HYDROELECTRIC POWER OPTION IN BRAZIL
THE HYDROELECTRIC POWER OPTION IN BRAZIL ENVIRONMENTAL, TECHNOLOGICAL AND ECONOMIC ASPECTS
VENTURA FILHO, Altino ITAIPU Binacional Foz do Iguaçu, Brazil
1. Introduction
This paper deals with an evaluation of Brazil's option in favor of hydroelectric power as its primary source of electric power generation.
Aspects concerning the environment, as well as technological and economic considerations in regard to the use of hydroelectric power in Brazil are commented, stressing the importance of the transmission system for the integration and the optimization of hydroelectric generation.
Reference is made to Brazil's strategy for expanding its generating system at medium term, up to the year 2015, listing the various primary sources for the generation of electric power and explaining why priority is given to continued use of the country's hydroelectric potential.
2. Electric power supply and hydroelectric power
Hydroelectric power is an important and widely used primary source for the generation of electric power. Figure 1 shows the share of each of the several primary sources in world terms and in Brazil.
Coal is the most important source used for the generation of electricity, amounting to 40% of the world total. The cost of the energy generated by means of current technology is competitive, even taking into account fuel transportation costs. The relative abundance of coal indicates that its price on the international market will remain stable. Technological evolution will be necessary, especially regarding control of emissions into the environment, and this may result in a rise of approximately 25% in investment costs. The use of mineral coal for large scale electric power generation, at medium and long term, depends basically on its economical and environmental competitiveness, when compared to the other thermal options, mainly nuclear power and natural gas.
Hydroelectric power, worldwide the second largest primary source used for electricity generation, amounts to 19% of the total production of electricity. Its use evolved in industrialized countries that took advantage of the economically and environmentally feasible portion of their total hydroelectric potential, which corresponds to a percentage between 60 and 80%. No major hydroelectric program is foreseen for these countries. Future hydroelectric expansion is more likely to occur in developing countries, where most of the hydroelectric potential is still available. Restrictions to such expansion will be related to environmental aspects of hydroelectric plants and to the limited funds available for investment in these projects, considering the large amounts necessary to meet the growing evolution of the electric systems in these countries.
Nuclear power, the third largest source used for electric power generation (17% of the total) gained in importance in the 60s and 70s. As from the 80s, programs for the installation of new units were scaled down, especially in the United States and Europe. This option has the environmental advantage of not contributing to global climatic changes, such as the greenhouse effect. Large scale nuclear generation expansion depends on public acceptance, its competitiveness with other thermal options, and upon environmental restrictions, that may be placed on conventional thermal generation sources, such as a CO2 emission tax.
Natural gas fired generation is responsible for 13% of the worldwide electricity production, and is expected to grow rapidly in the future, due to the technological progress achieved over the last decades, especially in the yield of the thermal energy/electricity conversion process in combined cycle plants, and to the fact that investment costs have been drastically reduced. Natural gas, when available, is a competitive low-cost option for electric power generation and may be implemented at short term. It is also considered the best conventional alternative for thermal power from an environmental point of view. It can, furthermore, be implemented in different modules and sizes, in cogeneration processes at consumer-end level, thereby acquiring greater energy efficiency.
The use of oil by-products for power generation is more likely to remain restricted to special situations due to the possibility of more relevant uses for this fuel, and also for strategic reasons. No large-scale worldwide programs for oil by-products fired plants are foreseen.
3. Brazil's economy and energy
Brazil is a vast country - 8.5 million square kilometers - the fifth largest in the world. Distances between its extreme boundaries - north to south, east to west - span more than 4,000 km. Its Atlantic Ocean shore extends over 7,000 km, whereas its territorial borders measure approximately 16,000 km, touching all South American countries, except Chile and Ecuador, as shown in Figure 1. Brazil's huge dimensions favor the use of the country's hydroelectric potential, due to its high energy value, as will be seen in this paper.
It is estimated that the country's population will reach 167 million inhabitants by the year 2000 (demographic density of 19.6 inhabitants/km2), with an annual growth rate of 1.2% - an increase of 2 million inhabitants per year. These figures make Brazil the fifth most populated country in the world. [1]
Brazil's Gross Domestic Product grew over the period 1970/2000 at a higher rate than its population, despite the recessive 80s. Over the period 1970/2000, the GDP rose from US$ 240 billion, to approximately US$ 850 billion (exchange rate of 1995), a yearly growth rate of 4.3%, resulting in an annual income elevation from 2,580 to 5,090 US$/inhabitant-year, over the last thirty years. Table 1 shows a breakdown of the GDP by primary, secondary and tertiary sectors for the years 1970 and 2000, and the country's urbanization level, which are important aspects affecting the overall energy growth, including electric power.
The Energy Sector took large strides forward during the period 1970/2000, due to Brazil's economic expansion, industrialization and growing urbanization. During these thirty years, the Energy Consumption x Gross Domestic Product elasticity stood at about 1.25. Table II provides a breakdown of national energy consumption by main energy types for the years 1970 and 2000. As can be seen, a major structural change occurred over these thirty years. Electricity (renewable source-hydro) shot up from 19 to 41%, the use of firewood, charcoal and sugar-cane bagasse dropped significantly (from 40 to 20%), and oil by-products use declined from 38 to 32%. Presently, renewable energy amounts to 2/3 of the total.
This large share borne by electricity is a result of its 7,1% average annual growth rate in the 1970/2000 period (from 40 TWh to 315 TWh, electric energy consumption). This rate is to be compared to the rates of growth for the economy (4.3%), the population (2.0%) and energy consumption from all sources (5.4%). The Electric Power Consumption x Gross Domestic Product elasticity in Brazil will probably reach 1.65 during the 1970/2000 period. The electricity content of the GDP is expected to rise from 0.167 in the year 1970, to 0.371 kWh/US$ of the GDP, in 2000, whereas the annual per capita electric power consumption is estimated to rise from 430 to 1,886 kWh/inhabitant-year, during this period. As the per-capita consumption figure, for the year 2000, is well below the average value for industrialized countries, it can be inferred that there is a large middle and long term (15 to 20 years) growth potential for the Brazilian electric power market.
4. Hydroelectric power in Brazil
4.1 - General remarks
Figure I shows the distribution of primary sources for electric power generation in Brazil. Hydroelectric power stands out, with 96,8% of the total. Thermal generation comprises oil by-products (1.3%), mineral coal (1.2%) and nuclear power (0.7%). Oil-fired generation is usually restricted to isolated systems in the northern part of the country, in the Amazon Region. But, occasionally, if the hydrological situation is unfavorable or there is need for peak supply, oil by-products are used for thermal generation in the National Interconnected System. Coal-fired generation is restricted to Brazil's Southern Region, and it aims at making use of this regionally available primary energy source in order to develop the technology which will be needed for medium-term generation expansion. Presently, nuclear power is generated only at Angra I plant (657 MW). In 1999, the Angra II plant (1309 MW) will be in operation.
The significant predominance of hydroelectric power, the geographical dimension of the national interconnected electrical system, the size of its market, as well as the large number of hydroelectric plants located at great distances from each other, and possessing different hydrological regimes, place Brazil in a unique worldwide situation. Two important aspects are noteworthy: one refers to hydroelectric generation itself and the other to the role of the transmission system.
In the first case, the amount of energy generation depends directly on the natural flow of rivers and the storage capacity of reservoirs. A historical analysis of the natural flows available, dating back to 1931, shows that, in general, hydrological conditions are favorable. Isolated years of low water supply were rare. Consecutive years of draught with a flow significantly lower than average were even rarer. Within a specific year, hydrology is markedly seasonal. There occur periods of strong flow - floods - at the start of the year in the main hydrographical basins.
As a result of these hydrological characteristics and the possibility of installing reservoirs for storing large volumes of water at a low cost, Brazil's hydroelectric system can regulate pluri-annual stocks for a period of about 5 years. Such regulating capacity and the electrical interconnections among hydrographical basins require a continuous time-dependent evaluation of the supply system with regard to energy generation (as opposed to thermal systems), as this generation in one particular year is conditioned by the previous hydrological behavior and its expected evolution in the following years.
The role played by the transmission in a hydroelectric system, such as the Brazilian, is of major importance. Aside from transporting the energy generated to the consumption centers, which is the basic function of transmission in thermal systems, it also permits the optimization of the hydro generation. This optimization increases the overall energy production by transferring the surplus energy surplus available in some plants to other hydrographical basins or geographical regions with unfavorable hydrological conditions. The optimized operation of the Brazilian hydroelectric system results in an increase of about 30% in energy generation, when compared to the production that would be obtained through the individual operation of the plants, without the coordination of a centralized dispatch. This, in Brazil, gives rise to a significant cost reduction for hydroelectric power generation. This distinctive characteristic of the transmission system is recognized by the legal framework of the Electric Sector, which differentiates it from transmission systems that are connected to plants and to the distribution segment.
In the Brazilian electric power system, the market supply criterion is based upon meeting average energy requirements, attributing a lower priority to peak supply. This philosophy opposes that adopted for thermal systems, which emphasizes peak demand supply. The Brazilian system adopts a criterion based on the supply of guaranteed energy with a certain deficit risk. Currently the maximum annual deficit risk considered for expanding the electric power generation in order to meet the energy requirements is 5%.
4.2 - Brazil's electrical system in the year 2000
Brazil's electrical system configuration for the year 2000, takes into account the energy supply to two different geographical areas. One is covered by the National Interconnected System, extending for 6.0 million km2, corresponding to 70% of Brazil's territory and to 98% of the country's electric power consumption. The second area comprises the nearly 400 isolated systems, mainly located in the northern region, covering 2.5 million km2, and corresponding to the remaining 2% of the total electrical power consumption.
Figure 2 shows these systems, highlighting the National Interconnected System and the interconnections among the different geographical regions of the country - north/northeast, north/south and south/southeast.
The National Interconnected System integrates a significant number of hydroelectric plants of various sizes that are often situated at great distances from each other and have, in some cases, different hydrological regimes. Therefore, plants as widely apart - about 3,000 km - as Tucuruí (8,325 MW) located on the Tocantins River, in the northern region, and Itá (1,450 MW) on the Uruguai River, in the southern region, are inter-dependent due to the different hydrological regimes, and require a coordinated operation. Table III shows Brazil's installed capacity in hydroelectric and thermal terms, for the year 2000; Table IV highlights the main characteristics of hydroelectric plants over 1,000 MW.
4.3 - Hydroelectric power generation in Brazil
Brazil's option for hydroelectric power is based on the following reasons:
Availability of Hydroelectric Resources: Brazil has a hydroelectric potential of 260 GW that can generate 1,270 TWh/year, and ranks 3rd in the world. By the year 2000, only 30% of this potential will have been used or will be under development. On the other hand, Brazil does not have the natural resources necessary for a large-scale conventional thermal electric power program, except for the mineral coal in the Southern Region, which is restricted to local use.
Competitiveness of the Hydroelectric Potential: Most of Brazil's hydroelectric potential in use by the year 2000 will have been implemented at low cost (around 1,000 US$/kW or less - roughly 20 US$/MWh). Several of these plants are located in the vicinity of consumption centers and have relatively short transmission systems, a factor that contributes to their competitiveness.
Renewable Source: Since hydroelectric power is a renewable source, it is of strategic importance to Brazil. The useful life of hydroelectric power plants is much longer than the 50 years adopted in economic evaluations. In the long run, the country's hydroelectric plants will generate electric power at a very low cost, merely to cover operation and maintenance expenses, since the investment costs will be partially or entirely amortized. In Brazil, this is already the case for a significant number of hydroelectric plants in operation that were installed since the 50's.
National Technology: Brazil masters the technology used in the various stages of hydroelectric power generation: planning, design, civil works and assembly, equipment production and operation/maintenance, as well as the management of the whole process. Therefore, the hydroelectric program is carried out with national resources, generating employment and technological development.
Environment and Multiple Uses: The hydroelectric plants in operation or under construction, except for a few, have no significant negative impact on the environment, since the most favorable sites were chosen. A noteworthy aspect is that, although most of the hydroelectric projects were planned and designed for energy generation, several of the reservoirs are also used to other ends, within a concept of multiple use of water resources.
5. Brazil's electric power prospects up to the year 2015
5.1 Electric power market
At medium and long term, the prospects of electric power consumption growth are favorable, due to the population's growth (from 167 million inhabitants in the year 2000 to nearly 200 million inhabitants in 2015), to the economic expansion, and to the availability of several energy sources, including energy integration with neighboring countries.
A long-term forecast for the economy and for the electric power market was made in the PLAN 2015 studies. Scenarios II and III of PLAN 2015 are adopted in this paper. The average annual growth rates for the economy and for the electric power consumption are shown in Table V, for the period 2000/2015. Electric power consumption in Brazil will increase from 315 TWh in the year 2000, to 630 TWh (Scenario I) or 730 TWh (Scenario II) in the year 2015. The resulting annual per capita consumption would be 3,150 or 3,650 kWh/inhabitant-year in that year.
5.2 Electric power supply
Expansion in electric power consumption requires an increase in Brazil's installed capacity from 70 GW in the year 2000, to approximately 150 or 170 GW in 2015, for the two adopted scenarios. This corresponds to an addition of 80 or 100 GW generating capacity, over the 2000/2015 period. Several different primary sources will have to be utilized for electric power generation depending, basically, on the following: availability of energy resources, competitiveness, environmental viability and the current stage of technology.
Brazil has an abundance of primary energy sources for generating electric power: hydroelectric potential, coal, uranium (nuclear power) and alternative sources (biomass, solar energy and eolic energy). On the other hand, oil and natural gas resources available in Brazil are not sufficient for a large-scale conventional thermoelectric generation expansion program.
The competitiveness evaluation of various primary sources for electric power generation is based on a 10% annual discount rate and on an useful life of 50 years for hydroelectric plants, and of 30 years for thermal plants. All costs - investment, operation/fuel and maintenance, as well as environmental - of the plants are considered. Benefits are calculated for each plant operating under optimized conditions within the interconnected system. Table VI shows the cost ranges of energy generated, in Brazil, by means of the different primary sources. As can be seen, approximately 2/3 of Brazil's hydroelectric potential is competitive with a combination of coal and nuclear power.
A reliable environmental component in generation undertakings must be founded on three basic principles: Social-Environmental Viability, Regional Insertion and Decision Process.
The "Social-Environmental Viability" of generation projects, especially hydroelectric, must be based on the following requirements: 1) an in-depth analysis of the social and environmental impacts caused by the installation and the operation of the plant: 2) restrictions considered relevant in the social-environmental field, such as preserving certain cultural values or areas of special ecological importance; 3) pinpointing favorable net benefits (positive less negative impacts).
The social-environmental viability concept of a generation project must translate itself into a satisfactory balance between the Electrical Sector's objectives - meeting its market demands at the lowest possible cost and the expectations of the social segments whose electric power demand will be met and of the local community affected by the implementation of the project.
"Regional Insertion" must take into account that the installation and the operation of a power plant causes a potential conflict between the objectives of the Electrical Sector and those of the social groups and of the economic activities affected by the project.
Regional insertion of the project should maximize the benefits for the Electrical Sector and, at the same time, develop local potentials. Thence, an effort should be made to reduce negative impacts and to promote benefits in the project's influence range. As an example, for hydroelectric plants, the following benefits may arise for the local communities: flood control, shipping, leisure activities, water supply, irrigation, fisheries, and others. One successful program with satisfactory results consists of paying royalties to the communities affected by hydroelectric plant reservoirs. These royalty funds may be invested in municipal social programs, such as education and health.
The "Decision Process", in regard to social-environmental aspects, depends on a good relationship between the Electrical Sector and society. Inter-institutional communication is of fundamental importance, in order to synchronize objectives and strategies as well as for establishing procedures that include defining the financial responsibilities of the involved entities. It is therefore a good idea for the Electrical Sector to adopt a strategy of sharing planning and decision making, transforming a power plant in a tool for regional development.
No technological restrictions hinder the expansion of generation and transmission systems in Brazil. Nevertheless, technological improvements are necessary, basically with a view to reduce costs in the following fields: mineral coal - environmental control of emissions and combustion in circulating fluidized bed; biomass - gasification of wood and use in high-yield gas-fired turbines; hydroelectric power - roller compacted concrete dams, auscultation and monitoring civil structures, automation and control of plant operation and maintenance; as well as eolic and solar generation.
5.3 Generation expansion strategy up to 2015
Considering the size of the country and the specific economic-energy features of its various regions, the electric power requirements for the year 2015, and the aspects mentioned above regarding the different energy sources, Brazil should use, for long term generation expansion, a combination of all available sources, endeavoring to optimize their composition and also to promote benefits for the national economy. The prospects for using different energy sources are listed below:
"Mineral Coal" thermal power may have an important share in the generation of electric power from 2010 on, when this option would expand in a substantially and competitively manner. The use of Brazilian mineral coal is expected to continue restricted to the Southern Region, with a circulating fluidized bed combustion technology. In other regions of the country, coal-fired thermoelectricity is likely to be based on imported fuel and conventional technology. In the years 2000/2010, PLAN 2015 propose a minimum program of national mineral coal-fired thermal units, basically in order to prepare the country for this generation alternative which will be necessary at medium term.
"Nuclear Power" is a long-term option, applicable after the competitive and environmentally viable hydroelectric potential has been exhausted. It is unknown when this will take place, since it basically depends on: the expansion scenarios of the economy and of the electric power market; the competitiveness and environmental questions of that potential; and the magnitude of the conventional thermal program. Evaluations so far indicate that this will happen after the year 2015. PLAN 2015, similarly to its stand toward mineral coal, proposes a minimum nuclear program up to the year 2015, as a way to prepare the country for this generation option that will be necessary at long term.
"Natural Gas" will be used for generating electric power in the Northern Region of Brazil where deposits compatible with the size of the foreseen thermal program are found. In other regions, especially in the south and southeast, projects for importing this fuel from Bolivia and Argentina are at the implementation stage. Natural gas generation is the best conventional thermal generation source from an environmental and competitive point of view, especially when located near consumption centers. It is beneficial to the transmission system and supply reliability. The natural gas thermal generation program is expected to develop, subject only to the availability of the fuel at an adequate price.
"Sugarcane Residues" are also an option since they are widely available, and because they can be used in cogeneration processes in the sugar and alcohol industries, with the sale of the surplus electric power to utilities, at competitive costs. "Biomass" is also highly available as fuel, especially in the Northern Region (Natural Forest). The main problems with this option are technological limitations and costs. A project for the generation of electric power by gasefying biomass and using high yield gas turbines is underway to test technology and related costs, which may cause this primary source to become a viable alternative.
"Alternative Sources "such as eolic and solar energy may be used in specific cases of isolated small systems; others, such as shale, tidal power, hydrogen, organic residues, turf and lignite are not envisaged for use by the year 2015, due to technological difficulties and cost.
"Energy Interchange with Neighboring Countries" is, in some cases, a competitive option for the supply of firm, hydroelectric or thermal energy, and for the exchange of optimization energy, aiming at the reduction of fuel used in the thermal plants and of the system's deficit risk. Several projects involving Argentina, Uruguay and Venezuela are being implemented.
"Oil By-Products" are not likely to feature in large electric power generation programs, due to their cost and to their other more relevant uses, except for certain specific circumstances in isolated systems.
Finally, "Hydroelectric Power", offers the best prospects for use in Brazil until the year 2015. It would, in fact, be beneficial to continue the hydroelectric program to assure the predominance of hydroelectricity in the supply of the electrical system in this year. Approximately half of Brazil's available hydroelectric power potential is found in the Amazon Region, at a distance of approximately 2,500 km from the principal consumption centers. In order to make use of this hydroelectric potential, long-distance transmission lines should be implemented. Studies confirm the technical-economic viability of this transmission, over 3,000 km, provided a direct current technology similar to that of the present transmission system of ITAIPU is adopted; estimated costs stand at about US$ 16.00 per MWh transmitted, including investment, operation and maintenance expenditures, and electricity losses.
In Brazil, hydroelectric power has very little negative impact on the four chief categories cited in international discussions on the deterioration of the environment: the greenhouse effect, acid deposits, destruction of the ozone layer, and the loss of biodiversity. Moreover, the use of hydroelectric power in Brazil does not contaminate water resource or the soil. Within the "regional insertion" concept of hydroelectric plants, the flooding of areas for reservoirs that caused local physical and social-economic impacts took place in a perfectly acceptable manner, with a positive balance between benefits (energy and others) and costs (economic, social and environmental).
The cost of energy generated by the Brazilian hydroelectric plants is low. This is due to three principal reasons: plants in operation, with few exceptions, were implemented at a low investment cost; integrated operation of the hydroelectric plants in the interconnected system, raises the energy generation; the investment costs are partially or totally amortized for several plants.
The reasons that lead the Brazilian generating system to be predominantly hydroelectric in the year 2000 continue valid in the context of the system's expansion. Thus, generation will continue to be mostly hydroelectric in its configuration for the year 2015, amounting to about 80% of the total electric power production. Of the additional 80 or 100 GW necessary in the 2000/2015 period, according to the scenarios outlined in PLAN 2015, approximately 60 or 75 GW will be hydroelectric.
6. Conclusions
In the 20th century, Brazil opted for hydroelectric power as the source for supplying practically the entire national electricity market. Large plants and their respective regional transmission systems began to be installed in the fifties.
This was the correct option, considering the results obtained by the Brazilian Electrical Sector. Reliable energy supply in sufficient amounts to meet consumer demand is assured from a renewable primary source that is environment-friendly, both from a local (the micro-region of the plant's location) and a global point of view. Moreover, the useful life of the hydro plants is much longer than the 50 years adopted in the economic evaluations.
The cost of the generated hydroelectric power is low and does not run the risk of rising (a risk faced in the case of thermal plants if the cost of fuel increases); in fact, it tends to drop in time, as the investment costs are partially or totally amortized for most plants.
The transmission system has very important integration and optimization roles, through the increase of the total electric energy production of the hydroelectric plants. Long transmission lines, of about 3,000 km - nowadays technically and economically feasible - will be necessary in order to use the hydroelectric potential of the country's Northern Region to supply the National Interconnected System.
In Brazil, the expansion of the generating system is expected to occur up to 2015, predominantly based on hydroelectric plants. The share of hydroelectricity in the year 2015 is estimated at about 80% of the generation system
VENTURA FILHO, Altino ITAIPU Binacional Foz do Iguaçu, Brazil
1. Introduction
This paper deals with an evaluation of Brazil's option in favor of hydroelectric power as its primary source of electric power generation.
Aspects concerning the environment, as well as technological and economic considerations in regard to the use of hydroelectric power in Brazil are commented, stressing the importance of the transmission system for the integration and the optimization of hydroelectric generation.
Reference is made to Brazil's strategy for expanding its generating system at medium term, up to the year 2015, listing the various primary sources for the generation of electric power and explaining why priority is given to continued use of the country's hydroelectric potential.
2. Electric power supply and hydroelectric power
Hydroelectric power is an important and widely used primary source for the generation of electric power. Figure 1 shows the share of each of the several primary sources in world terms and in Brazil.
Coal is the most important source used for the generation of electricity, amounting to 40% of the world total. The cost of the energy generated by means of current technology is competitive, even taking into account fuel transportation costs. The relative abundance of coal indicates that its price on the international market will remain stable. Technological evolution will be necessary, especially regarding control of emissions into the environment, and this may result in a rise of approximately 25% in investment costs. The use of mineral coal for large scale electric power generation, at medium and long term, depends basically on its economical and environmental competitiveness, when compared to the other thermal options, mainly nuclear power and natural gas.
Hydroelectric power, worldwide the second largest primary source used for electricity generation, amounts to 19% of the total production of electricity. Its use evolved in industrialized countries that took advantage of the economically and environmentally feasible portion of their total hydroelectric potential, which corresponds to a percentage between 60 and 80%. No major hydroelectric program is foreseen for these countries. Future hydroelectric expansion is more likely to occur in developing countries, where most of the hydroelectric potential is still available. Restrictions to such expansion will be related to environmental aspects of hydroelectric plants and to the limited funds available for investment in these projects, considering the large amounts necessary to meet the growing evolution of the electric systems in these countries.
Nuclear power, the third largest source used for electric power generation (17% of the total) gained in importance in the 60s and 70s. As from the 80s, programs for the installation of new units were scaled down, especially in the United States and Europe. This option has the environmental advantage of not contributing to global climatic changes, such as the greenhouse effect. Large scale nuclear generation expansion depends on public acceptance, its competitiveness with other thermal options, and upon environmental restrictions, that may be placed on conventional thermal generation sources, such as a CO2 emission tax.
Natural gas fired generation is responsible for 13% of the worldwide electricity production, and is expected to grow rapidly in the future, due to the technological progress achieved over the last decades, especially in the yield of the thermal energy/electricity conversion process in combined cycle plants, and to the fact that investment costs have been drastically reduced. Natural gas, when available, is a competitive low-cost option for electric power generation and may be implemented at short term. It is also considered the best conventional alternative for thermal power from an environmental point of view. It can, furthermore, be implemented in different modules and sizes, in cogeneration processes at consumer-end level, thereby acquiring greater energy efficiency.
The use of oil by-products for power generation is more likely to remain restricted to special situations due to the possibility of more relevant uses for this fuel, and also for strategic reasons. No large-scale worldwide programs for oil by-products fired plants are foreseen.
3. Brazil's economy and energy
Brazil is a vast country - 8.5 million square kilometers - the fifth largest in the world. Distances between its extreme boundaries - north to south, east to west - span more than 4,000 km. Its Atlantic Ocean shore extends over 7,000 km, whereas its territorial borders measure approximately 16,000 km, touching all South American countries, except Chile and Ecuador, as shown in Figure 1. Brazil's huge dimensions favor the use of the country's hydroelectric potential, due to its high energy value, as will be seen in this paper.
It is estimated that the country's population will reach 167 million inhabitants by the year 2000 (demographic density of 19.6 inhabitants/km2), with an annual growth rate of 1.2% - an increase of 2 million inhabitants per year. These figures make Brazil the fifth most populated country in the world. [1]
Brazil's Gross Domestic Product grew over the period 1970/2000 at a higher rate than its population, despite the recessive 80s. Over the period 1970/2000, the GDP rose from US$ 240 billion, to approximately US$ 850 billion (exchange rate of 1995), a yearly growth rate of 4.3%, resulting in an annual income elevation from 2,580 to 5,090 US$/inhabitant-year, over the last thirty years. Table 1 shows a breakdown of the GDP by primary, secondary and tertiary sectors for the years 1970 and 2000, and the country's urbanization level, which are important aspects affecting the overall energy growth, including electric power.
The Energy Sector took large strides forward during the period 1970/2000, due to Brazil's economic expansion, industrialization and growing urbanization. During these thirty years, the Energy Consumption x Gross Domestic Product elasticity stood at about 1.25. Table II provides a breakdown of national energy consumption by main energy types for the years 1970 and 2000. As can be seen, a major structural change occurred over these thirty years. Electricity (renewable source-hydro) shot up from 19 to 41%, the use of firewood, charcoal and sugar-cane bagasse dropped significantly (from 40 to 20%), and oil by-products use declined from 38 to 32%. Presently, renewable energy amounts to 2/3 of the total.
This large share borne by electricity is a result of its 7,1% average annual growth rate in the 1970/2000 period (from 40 TWh to 315 TWh, electric energy consumption). This rate is to be compared to the rates of growth for the economy (4.3%), the population (2.0%) and energy consumption from all sources (5.4%). The Electric Power Consumption x Gross Domestic Product elasticity in Brazil will probably reach 1.65 during the 1970/2000 period. The electricity content of the GDP is expected to rise from 0.167 in the year 1970, to 0.371 kWh/US$ of the GDP, in 2000, whereas the annual per capita electric power consumption is estimated to rise from 430 to 1,886 kWh/inhabitant-year, during this period. As the per-capita consumption figure, for the year 2000, is well below the average value for industrialized countries, it can be inferred that there is a large middle and long term (15 to 20 years) growth potential for the Brazilian electric power market.
4. Hydroelectric power in Brazil
4.1 - General remarks
Figure I shows the distribution of primary sources for electric power generation in Brazil. Hydroelectric power stands out, with 96,8% of the total. Thermal generation comprises oil by-products (1.3%), mineral coal (1.2%) and nuclear power (0.7%). Oil-fired generation is usually restricted to isolated systems in the northern part of the country, in the Amazon Region. But, occasionally, if the hydrological situation is unfavorable or there is need for peak supply, oil by-products are used for thermal generation in the National Interconnected System. Coal-fired generation is restricted to Brazil's Southern Region, and it aims at making use of this regionally available primary energy source in order to develop the technology which will be needed for medium-term generation expansion. Presently, nuclear power is generated only at Angra I plant (657 MW). In 1999, the Angra II plant (1309 MW) will be in operation.
The significant predominance of hydroelectric power, the geographical dimension of the national interconnected electrical system, the size of its market, as well as the large number of hydroelectric plants located at great distances from each other, and possessing different hydrological regimes, place Brazil in a unique worldwide situation. Two important aspects are noteworthy: one refers to hydroelectric generation itself and the other to the role of the transmission system.
In the first case, the amount of energy generation depends directly on the natural flow of rivers and the storage capacity of reservoirs. A historical analysis of the natural flows available, dating back to 1931, shows that, in general, hydrological conditions are favorable. Isolated years of low water supply were rare. Consecutive years of draught with a flow significantly lower than average were even rarer. Within a specific year, hydrology is markedly seasonal. There occur periods of strong flow - floods - at the start of the year in the main hydrographical basins.
As a result of these hydrological characteristics and the possibility of installing reservoirs for storing large volumes of water at a low cost, Brazil's hydroelectric system can regulate pluri-annual stocks for a period of about 5 years. Such regulating capacity and the electrical interconnections among hydrographical basins require a continuous time-dependent evaluation of the supply system with regard to energy generation (as opposed to thermal systems), as this generation in one particular year is conditioned by the previous hydrological behavior and its expected evolution in the following years.
The role played by the transmission in a hydroelectric system, such as the Brazilian, is of major importance. Aside from transporting the energy generated to the consumption centers, which is the basic function of transmission in thermal systems, it also permits the optimization of the hydro generation. This optimization increases the overall energy production by transferring the surplus energy surplus available in some plants to other hydrographical basins or geographical regions with unfavorable hydrological conditions. The optimized operation of the Brazilian hydroelectric system results in an increase of about 30% in energy generation, when compared to the production that would be obtained through the individual operation of the plants, without the coordination of a centralized dispatch. This, in Brazil, gives rise to a significant cost reduction for hydroelectric power generation. This distinctive characteristic of the transmission system is recognized by the legal framework of the Electric Sector, which differentiates it from transmission systems that are connected to plants and to the distribution segment.
In the Brazilian electric power system, the market supply criterion is based upon meeting average energy requirements, attributing a lower priority to peak supply. This philosophy opposes that adopted for thermal systems, which emphasizes peak demand supply. The Brazilian system adopts a criterion based on the supply of guaranteed energy with a certain deficit risk. Currently the maximum annual deficit risk considered for expanding the electric power generation in order to meet the energy requirements is 5%.
4.2 - Brazil's electrical system in the year 2000
Brazil's electrical system configuration for the year 2000, takes into account the energy supply to two different geographical areas. One is covered by the National Interconnected System, extending for 6.0 million km2, corresponding to 70% of Brazil's territory and to 98% of the country's electric power consumption. The second area comprises the nearly 400 isolated systems, mainly located in the northern region, covering 2.5 million km2, and corresponding to the remaining 2% of the total electrical power consumption.
Figure 2 shows these systems, highlighting the National Interconnected System and the interconnections among the different geographical regions of the country - north/northeast, north/south and south/southeast.
The National Interconnected System integrates a significant number of hydroelectric plants of various sizes that are often situated at great distances from each other and have, in some cases, different hydrological regimes. Therefore, plants as widely apart - about 3,000 km - as Tucuruí (8,325 MW) located on the Tocantins River, in the northern region, and Itá (1,450 MW) on the Uruguai River, in the southern region, are inter-dependent due to the different hydrological regimes, and require a coordinated operation. Table III shows Brazil's installed capacity in hydroelectric and thermal terms, for the year 2000; Table IV highlights the main characteristics of hydroelectric plants over 1,000 MW.
4.3 - Hydroelectric power generation in Brazil
Brazil's option for hydroelectric power is based on the following reasons:
Availability of Hydroelectric Resources: Brazil has a hydroelectric potential of 260 GW that can generate 1,270 TWh/year, and ranks 3rd in the world. By the year 2000, only 30% of this potential will have been used or will be under development. On the other hand, Brazil does not have the natural resources necessary for a large-scale conventional thermal electric power program, except for the mineral coal in the Southern Region, which is restricted to local use.
Competitiveness of the Hydroelectric Potential: Most of Brazil's hydroelectric potential in use by the year 2000 will have been implemented at low cost (around 1,000 US$/kW or less - roughly 20 US$/MWh). Several of these plants are located in the vicinity of consumption centers and have relatively short transmission systems, a factor that contributes to their competitiveness.
Renewable Source: Since hydroelectric power is a renewable source, it is of strategic importance to Brazil. The useful life of hydroelectric power plants is much longer than the 50 years adopted in economic evaluations. In the long run, the country's hydroelectric plants will generate electric power at a very low cost, merely to cover operation and maintenance expenses, since the investment costs will be partially or entirely amortized. In Brazil, this is already the case for a significant number of hydroelectric plants in operation that were installed since the 50's.
National Technology: Brazil masters the technology used in the various stages of hydroelectric power generation: planning, design, civil works and assembly, equipment production and operation/maintenance, as well as the management of the whole process. Therefore, the hydroelectric program is carried out with national resources, generating employment and technological development.
Environment and Multiple Uses: The hydroelectric plants in operation or under construction, except for a few, have no significant negative impact on the environment, since the most favorable sites were chosen. A noteworthy aspect is that, although most of the hydroelectric projects were planned and designed for energy generation, several of the reservoirs are also used to other ends, within a concept of multiple use of water resources.
5. Brazil's electric power prospects up to the year 2015
5.1 Electric power market
At medium and long term, the prospects of electric power consumption growth are favorable, due to the population's growth (from 167 million inhabitants in the year 2000 to nearly 200 million inhabitants in 2015), to the economic expansion, and to the availability of several energy sources, including energy integration with neighboring countries.
A long-term forecast for the economy and for the electric power market was made in the PLAN 2015 studies. Scenarios II and III of PLAN 2015 are adopted in this paper. The average annual growth rates for the economy and for the electric power consumption are shown in Table V, for the period 2000/2015. Electric power consumption in Brazil will increase from 315 TWh in the year 2000, to 630 TWh (Scenario I) or 730 TWh (Scenario II) in the year 2015. The resulting annual per capita consumption would be 3,150 or 3,650 kWh/inhabitant-year in that year.
5.2 Electric power supply
Expansion in electric power consumption requires an increase in Brazil's installed capacity from 70 GW in the year 2000, to approximately 150 or 170 GW in 2015, for the two adopted scenarios. This corresponds to an addition of 80 or 100 GW generating capacity, over the 2000/2015 period. Several different primary sources will have to be utilized for electric power generation depending, basically, on the following: availability of energy resources, competitiveness, environmental viability and the current stage of technology.
Brazil has an abundance of primary energy sources for generating electric power: hydroelectric potential, coal, uranium (nuclear power) and alternative sources (biomass, solar energy and eolic energy). On the other hand, oil and natural gas resources available in Brazil are not sufficient for a large-scale conventional thermoelectric generation expansion program.
The competitiveness evaluation of various primary sources for electric power generation is based on a 10% annual discount rate and on an useful life of 50 years for hydroelectric plants, and of 30 years for thermal plants. All costs - investment, operation/fuel and maintenance, as well as environmental - of the plants are considered. Benefits are calculated for each plant operating under optimized conditions within the interconnected system. Table VI shows the cost ranges of energy generated, in Brazil, by means of the different primary sources. As can be seen, approximately 2/3 of Brazil's hydroelectric potential is competitive with a combination of coal and nuclear power.
A reliable environmental component in generation undertakings must be founded on three basic principles: Social-Environmental Viability, Regional Insertion and Decision Process.
The "Social-Environmental Viability" of generation projects, especially hydroelectric, must be based on the following requirements: 1) an in-depth analysis of the social and environmental impacts caused by the installation and the operation of the plant: 2) restrictions considered relevant in the social-environmental field, such as preserving certain cultural values or areas of special ecological importance; 3) pinpointing favorable net benefits (positive less negative impacts).
The social-environmental viability concept of a generation project must translate itself into a satisfactory balance between the Electrical Sector's objectives - meeting its market demands at the lowest possible cost and the expectations of the social segments whose electric power demand will be met and of the local community affected by the implementation of the project.
"Regional Insertion" must take into account that the installation and the operation of a power plant causes a potential conflict between the objectives of the Electrical Sector and those of the social groups and of the economic activities affected by the project.
Regional insertion of the project should maximize the benefits for the Electrical Sector and, at the same time, develop local potentials. Thence, an effort should be made to reduce negative impacts and to promote benefits in the project's influence range. As an example, for hydroelectric plants, the following benefits may arise for the local communities: flood control, shipping, leisure activities, water supply, irrigation, fisheries, and others. One successful program with satisfactory results consists of paying royalties to the communities affected by hydroelectric plant reservoirs. These royalty funds may be invested in municipal social programs, such as education and health.
The "Decision Process", in regard to social-environmental aspects, depends on a good relationship between the Electrical Sector and society. Inter-institutional communication is of fundamental importance, in order to synchronize objectives and strategies as well as for establishing procedures that include defining the financial responsibilities of the involved entities. It is therefore a good idea for the Electrical Sector to adopt a strategy of sharing planning and decision making, transforming a power plant in a tool for regional development.
No technological restrictions hinder the expansion of generation and transmission systems in Brazil. Nevertheless, technological improvements are necessary, basically with a view to reduce costs in the following fields: mineral coal - environmental control of emissions and combustion in circulating fluidized bed; biomass - gasification of wood and use in high-yield gas-fired turbines; hydroelectric power - roller compacted concrete dams, auscultation and monitoring civil structures, automation and control of plant operation and maintenance; as well as eolic and solar generation.
5.3 Generation expansion strategy up to 2015
Considering the size of the country and the specific economic-energy features of its various regions, the electric power requirements for the year 2015, and the aspects mentioned above regarding the different energy sources, Brazil should use, for long term generation expansion, a combination of all available sources, endeavoring to optimize their composition and also to promote benefits for the national economy. The prospects for using different energy sources are listed below:
"Mineral Coal" thermal power may have an important share in the generation of electric power from 2010 on, when this option would expand in a substantially and competitively manner. The use of Brazilian mineral coal is expected to continue restricted to the Southern Region, with a circulating fluidized bed combustion technology. In other regions of the country, coal-fired thermoelectricity is likely to be based on imported fuel and conventional technology. In the years 2000/2010, PLAN 2015 propose a minimum program of national mineral coal-fired thermal units, basically in order to prepare the country for this generation alternative which will be necessary at medium term.
"Nuclear Power" is a long-term option, applicable after the competitive and environmentally viable hydroelectric potential has been exhausted. It is unknown when this will take place, since it basically depends on: the expansion scenarios of the economy and of the electric power market; the competitiveness and environmental questions of that potential; and the magnitude of the conventional thermal program. Evaluations so far indicate that this will happen after the year 2015. PLAN 2015, similarly to its stand toward mineral coal, proposes a minimum nuclear program up to the year 2015, as a way to prepare the country for this generation option that will be necessary at long term.
"Natural Gas" will be used for generating electric power in the Northern Region of Brazil where deposits compatible with the size of the foreseen thermal program are found. In other regions, especially in the south and southeast, projects for importing this fuel from Bolivia and Argentina are at the implementation stage. Natural gas generation is the best conventional thermal generation source from an environmental and competitive point of view, especially when located near consumption centers. It is beneficial to the transmission system and supply reliability. The natural gas thermal generation program is expected to develop, subject only to the availability of the fuel at an adequate price.
"Sugarcane Residues" are also an option since they are widely available, and because they can be used in cogeneration processes in the sugar and alcohol industries, with the sale of the surplus electric power to utilities, at competitive costs. "Biomass" is also highly available as fuel, especially in the Northern Region (Natural Forest). The main problems with this option are technological limitations and costs. A project for the generation of electric power by gasefying biomass and using high yield gas turbines is underway to test technology and related costs, which may cause this primary source to become a viable alternative.
"Alternative Sources "such as eolic and solar energy may be used in specific cases of isolated small systems; others, such as shale, tidal power, hydrogen, organic residues, turf and lignite are not envisaged for use by the year 2015, due to technological difficulties and cost.
"Energy Interchange with Neighboring Countries" is, in some cases, a competitive option for the supply of firm, hydroelectric or thermal energy, and for the exchange of optimization energy, aiming at the reduction of fuel used in the thermal plants and of the system's deficit risk. Several projects involving Argentina, Uruguay and Venezuela are being implemented.
"Oil By-Products" are not likely to feature in large electric power generation programs, due to their cost and to their other more relevant uses, except for certain specific circumstances in isolated systems.
Finally, "Hydroelectric Power", offers the best prospects for use in Brazil until the year 2015. It would, in fact, be beneficial to continue the hydroelectric program to assure the predominance of hydroelectricity in the supply of the electrical system in this year. Approximately half of Brazil's available hydroelectric power potential is found in the Amazon Region, at a distance of approximately 2,500 km from the principal consumption centers. In order to make use of this hydroelectric potential, long-distance transmission lines should be implemented. Studies confirm the technical-economic viability of this transmission, over 3,000 km, provided a direct current technology similar to that of the present transmission system of ITAIPU is adopted; estimated costs stand at about US$ 16.00 per MWh transmitted, including investment, operation and maintenance expenditures, and electricity losses.
In Brazil, hydroelectric power has very little negative impact on the four chief categories cited in international discussions on the deterioration of the environment: the greenhouse effect, acid deposits, destruction of the ozone layer, and the loss of biodiversity. Moreover, the use of hydroelectric power in Brazil does not contaminate water resource or the soil. Within the "regional insertion" concept of hydroelectric plants, the flooding of areas for reservoirs that caused local physical and social-economic impacts took place in a perfectly acceptable manner, with a positive balance between benefits (energy and others) and costs (economic, social and environmental).
The cost of energy generated by the Brazilian hydroelectric plants is low. This is due to three principal reasons: plants in operation, with few exceptions, were implemented at a low investment cost; integrated operation of the hydroelectric plants in the interconnected system, raises the energy generation; the investment costs are partially or totally amortized for several plants.
The reasons that lead the Brazilian generating system to be predominantly hydroelectric in the year 2000 continue valid in the context of the system's expansion. Thus, generation will continue to be mostly hydroelectric in its configuration for the year 2015, amounting to about 80% of the total electric power production. Of the additional 80 or 100 GW necessary in the 2000/2015 period, according to the scenarios outlined in PLAN 2015, approximately 60 or 75 GW will be hydroelectric.
6. Conclusions
In the 20th century, Brazil opted for hydroelectric power as the source for supplying practically the entire national electricity market. Large plants and their respective regional transmission systems began to be installed in the fifties.
This was the correct option, considering the results obtained by the Brazilian Electrical Sector. Reliable energy supply in sufficient amounts to meet consumer demand is assured from a renewable primary source that is environment-friendly, both from a local (the micro-region of the plant's location) and a global point of view. Moreover, the useful life of the hydro plants is much longer than the 50 years adopted in the economic evaluations.
The cost of the generated hydroelectric power is low and does not run the risk of rising (a risk faced in the case of thermal plants if the cost of fuel increases); in fact, it tends to drop in time, as the investment costs are partially or totally amortized for most plants.
The transmission system has very important integration and optimization roles, through the increase of the total electric energy production of the hydroelectric plants. Long transmission lines, of about 3,000 km - nowadays technically and economically feasible - will be necessary in order to use the hydroelectric potential of the country's Northern Region to supply the National Interconnected System.
In Brazil, the expansion of the generating system is expected to occur up to 2015, predominantly based on hydroelectric plants. The share of hydroelectricity in the year 2015 is estimated at about 80% of the generation system
BCD Electric RSS feed