Alternative energy: a scenario of successive comings and goings

Wind energy goes up, biodiesel goes down and solar energy is crawling: a long-term policy for power is still missing

Currently, alternative sources of energy are responsible by 14 percent of the Brazilian power matrix. This figure comes from the Empresa de Pesquisa Energética (EPE), a public company of the Ministry of Mines and Energy that is responsible by planning power supply in the country. Alternative sources include Small Hydroelectric Plants (PCH in Portuguese), biomass plants, wind energy farms and solar energy generation units. According to Maurício Tolmasquim, president of EPE, the highest increase in the installed capacity occurred in wind energy, which passed from a current share of 2 percent to 8 percent. of the total of renewable energy, including the generation of large hydroelectric plants. The installed capacity will rise from 83 to 85 percent in 2021.

EPE published recently the results of studies about the power demand in Brazil from 2014 to 2023. The study analyzed market dynamics of  the main industrial areas with high energy consumption—some of them inserted in a logic of global competition—to define the scenario of expansion for each segment. According to the study, the average increase of the total demand of power will be of 4.3 percent along the next decade, going from the current demand of 514 TWh to 781.7 terawatts-hour (TWh) in 2023. These data will support the development of the ten-year Plan of Energy Expansion (PDE) and of the National Plan of Long-term Energy (PNE).

For 2014, EPE foresees an increase of 3.8 percent in the power consumption, highlighting the commercial (increase of 4.4 percent) and residential (increase of 4.1 percent) areas. The percent of growth in 2014 will be higher than that of 2013, when the power consumption increased 3.5 percent, according to former data gathered by the EPE.

This average yearly growth rate for next 10 years is, according to EPE, “aligned with the scenario considered for economy growth during the same period, measured by the variation of the GDP, which is also of 4.3 percent per year.”

EPE believes that the industrial area will show a recovery in relation to last years, “following the economic retaking of the country and the world and reducing the level of idleness of Brazilian installed capacity”.

Still according to EPE, the rate of power consumption that will be presented by the industry will increase 3.4 percent during this year, much above the 0.6 percent of the last year.

In ten-year projections carried out by the study, commercial and residential areas will continue to lead the increase of consumption with growth rates of 5.5 and 4.3 percent per year. Power consumption of the industry between 2014 and 2023 will maintain a rate of 3.4 percent per year.

The share of power consumption in the commercial area will also be significant, increasing from 18 percent in 2013 to 21 percent in 2023, while industry will reduce its share from 40 to 37 percent, even continuing to be the main area of power consumption in the country.

Ethanol is going down

Considered the “segment of the hour” in the scenario of alternative power generation—putting aside several projects of PCHs that never came out of the paper—wind energy projects in Brazil had a significant increase in the last three years. Part of that is due mainly to a technologic revolution that made the equipment involved cheaper than before.

The highest competitiveness attracted investments of approximately R$ 40 billion in projects that may start to operate until 2020. Starting from a current installed capacity of 2.8 Gigawatts (GW) of wind power, it is expected to have 8.2 GW until 2016, according to EPE, which may be compared to, for example, 9 GW from sugar cane biomass.

Biomass participation in the power matrix will probably fall from the current 8 percent to 7 percent in 2021, according to EPE. This situation of wind energy is due to a price reduction of more than 60 percent since 2005. Biomass did not found a mechanism to reduce its cost, what reduced its competitiveness.

For Zilmar de Souza, bioelectricity manager of the Union of Sugar Cane Industry (Unica), the competitiveness of the biomass is attached to the development of new projects of ethanol plants, the so-called greenfields. "But since there are no projects, the cost of biomass energy reflects the cost of transforming old plants for power generation, what is more expensive", says him. The federal government is already considering that the national production of ethanol may not be enough to attend the needs imposed by the increase in gasoline consumption during the next years.

Trying to minimize the problem, the federal government is finishing the development of financing programs to stimulate a renewal of cane plantations and to recover 150 million tons of sugar cane.

The ministries of Agriculture and Mines and Energy estimate that the current harvest will have a reduction of 30 percent in cane milling.

Biodiesel is going up

If the availability of ethanol is considered not enough to attend the demand, biodiesel—other fuel of the energy matrix—market is “completely supplied” according to government’s evaluation. National production of biodiesel had again a positive performance in 2013, when approximately 2.8 billion liters were produced. This volume is 3 percent above that of 2012, when 2.7 billion liters were delivered. The estimations came from the Brazilian Association of Vegetal Oil Industries (Abiove).

The production of biodiesel is increasing as the consumption of diesel increases. The consumption of diesel B oil by all our truck and bus fleet is estimated to reach 60 billion liters. In this case, biodiesel production has to reach 2.8 billion liters. According to the Act 11.097/2005, it is mandatory to mix 5 percent of biodiesel to the diesel B.

Since 96 percent of biodiesel  are purchased through public auctions of the National Agency of Oil, Natural Gas and Biofuels (ANP), the increase of production follows “strictly” the production of diesel fuel.

The huge crop also collaborated to ensure a large amount of raw materials at lower prices to attend the demand. At the end of July 2013, the price of soy oil delivered in Sao Paulo reached the lowest value since October, 2010, according to the Center of Advanced Studies in Applied Research (Cepea) of the Esalq/USP.

Currently, soy oil is responsible by 74 percent of the production of biodiesel and would be able to supply the entire demand for this year.

Sun, a wasted potential

Currently, solar energy does not appear separately in the estimations of EPE. But the experts consider that this kind of generation has a tremendous potential of growth at long term, when the cost of photovoltaic panels will be cheaper and houses will pick up this energy for their own use, put the generated excess back in the network and have a discount in their monthly bill.

Sunbeams are not a problem for Brazil. Some cities of the Northeast, such as Petrolina (PE), Floriano (PI) and Bom Jesus da Lapa (BA), receive an amount of solar radiation comparable to Dongola, in Sudan, recognized as the point of the planet where the sun reflects with the highest power. But energy experts say that we have neglected this huge potential of the sun as a direct source of power. Current production of solar energy is estimated in 20 million megawatts-hour per year, enough to supply only fifteen thousand two-bedroom houses.

The high cost of production and the lack of incentive policies of the government are some of the factors that delayed the increase of this kind of generation among us. In comparison with other sources—such as wind and hydroelectric—solar energy is three times more expensive.

Improvements happen, although very slowly. Scentists of the Federal University of de Pernambuco are working in the development of a unique solar panel, able to generate twice power with the same quantity of collectors of a conventional equipment. This panel may supply electric power to 16 houses at the same time, what was formerly possible only with individual panels.

Engineers of the PUC in Rio de Janeiro are already testing a solar refrigerator that produces 5 kg of ice per day. This appliance may be useful in fishermen villages or in isolated health units, for vaccine conservation.

This is being a space where solar energy has reached a significant growth: that of cogeneration and individual production for house application. A study issued by EPE pointed that the cost of generation from a small-power equipment in Brazilian habitations is of R$ 602 per megawatt-hour (MWh), cheaper than the power sold by ten of the more than 60 power distributors of the country.