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Brazil’s unique energy matrix

Santiago Miret, Ph.D. student, materials science & engineering | September 25, 2014

In the near future Brazil will remain South America’s economic engine, as can be seen by the country’s current economic surges. Many of Brazil’s recent economic successes have been closely related to energy developments, as well as the country’s unique energy infrastructure. Brazil has created a unique energy matrix to fulfill its ever-growing energy needs.

This matrix includes a strong presence of renewable sources, particularly sugarcane and hydropower in addition to traditional fossil fuels. In recent years, Brazil has been more reliant on oil imports and domestic oil exploration to provide for the expansion of its energy needs. The country, however, is trying to reduce its dependence on oil by building out and diversifying its renewable energy infrastructure.

A closer look into Brazil’s recent economic growth reveals that oil exploration has contributed greatly to the country’s economic performance. Off-shore oil exploration in Brazil has surged since the discoveries of oil fields in the south of the county, near Santos (São Paulo) and Rio de Janeiro. Brazil has the second largest proven oil reserves in South America, ~13 billion barrels, second only to Venezuela, and is now South America’s largest producer of liquid fuels, with over 2.5 million barrels a day of liquid fuel production, over 2.0 million of which are oil based fuels.

BG-Starts-Production-from-Sapinhoá-Field-Offshore-Brazil

Brazil’s Large Off-Shore Fields Near Sao Paolo – Source: Ingworldnews

Even though oil has been extremely important for Brazil in the recent past, another type of liquid fuel has historically characteristic of the country’s energy infrastructure: the sugarcane. Brazil is the second largest producer of biofuels in the world, after the United States.

Unlike the United States, which uses corn for biofuel production, Brazil uses sugarcane that grows abundantly in the country’s tropical climate. Brazil has developed an unparalleled infrastructure to promote sugarcane based biofuels, and many cars in Brazil are fueled purely on biofuel. Moreover, the minimum mandate for gasoline blends is set at ~25% ethanol, which is among the highest in the world

Brazil’s commitment to using sugarcane as a sizable energy source has led to biofuels accounting for a substantial part of the nation’s energy matrix. In addition to using sugarcane for bioethanol refinement, Brazilians generate bioelectricity from leftover fibers, stalks and leaves. Sugarcane is Brazil largest source of renewable energy, and second only to oil products in the nation’s overarching energy matrix.

Brazil’s 2012 Energy Matrix – Source: Sugarcane.org

When looking at the energy matrix, another renewable energy source stands out: hydroelectricity. In fact, over 80% of Brazil’s electricity is provided by hydropower. Even though Brazil’s hydropower capacity has been increasing steadily, it has not been enough to fuel the country’s growing electricity needs due to larger industry demand and increasing electrification across the country.

Furthermore, high reliance on hydropower makes the power infrastructure very vulnerable to droughts. In early 2014, Brazil went through a noticeable energy crisis, as the rainfall during the country’s driest months (December to March) was significantly lower than expected, causing some of the hydropower plants to operate at lower capacities. This lead to a substantial amount of brownouts during the summer months earlier this year.

In order to mitigate its high reliance on hydropower, and to power its growing economy, Brazil has been integrating more and more fossil fuels into its energy system in the recent past, particularly oil.

Brazil Electricity Sources – Source: EIA

The energy-generation graph above shows how successful Brazil has been in constructing an energy grid that is based on renewable energy. Yet the nation has been relying increasingly on fossil-fuel reliance to maintain economic growth. This has prompted the government to incentivize further renewable energy sources, including wind, solar and small hydro.

The greatest success story of those renewables, whose prizes are governed by an auction policy system, is wind energy. Five years ago, wind power was contracted at R$ 370 (~$165 USD), which was more than 3x the price of conventional hydropower traded at ~R$100. Since then, wind energy prices have almost dropped immensely with recent auction prizes ~R$130, representing an almost 66% drop in prices. R$130 makes wind energy competitive, especially if prizes continue to drop, which would lead wind power to becoming an important component of Brazil’s energy portfolio.

Brazil’s abundance in hydropower and sugarcane based bioenergy has given the country a head start in developing a renewable energy infrastructure. Recent surges in energy demands have yielded a greater reliance on oil-based fuels, yet recent developments in wind and solar power, indicate that renewables across the entire spectrum of energies will play an integral role in Brazil’s energy future.

Cross-posted from BERC Blog, published online by the Berkeley Energy & Resources Exchange, a network of UC Berkeley scholars and industry professionals.

Comments to “Brazil’s unique energy matrix

  1. I Know it’s a bit late. But I’d like to inform that Brazilian generation and transmission of energy are privatized. We even have a continuous eletronic market where companies (transmitters and generators) buy and sell their product to utilities (final consumers) and direct industrial consumers.

  2. Brazil is providing a great example of what we should be aiming for in Europe, but also a learning opportunity how to avoid grid vulnerability. I wonder if energy is privatised in Brazil? I wonder how they are doing in terms of pricing and competitiveness.

  3. Prof. Miret, Dr. David Zilberman, says: “God helps those who help themselves!” How much more a clearer message for our actions in almost everything we do involving self responsibility, consciousness, accountability and carefulness for our proceedings an insight meaning on self-related sense of obligation can be?

    At the United Nations President Obama in his speech about Climate Change said: “The science is undeniable, as are the signs of rising danger all around us.” Obama’s statement contains individual responsibilities to look at, related to those Dr. Zilberman described, and we cannot sit around waiting for others to do what we need to do for ourselves.

    Moreover, Obama laid-out the true facts about the dangerous condition our planet is in, and the critical condition of our ecosystem that tolerates Global Warming, flags the signs of “you’re at your own risk” and this is not the type of tale that you want to think of as an imagining illustration of a non-existing matter. Humans polluted planet Earth and we have a Climate crisis. This is a fact.

    And what Obama is really saying to the world is, snap out of the Trans you’re in, you are living-in-the-story and do your due diligence part. He’s not asking anyone to do the impossible; using vacuum hoses sky-high to clean-up the air. Thus, since we’re here, occupying the space we use, our obligation is to help ourselves by minimizing excessive waste, and by doing so pollution can be reduced.

    Yes, since Industrial Revolution planet Earth has been brought down to its knees over-carrying polluted substance matter in the atmosphere created by humans, and to restore the misaligned global condition back onto a repositioning stance and orderly fashion that ought to be is not an easy task. Alas, is the type of challenge comes with a set of practical requirements. Undo habitual ways of careless outflows, and focus in conservation, waste reduction, self sufficiency and the good news is once waste management is under control, a breath of fresh air is feasible.

    Individual efforts are vigorous and self-gratifying because are spirited dynamic! Waiting on Climate Change news reports and statistic presentations about the seven Billion people occupying the Planet if they’re doing their part, is like waiting on lottery fortunes. Due diligence begins and ends with oneself, and the person who wants to see an Environment free of pollutants.

    Dr. Zilberman’s “God helps those who help themselves” can apply to Brazi’s unique energy matrix, on a different scale, as an individual’s responsibility would have to improve living conditions. Brazil’s distinct location can grant the energy matrix probability in view of the fact that its regional Atlantic Ocean coastline location of about 4,600 miles plays an important role for Renewable Energy developments, since rolling hills around the country create abundant wind-streams for Windmills Installations to provide Green Energy and Off-shore as well.

    And, Brazil’s government can help their country to prosper by adapting to Renewable Energy if they want to. However, creating a presence of Renewable Energy in the eyes of Petrobras, one of the world’s BIG TIME oil producers, who has been providing energy for Brazil for over sixty years, it would be a tough sale to promote, and a hard pill to swallow for Brazil’s oil industry by shifting gears to Cleantech.

    Oil exploration industry has deep roots in diversified investments worldwide, hauling endless tails of related industries providing countless jobs globally for over a century. Brazil, the fifth largest nation in the world, depends on Petrobras.

    What the reports show about Brazil’s Renewable Energy is the icing on the cake, and so, the international community sees some progress for Brazil on Cleantech. The truth of the matter is Petrobras runs Brazil’s Energy.

    Think of it this way, when you say to your guests you are going to cook pasta and you have the water boiling, while you serving another dish on the table for them, your guests are satisfied with the dish you already served. They’ll agree to have pasta another time.

    It will take years and years before the world understands the attributes of Wind and Solar power to convert from oil. I’ll be very happy to get a call from the Brazilian government to install one wind turbine. But I think it would be easier to build a Windfarm in Africa, than trying to install a Windturbine under Petrobras’s nose.

    But, again, help is always available. Ask and you will receive. And if Brazil wants to help their nation and the neighboring countries with Renewable Energy, USA is ready to assist.

    Greetings,
    -YS

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