Paulo Roberto de Almeida
Electricity in Brazil
The Economist, February 10th 2011
SÃO PAULO - IT WAS not a “blackout”, said Edison Lobão, merely a “temporary interruption of the electricity supply”. Brazil’s energy minister was speaking on February 4th after nearly 50m people across eight states in the country’s north-east had spent most of the night without power. Engineers are still investigating, but their preliminary conclusion is that a component in a substation failed just after midnight. That caused safety systems to malfunction, and transmission lines and then a power station to shut down.
Mr Lobão is trying to reserve the b-word for something more serious, which his government is determined to avoid: a big and sustained mismatch between electricity supply and demand. That last happened in 2001-02, after decades of growing energy use and low investment were followed by drought (70% of Brazil’s power comes from hydroelectric dams.) Back then, only rationing kept the lights on, and the after-effects dampened demand for some years.
Electricity use is growing strongly once more, rising by 7.8% last year. That is partly because Brazil’s economy is booming. But even if this changes, power use is unlikely to fall. Brazilians who have recently levered themselves out of poverty would give up much else before unplugging their first-ever fridges and washing machines. Luz Para Todos (Light for All), a government rural-electrification programme launched by Dilma Rousseff, the president, when she was energy minister, has hooked up more than 2.4m homes since 2003, and is continuing. The government reckons demand for electricity will rise by 5% a year over the next decade. Officials plan to mobilise investment totalling some 214 billion reais ($128 billion), from both private and public sources, in order to meet it.
Some of that will go on new fossil-fuel and nuclear plants, and some on biomass and wind energy. But the biggest chunk is for new hydroelectric projects. They are controversial, particularly the Belo Monte dam approved for the Xingu, a tributary of the Amazon in the northern state of Pará. This has been redesigned to avoid throwing a huge wall across the river. But it will still be Brazil’s second-biggest hydroelectric plant (after Itaipu), generating up to 11,230MW, will flood 500 square kilometres and will displace 20,000 people, mainly Indians.
One way or another, Brazil is likely to avoid a new energy crunch, concluded a recent study by IPEA, a government-linked think-tank. But both cost and reliability are growing problems. Taxes mean that on average electricity costs two-thirds more in Brazil than in the United States. But the IPEA researchers expect the average price to rise further. Relying on hydro-generation in the Amazon means that electricity supply will be vulnerable to droughts and depend on long distribution lines to bring power to the populous south. These will be hard to maintain.
The strain is starting to show. Brazil suffered 91 big blackouts during 2010, up from 48 in 2008. In big cities short, localised power cuts are becoming common. One occurred when The Economist recently visited the research laboratory in Rio de Janeiro of Petrobras, Brazil’s oil giant. They have been happening at least once a week this (southern-hemisphere) summer, said the lab’s boss. Brazilians may have to get used to “temporary interruptions” every time they turn up their air-conditioners.
