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José Carlos de Miranda FariasDirector for Electricity Studies of Energy Research Enterprise - EPE

Ministry of Mines and Energy - MME / Brazil

Ministério de

Minas e Energia

NOVÁ ENERGETIKÁ STRATEGIEEU A CR

Brazilská Energetická Politika a Ekologie

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2006 Domestic Energy Supply Structure

Brazilian Energy Sector

1,6%

9,6%6,0%

14,8%

30,1%37,8%

Oil and by-productsBiomass

Hydraulic andElectricity

UraniumCoal Natural Gas

Renewables: 44,9 %

Total: 230 millions of toe

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Total Greenhouse Gas Emissions

Brazilian Energy Sector

2,372,36

1,57

0,0

0,5

1,0

1,5

2,0

2,5

Mundo OECD Brasil

ton.

CO

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tep

BrazilOECD CountriesWorld

ton

C

O2 /

toe

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BRAZILIAN ENERGY POLICY

Law 9.478/97 (art. 1º)

Targets

• Protect consumers’ interests in relation to access, prices, quality,

security, and product offers

• Protect the environment and promote energy efficiency

• Use renewable energy sources, by means of economic exploitation

of available insumes and applied technologies

• Promote free competition

• Attract investments and enlarge the competitiveness in the country

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João Pessoa

Jacui

Porto Alegre

Florianópolis

Curitiba

São Paulo

Rio de Janeiro

Paraíbado Sul

Uruguai

Vitória

BeloHorizonte

Itaipu

Grande

Paranaíba

Paraná/Tietê

Campo Grande

Iguaçu

Tocantins

Belém

São Francisco

Parnaíba

São Luís

Teresina

Fortaleza

Natal

Recife

Maceió

Aracajú

SalvadorCuiabá

Goiânia

Brasília

Paranapanema

Argentina

Installed Cap. = 98,530 MW• Hydroelectric = 73,559 MW – 74.7 %• Thermal = 22,964 MW – 23.4 %• Nuclear = 2,007 MW – 1.9%

Consumption Units = 57,45 million (Energy Production = 418,2 TWh/y (55% of South America) Peak Load = 61,780 MW

(United Kingdom or Italy)

Source: EPE 2007

Generation: 85% Public owned 15 % Private owned Transmission: 43 utilities (80% private) Distribution: 64 utilities (80% private)

Electrical System General Characteristics

Surface area: 8.5 million km²(= continental USA + 1/2 Alaska)

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Brazilian Power Grid Operation

Hydroplants

Termoplants

TransmissionLines

Imp/E

xp

INTEGRATED AND INTEGRATED AND COORDINATED OPERATIONCOORDINATED OPERATION

CemigFurnasAES-TietêCESPCDSA

Camargos

Grande River

Igarapava

V.Grande

São SimãoItumbiara

Corumbá I

Emborcação

Paranaíba River

Itutinga

Funil Grande

Furnas

M.Moraes

L.C.Barreto

Jaguara

P. Colômbia

Marimbondo

Água Vermelha

C. Dourada

Nova Ponte

I. Solteira

Jupiá

P.Primavera

Itaipu

Miranda DIFFERENT GENCOs

RUN OF RIVER

RESERVOIR

CemigFurnasAES-TietêCESPCDSA

Camargos

Grande River

Igarapava

V.Grande

São SimãoItumbiara

Corumbá I

Emborcação

Paranaíba River

Itutinga

Funil Grande

Furnas

M.Moraes

L.C.Barreto

Jaguara

P. Colômbia

Marimbondo

Água Vermelha

C. Dourada

Nova Ponte

I. Solteira

Jupiá

P.Primavera

Itaipu

Miranda DIFFERENT GENCOs

RUN OF RIVER

RESERVOIR

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Méx

ico

Bra

sil

Arg

enti

na

Ch

ile

Cro

ácia

Po

rtu

gal

Gré

cia

Ru

ssia

Esp

anh

a

Uru

gu

ai

1.500

2.500

3.500

4.500

5.500

6.500

7.500

8.500

9.500

Date - 2004. Data Source: IEA, 2006

kW

h/h

ab

Year kWh / hab

1980 941

1990 1.449

2000 1.830

2004 1.909

Per Capita Power Consumption

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National Power Grid

Stand-alone

Systems

National Interconnected

System

4,000 km

Existing System

LT 230 kV : 36.104 km LT 345 kV : 8.973 km

LT 440 kV : 6.791 km

LT 500 kV : 29.222 km

LT 600 kV : 1.612 km

LT 750 kV : 2.698 km

Source: EPE (2007)

Total : 85.400 km

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4.000 km4.000 km4.000 km4.000 km

National Power Grid

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2006 Domestic Electricity Supply Structure

Source: Brazilian Energy Balance, EPE, 2007

(*) mainly generation from bagasse-based cogeneration

Biomass and other renewables (*)

Oil and by-products

Importation

Coal

Natural Gas

Hydraulic

4.2%

8.8%

2.5%1.6%

4.0%

Nuclear3.0%

Hydraulic75.9%

Total: 460 TWh

Brazilian Energy Sector

Renewables: 80,1%

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1. Based on World Energy Council - 1992. 2. Brazil - 2002.3. Those countries have 2/3 of the developed world hydro-power resources

World Hydro-Power Resources

Source: EPE 2006

% of the thecnical hydro resources*

100

83

64

61

60

55

45

37

21

18

16

11

6

4

1

26

0 20 40 60 80 100

France

Germany

Japan

Norway

USA

Sweden

Italy

Canada

Brazil

India

Colombia

China

Russia

Peru

Indonésia

Congo

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Mapa ilustrativoFonte: MMA (fev/05)

Reflexões sobre a Expansão Hidroelétrica

environmentsOcupação da Amazônia

16%

25%

Unidade de ConservaçãoFederal

Terras Indígenas

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16,00%

0,25%

25,00%59,00%

UC

Usinas existentes (0,22%) eplanejadas (0,03%)

Terras Indígenas

Outros

Bioma Amazônico – Áreas Ocupadas

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Brazilian Power Sources

Power Source Potential

(MW)

Hydropower 180.000 *

Biomass 9.000

Wind Power 140.000

Small Hydro 14.000

Nuclear 20.000

Coal 28.000

Imported Coal -

Imported Natural Gas - Fuel Oil -

* Remaining Potential

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Establishes the obligation for power distribution utilities to fully meet their forecasted loads by means of purchasing power either from public power auctions or from Distributed Generators.

The Present Law

Law 10848/2004

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• All consumers must be 100% covered by energy contracts

• All contracts must be backed up by physical production capacity (security of supply)

• Consumers above 3 MW are free to sign bilateral energy contracts with generators

Highlights of the Model

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Power Purchase Agreement from New Plants Law 10.848/2002

AA-1A-2A-3A-4A-5

Purchase in “A-3”

Auctions of “A-5” and “A-3”PPA with a term of 15 to 35 years

Hydro Plant Paulo Afonso/Bahia

Purchase in “A-5”

limited to 2% of the load from “A-5”

Power Auctions

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Power Auctions PPA

João Pessoa

Porto Alegre

Florianópolis

Curitiba

São Paulo

Rio de Janeiro

Vitória

BeloHorizonte

Campo Grande

Belém

São Luís

Teresina

Fortaleza

Natal

Recife

MaceióAracajú

SalvadorCuiabá

Goiânia

Brasília

BILATERAL CONTRACTS

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Art.20: The power auction proclamation shall be prepared …, taking into account the MME directives, and shall contain:

     

a) - the Environmental Assessment Report (EIA) and the Environmental Impact Analysis Report (RIMA) ;

        b) - the Environmental Advance License (LP).

Decree 5.163/2004

Environmental Requirements

Power Auctions

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Power Auctions – Main Results

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Primary Energy Source Number of UnitsAvailable Power for

Auction(MW)

Hydro Plants 9 2.796Small Hydro Plants 29 481Biomass 54 1.875Natural Gas 6 3.542Natural Gas/Diesel 5 2.161Process Gas 1 25Natural Gasoline 1 180Coal 1 350Fuel Oil 61 7.041Diesel 5 754Wind Power 13 1.170

TOTAIS 185 20.375

Hidro 38 3.277,00

Térmica 134 15.928,00

Eólica 13 1.170,00

Number 2007 A-3

21%

72%

7%

Power 2007 A-3

16%

78%

6%

2007 A-3 Auction - Applicants

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1532 Martim Afonso de Souzaintroduces sugarcane in Brazil

1925 First ethanol vehicle tested in Brazil

1975 Created the Brazilian Ethanol Program

Sugarcane and ethanol in Brazil

PROALCOOL

The Brazilian Energy Sector

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Stages of Brazilian Ethanol Program

The Brazilian Energy Sector

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Current phase

Crude oil international prices higher Flex fuel vehicles

first flex fuel vehicles in 2003currently, flex fuel represent 75% of cars

selling Electricity from bagasse-based cogeneration

became competitive New technological advances in progress

in order to increase productivity and ethanol production

Current Brazilian alcohol production: 17.8 billions liters

Current Brazilian sugar production: 30.9 millions ton

Stages of Brazilian Ethanol Program

2006

The Brazilian Energy Sector

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SUGARCANE Bagasse

Straw

Sugar

Vinasse

Cogeneration

Paper & celluloseFood for animals

Ethanol

ElectricitySteam

Fertilizer

Biodigestion

Food for animals

Biogas (boilers)

Methane (vehicles)

CogenerationElectricity

Steam

Ethanol Vehicles

Vehicles

Food industry

Sugarcane and by-products can provide bothcleaner fuel and electricity

Why biomass from sugarcane is an effective alternative

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Favorable geographic andnatural conditions

land quantity available toagriculture

soil characteristics privileged climate conditions

(sun, rain and etc.)

Brazil has a great potential to bioenergy (biofuel and bioelectricity)

Profile of Brazilian sugarcane sector

Technology developed Ethanol biodiesel cogeneration from bagasse other uses

Low production cost

Ethanol ProductionCost (US$/liter)

Country/Region

0.22-0.28Brazil

0.45-0.55European Union

0.30-0.35United States

Sources: Henniges, O.;Zeddies, J.: Fuel Ethanol Production in the USA and Germany – a cost comparison,F.O. Lichts World Ethanol and Biofuels Report, vol 1, nº 11, 11/02/2003.

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Source : VCP apud Silvestrin, 2005 in reuniões temáticas na EPE

CountryHarvest(years)

Produtictivity(m3/ha/year)

BRASIL 7 45-50

INDONÉSIA 7 20-25

AUSTRÁLIA 7 20-25

ARGENTINA 7-12 25

CHILE 10-12 25

ESPANHA 12-15 10-12

EUA 25 10

SUIÇA 35-40 5,5

FINLÂNDIA 35-40 4

CANADÁ 4,5 7

p < 66 < p < 12

12 < p < 30

p > 30

Productivity(m3/ha/year)

Brazil has a great potential to bioenergy (biofuel and bioelectricity)

Profile of Brazilian sugarcane sector

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Law n º 11,097/05 Set the mandatory blending of biodiesel with mineral diesel and regulate the insertion of the new fuel in the market.

2005to

2007

Authorized

Potencial Market840 millions

liters/year

2%

2008to

2012

Mandatory

Firm Market1 billion

liters/year

2%

2013 Forward(Government may

bring the aim forward to 2010)

Mandatory

Firm Market2.4 billionliters/year

5%

The Brazilian Biodiesel Production and Use Program

Stages of Brazilian Biodiesel Program

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The Brazilian Biodiesel Production and Use Program

Production Capacity Authorized is higher than mandatory demand expected to 2008

source: ANP , 2007

July 2007(Authorized)

Total(Authorized Plus Authorizations

Submitted)

1.62 2.68

Production Capacity

billion liters/year

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National Petroleum, Gas and Biofuels Agency (ANP) Auctions

Source: MME e ANP , 2006

Five Biodiesel Auctions

855802806854875Medium Sale Price (US$/m3)

455505017070Volume Sold (m3)

-1,145.125.4315.592.5Volume Offered(106 liters)

-256128Total Units

5° 14/022007

4º 11/072006

3º11/072006

2º30/032006

1º23/112005

Total 885 million liters2007&2008 – Two New Auctions

more 150 million liters

The Brazilian Biodiesel Production and Use Program

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Brazilian Challenger

To supply energy, at fair prices,to develop the country,

following the principles of sustainable growth.

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Empresa de Pesquisa Energética - EPEAv. Rio Branco, 1 - 11º floor Centro Rio de Janeiro RJ

CEP 20090-003 Tel.: +55 (21) 3512-3100 www.epe.gov.br miranda.farias@epe.gov.br

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