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What will Brazil's power strategy be?

Rafael Herzberg's picture
Consultant energy affairs Self employed

Rafael Herzberg- is an independent energy consultant, self-employed (since 2018) based in São Paulo, Brazil* Focus on C level, VPs and upper managers associated to energy related info, analysis...

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  • Sep 20, 2021

What will Brazil's power strategy be?

Two scenarios (and their variants) are worth considering.

1) Brazil maintaining its economic growth in the pattern of the last decades and thus remaining in the platoon of poor countries (GDP per ca-pita) and

2) Reaching the level of the developed ones.

If it is to maintain the current status, our energy policy is OK. Otherwise it will be important to figure out a strategy for making the transition. This is because our per ca-pita electricity consumption is in the order of 2 500 kWh/year. Developed countries consume between three and five times this amount.

To start, how will the country make investments of 1 Trillion Dollars to install the necessary generation, transmission and distribution capacity?

What type of matrix will be made possible by complying with the global requirements for reducing emissions to which Brazil has committed?

We urgently need a strategy. Or will we prefer to remain poor?

Matt Chester's picture
Matt Chester on Sep 20, 2021

To start, how will the country make investments of 1 Trillion Dollars to install the necessary generation, transmission and distribution capacity?

When funds become available, is there a typical allocation process Brazil follows to determine the right regions to receive investment, what projects are the best use of funds, etc.? 

Rafael Herzberg's picture
Rafael Herzberg on Sep 21, 2021

Our tradition in Brazil is focusing on the projected consumption growth which has been very modest. Typically 1,5 times de GDP growth. So if GDP grows 1% a year, power consumption grows 1,5%. 

But if the country is interested in achieving a better standard of living this rationale should be improved, considering higher GDP growth and the associated poower consumption growth.

It seems to me, however, that the ongoing system (which is so for centuries) doesn't care about the pooor people. So there is no drive to change. Most of our population of 200 million is poor. Our GDP per capta is about 1/3 to 1/4 of the developed nations....but who cares?

And now focusing on your question. The political reality tells that the projects that are defined depend primarily on the interestes of the "owners" of the Ministry of Mines and Energy and their friends. An emblematic example. There is this huge stated owned company (Eletrobras) that is supposed to be privatized "soon". Accordingly it is associated to future power projects involving several gas driven power plants where there is no supply in the Amazon area. So gas will have to be shipped using the rivers - it is way more expensive than going for hydro, wind and solar. But of course the local polititians have already "crafted" their solutions which will benefit their groups. It doensn't make any technical/financial sense. It is not by chance that the Brazilian power price (in USD/MWh) is the most expensive amonfg the BRICS (Brazil, Russia, India, China and South Africa).

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Thank Rafael for the Post!
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