethanol in the world. With the 1973 oil crisis, the Brazilian government initiated in 1975 the Pró-Álcool program. The Pró-Álcool or "Programa Nacional do Álcool" (National Alcohol Program) was a nation-wide program financed by the government to phase out all automobile fuels derived from fossil fuels in favour of ethanol. The program successfully reduced by 10 million the number of cars running on gasoline in Brazil, thereby reducing the country's dependence on oil imports.

The production and consumption of biodiesel is expected to reach to 2% of diesel fuel in 2008 and 5% in 2013.

Brazil's peat reserves are estimated at 25 billion tonnes, which is the most in South America. However, no production of peat for fuel has yet been developed. Brazil produces 65 million tonnes of fuelwood per year. The annual production of charcoal is about 6 million tonnes, which is used in the steel industry. The cogeneration potential of agricultural and livestock residues varies from 4 GW to 47 GW by 2025.

References


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