A sustainable electricity blueprint for Brazil

Brazil, South America's largest country and leading energy consumer, faces the twofold challenge of energy and environmental security. More than 80% of Brazil's installed generating capacity of about 70,000 MW is hydroelectric, generated by the nation's 450 dams [BEN, 2005], which explains why Brazilian power generation is cleaner with regard to local pollutants and greenhouse gas emissions. On the other hand, such hydropower dependency not only has led to significant negative impacts on Brazil's rivers and river-based communities, but also makes the country vulnerable to energy shortages from droughts, which are projected to increase due to climate change.Official estimates suggest that under a business-as-usual (BAU) scenario, Brazil's electricity demand will grow by about 5 % a year over the next 15 years, as energy-intensive industries develop and consumer demand increases, meaning that the country will need to more than double its existing capacity by 2020. At the last auction for new power plants, held in December 2005, Brazil started to increase its consumption of fossil fuels. On that occasion, coal-, oil- and natural gas-fired plants were contracted to supply 70 % of the 3,286 megawatts (MW) of the auctioned electric power.This study presents the view that with more aggressive policies for reducing power waste both at the production and consumption level and promoting new renewable energy, Brazil could cut by 38 % the projected power demand growth by 2020 - equal to a saving of 293 TWh, avoiding 74.6 GW of installed capacity and saving of US$ 15 billion. In turn, this would create up to 8 million new jobs and stabilise Brazil's carbon dioxide (CO2) emissions to 2004 levels by 2020.The major challenge for policy-makers will be in designing and stimulating an effective market and implementation programmes for energy efficiency and renewable energy technologies in order to accomplish such ambitious results presented in the study. Therefore, the study proposes nine broad public policies that are necessary to meet these targets.