Brazil’s acting Minister of Mines and Energy, Nelson
Hübner, said that investments in the Brazilian energy sector are not lacking and
there is enough energy to meet demand through 2008, even if the country grows at
rates superior to 4%, according to analyses by the Ministry itself.
According to Hübner, investments of over US$ 8 billion are planned over the next five years just to complete construction of the 43 hydroelectric plants awarded to the highest bidders by the previous Administration.
“The situation of the electric energy system today is quite comfortable from the perspective of guaranteeing the supply of electric power. The situation was already comfortable last year in terms of installed capacity””despite the critical situation in Northeastern Brazil at the end of last year.
“Today we have an average of around 70% in our reservoirs, including the Northeast region, where there were heavy rains in the area of the São Francisco River,” the Minister affirmed.
There is no real risk of electricity shortages in Brazil between now and the year 2008, says Aloísio Vasconcelos, the Eletrobrás director of Special Projects.
He adds that that is not an optimistic forecast, but a realistic evaluation of the country’s energy situation at the moment.
According to Vasconcelos, there is presently a surplus of 5,000 MW. Forecasts are for consumption to rise by 4,000 MW by the end of 2005, but with investments and a speeding up of environmental impact studies, there shouldn’t be any problems, he says.
Vasconcelos went on to say that the government’s incentive program for alternative energy sources (Proinfa) has added 3,300 MW to the grid.
There is also the fact that with centralized planning it is possible to ensure that supply will rise more than demand, he explains. The idea is to raise supply 50% above growth.
“So, if there is GDP growth of 4%, we intend to increase the availability of electricity by 6%,” he declared.
Vasconcelos called on the Ministry of Environment to speed up impact studies by the Environmental Protection Agency (Ibama) which are holding up work on 23 hydroelectric projects.
“We need more investments, by both domestic and international investors. Eletrobrás is willing to provide models and pay 49% of the necessary investments for new projects,” said Vasconcelos.
Brazil could once again face electricity rationing in 2007 if investments are not made in the sector. According to the Rio de Janeiro Industrial Federation (Firjan), those investments will not come if the government does not establish clear rules this year.
In 1999, Firjan correctly forecast the 2001 rationing period, pointing out its studies at that time revealed that reservoir levels were low and there no were alternative sources of electricity to substitute hydroelectric power plants. The country had to ration electricity for six months in 2001.
Firjan economist, Adilson de Oliveira, says that the new study takes into consideration the government’s own projections of 5% GDP growth over the next two years. That alone will require an additional 4,000 MW of electricity.
Oliveira says a shortfall is in the offing for the second half of 2007 if the sector does not get annual investments totalling US$ 3.5 billion to US$ 4 billion between now and 2007.
Without those investments and if rainfall in 2005/2006 is below average, says Firjan, the shortfall will reach 7% in the Southeast region of Brazil, and 10% in the Northeast.
If there is less rainfall in 2007, the situation will be worse: the shortfall in the Southeast will be 12% and in the Northeast 17%.
Oliveira declared that the minister of Mines and Energy, Dilma Rousseff, has to announce the new regulations for the sector as soon as possible so investors can make their plans. He points out that it takes three years to build a thermoelectric plant and five years for a hydroelectric plant.