ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
The liberalization of the Brazilian electricity system and its effects on the environment
Ivan Dionysio Aronne – [email protected] Maria Feliciano Jacomino – [email protected]
Comissão Nacional de Energia Nuclear - CNEN
Centro de Desenvolvimento da Tecnologia Nuclear - CDTNBelo Horizonte, MG
Brazil
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
The Electricity Generation in Brazil
Option for the Hydro
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
The Electricity Generation in Brazil
Hydro Electric Capacity Installed in Brazil
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
The Electricity Generation in Brazil
Hydro Electric Potential in Brazil
1999 2004 2009
For considerable part of the projects the cost of electricity is cheaper than those of other options.
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
The Electricity Generation in Brazil
Hydro Electric Potential in Brazil
For considerable part of the projects the cost of electricity is cheaper than those of other options.
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
The Electricity Generation in Brazil
The Hydro and the Electric Systems
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
The Electricity Generation in Brazil
The Hydro ConditionsThe system was planned to go through 5 dry years
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
The Electricity Generation in Brazil
335.580,70 21.007,30
59.627,60 6.129,50
If we consider just the interconnected system this effect is even more explicit.
The share of energy generated by the thermal PP is lower than their capacity share.
Thermal Power has played a complementary role.
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
The Electricity Sector Organization before Liberalization
MINES AND ENERGY MINISTRY: formulated the national energetic polices
NATIONAL DEPARTMENT OF WATER AND ELECTRIC POWER (DNAEE): acted as regulator of the sectorial activities
ELETROBRÁS-Centrais Elétricas Brasileiras S.A: a Federal Holding company. It was responsible for the execution of the electric energy government policies
ELETROBRÁS, as holding of federal companies and utilities, actuated together with state companies through several committees and polices
-Manual of studies of environmental effects of the electric systems
-Plan for protection and improvement of the environment in the works and services of the electric sector (i PDMA):
-Advisory committee of environment of ELETROBRÁS (CCMA):
-Coordinating committee environment activities of the electric sector (COMASE)
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
The Electricity Sector Organization before Liberalization
BUNDLED SYSTEM (Generation – Transmission - Distribution)
ELETROBRÁS AS HOLDING OF FEDERAL COMPANIES AND UTILITIES ACTUATED TOGETHER WITH STATE
COMPANIESIN
PLANNINGFINANCING
CONSTRUCTIONOPERATION
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
The Electricity Sector Organization before Liberalization
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
The Liberalization
This restructuring was undertaken with the following objectives:
• to increase the competition;
• to guarantee the efficiency of the system;
• to motivate new investments, above all private;
• to assure the improvement of the quality of the services;
• to provide fairer prices to the consumer;
• to implement the diversification of the electricity generating matrix,
as well as,
· to privatize the generating (15%) and distributing companies of
electricity (75%);
· to reduce the State participation in the electricity market, and
· to produce a cash flow for the government.
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
The Liberalization
- Dismembering large and bundled state power companies;- Privatization of the electric power sector;-The introduction of a competitive market;-The introduction of large-scale thermal generation into a
hydro-dominated matrix;-Incentives for cogeneration programs, small hydro stations,
distributed generation and alternative energy;-The gradual opening of the gas and petroleum sectors to
competition;
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
The Electricity Sector Organization after Liberalization
COUNCIL & SENATE
STATESTATEAGENCIESAGENCIES
MMAMMACONAMACONAMA
PROCONSPROCONS((ConsumersConsumers
Protection BodyProtection Body))
CONSUMERSCONSUMERSBOARDBOARD
SDESDECADE - SEAECADE - SEAE
PRESIDENCYPRESIDENCY
ConsumersConsumers
CNPE/MMECNPE/MME SEN - MMESEN - MME
ANEELANEELANPANP
GG
MAE ONS
BNDES PLANNING AGENT P&D
TT
DD
CC
Electric Sector - Institucional Structure
Policy
Regulation &Fiscalization
Market
InstitutionalAgents
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
The Environmental Legislation in Brazil
Attention, Alert and Emergency Pollutants Concentration Levels POLLUTANTS CONCENTRATION LEVELS, g/m3 ATTENTIVE ALERT EMERGENCY Sulfur Dioxide (SO2) - 24h average 800 1,600 2,100 Total Suspended Particulates (TSP) - 24h average 375 625 875 SO2 x TSP (both in g/m3) - 24h average (65,000) (261,000) (393,000) Carbon Monoxide (CO) - 8h average 17,000* 34,000** 46,000*** Ozone - 1h average 400 800 1,000 Inhalable Particulates (PM-10) - 24h average 250 420 500 Smog - 24h average 250 420 500 Nitrogen Dioxide (NO2) - 1h average 1,130 2,260 3,000
*15 ppm; ** 30 ppm; *** 40 ppm. Source: Resolução CONAMA No. 003, 28.06.90.
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
The Environmental Legislation in Brazil
AREAS TOTAL PARTICULATE
CALORIMETRIC DENSITY,
%
SULFUR DIOXIDE
g/106 kcal
g/kWh g/106 kcal
g/kWh
Areas Class II and Class III
120 for fuel oil800 for mineral
coal
0.103 for fuel oil0.69 for mineral coal
max. 20 2,000 1.72
Areas Class I Installation of new stationary sources of this size not allowed
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
Environmental Impacts of Fossil PP in Brazil
EXTERNALITIES FROM A GAS PLANT
0,00
0,02
0,04
0,06
0,08
0,10
0,12
0,14
0,16
Cuiabá
PLANT
US
ce
nts
/kW
h
mortality ppp Brazil
morbidity ppp Brazil
Crops
EXTERNALITIES FROM FUEL OIL PLANTS
-5
0
5
10
15
20
25
Ale
gret
e
Cam
pos
Car
ioba
Igar
apé
Nut
epa
Pira
tinin
ga
San
ta C
ruz
São
Ger
aldo
PLANTS
US
ce
nts
/kW
h
mortality ppp Brazil
morbidity ppp Brazil
Crops
EXTERNALITIES FROM COAL PLANTS
0
1
2
3
4
5
6
7
8
P.M
édic
i
Cha
rque
adas
Figu
eira
Jorg
e La
cerd
a
São
Jer
ônim
o
PLANTS
US
ce
nts
/kW
h
mortality ppp Brazil
morbidity ppp Brazil
Crops
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
Status and Immediate Consequences of Liberalization in Brazil
Privatization: 15% of Generators and 75% of Distribution
Organizations already defined but regulamentation still needs improvements and changes
Investors have spent most financial resources in privatization instead of in expansion
This evolution associated with a drought lead to a electricity supply crises where it was established a goal of 20% reduction in the consumption.
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
Status and Immediate Consequences of Liberalization in Brazil
Scenarios for Rationing Constraint Levels in Regions SE e NE Impacts Units 5.0% 10.0% 15.0% 20.0% 25.0%
Billions R$ -3.65 -7.30 -10.95 -14.60 -18.25
% related to previous
scenario (*)
-0.4 -0.7 -1.1 -1.5 -1.9 GDP
% 3.1 2.8 2.4 2.0 1.6 Jobs Thousand
Positions -214 -428 -642 -856 -1071
Productivity % -0.4 -0.8 -1.1 -1.5 -1.9 Costs % 0.4 0.8 1.1 1.5 1.9
Commercial Balance
Billions US$ -0.4 -0.8 -1.2 -1.6 -2.0
Billions R$ -1.6 -3.3 -4.9 -6.6 -8.2 TAX
% -1.1 -2.3 -3.4 -4.5 -5.7 Billions R$ -0.8 -1.0 -1.6 -2.1 -2.6
GOODS TAX % -1.0 -1.3 -1.9 -2.5 -3.2
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
Liberalization and Environment in Brazil
The liberalization of the electricity sector was not accompanied by big changes in the related environmental polices and legislation, except by the new regulation concerning the use of water, which introduced the following main ideas impacting the hydroelectricity generation:
payer-polluter, watershed management with local committees, pay for the use of the water.
COGENERATION
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
Liberalization and Environment in Brazil
1. ECONOMY X FINANCE: The private investor is risk averse,. The immediate consequence of this change is that the hydro and nuclear projects are not competitive with the gas option under this criterion. In relation to the environment the impacts will change their nature from a no significant atmospheric emission scenario to one with Greenhouse gases (CO2 and CH4) and NOxx emissions.
2. STATE X PRIVATE COMPANIES: The former agents of the electricity system were government companies which were subjected to the political and social pressures leading to a higher commitment with the social environment issues, going in some cases beyond the raw limits of the legislation. On the other hand the private companies are committed with the profitability to the shareholders and limit their actions in the environment protection to attend the legislation.
ELECTRICITY LIBERALIZATION IN BRAZIL & ENVIRONMENT GRENELEM PROJECT - WP 1 Santiago de Chile, 10-11th September 2001
Liberalization and Environment in Brazil
Brazil is moving from
a green electricity country to an
atmospheric pollutant electricity one