The Brazilian Conundrum: More Hydropower, Greater Greenhouse Gas Emissions

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1 The Brazilian Conundrum: More Hydropower, Greater Greenhouse Gas Emissions Antonio Oliveira Federation of Industries of the State of Rio de Janeiro - FIRJAN System Board of Economic Development June 18 th 2014

2 The Brazilian Power Grid Hydropower plays a major role in the Brazilian power grid. Installed Capacity (2012): 120 Thousand MW 2% nuclear biomass and wind 9% fossils 14% 75% hydropower Electricity Generation Mix ( ) hydropower fossils 4% 6% 90% biomass, wind and nuclear Source: the authors, based on data from Operador Nacional do Sistema Elétrico - ONS Capacity currently expected to be added to the grid ,601 MW % hydropower 1

3 The Future Expansion of the Brazilian Hydropower Grid The Brazilian grid will remain primarily supported by hydroelectricity for many years to come. The majority of this new hydropower will be located in the Brazilian North region, that harbors nearly half of the potential available countrywide. The low topographical relief of the North offers limited conditions for the construction of large reservoirs. Particularly storage reservoirs, that allow for the regularization of the output for extended periods of time. The future expansion of the Brazilian grid will be largely supported by run-of-river plants, whose regularization capacity does not exceed a few weeks. 2

4 The Decline of the Regularization Capacity of the Brazilian Grid % Electricity demand (MW) 37,716 60,058 59% Storage capacity (MWmonth) 236, ,790 22% % 60,058 89,371 49% 288, ,000 2% Source: the authors, based on data from Empresa de Pesquisa Energética EPE (2013). Regularization Capacity of the Brazilian Grid months % % Source: ONS The Brazilian grid will become progressively subject to generation from fossils in order to ensure an adequate supply of electricity in dry seasons. 3

5 Increase of Fossils in Electricity Generation In order to guarantee the operation of the grid at the safety levels of previous years, the share of fossils in electricity generation will nearly double in the intervening years, reaching 11.7% in % 10% 8% 6% 6.4% 7.3% 8.1% 9.0% 9.7% 10.4% 11.0% 11.7% 4% 2% 0% Source: the authors, based on data from EPE (2013) and ONS. How will the increase of the share of fossils in generation impact the emissions of CO2? 4

6 CO2 Emissions per MWh in the Brazilian Grid The average CO2 output per MWh will almost double in the intervening years, reaching 78 kg/mwh in kg CO2/MWh Source: the authors, based on data from EPE (2013) and Intergovernmental Panel on Climate Change - IPCC (2007). How big will the higher rate of CO2 emissions in the Brazilian grid be in relation to those of the leading economies? 5

7 CO2 Emissions per MWh from Electricity Generation in the Leading Economies kg CO2/MWh France Brazil Italy Russia United Kingdom Germany Japan United States 764 Source: Brazil 2022: the authors, based on data from EPE (2013) and IPCC (2007). Remaining countries: International Energy Agency (2011). China 856 India average: 569 kgco2/mwh The higher rate of CO2 output in the Brazilian grid will be marginal as regards the average emissions of the leading economies. The average rate of the leading economies would increase 0.2% because of the higher emissions in Brazil. 6

8 Conclusion The Brazilian power grid will continue to be based on hydropower for the foreseeable future. The decline of the grid s regularization capacity will translate into a greater need for generation from fossil fuels. The increase of CO2 emissions in the Brazilian grid will be marginal in relation to the average emissions of the leading economies. 7

9 Thank you. Antonio Oliveira Federation of Industries of the State of Rio de Janeiro - FIRJAN System Board of Economic Development