Reform Group Meeting Energy & Climate Policy. Luiz Pinguelli Rosa. Salzburg, September Federal University of Rio de Janeiro ( COPPE / UFRJ)

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1 Reform Group Meeting Energy & Climate Policy Salzburg, September 2007 Energy and Climate Change Policy in Brazil Luiz Pinguelli Rosa Director of the Graduate School of Engineering of Federal University of Rio de Janeiro ( COPPE / UFRJ) Secretary General of the Brazilian Forum on Climate Change Former CEO of Eletrobrás s ( ) 2004)

2 Global Energy Security and Biofuel Policy in Brazil Successful program of sugar cane ethanol in substitution for gasoline, that can be considered now as an alternative for the ethanol from corn. Advantage of burning sugar cane bagasse instead of fossil fuel in the distillation process of ethanol, avoiding net greenhouse gas emission. Meeting of Presidents Lula and Bush in 2007 and recent Visit of President Lula to European Countries for international cooperation on biofuels.

3 Biofuels Carbon Cycle

4 The issue of land use for biofuels and competittion with food: - Present sugar cane production 7 millions ha about half for sugar, so for ethanol - 4 milions ha - For comparison : soya beam 23 millions ha cattle 100 millions ha - Present sugar cane plantations are not in North were there is the Amazon forest. - No problem for internal market: fuel consumption of cars = ½ gasoline + ½ ethanol it is possible to double ethanol production without big problem.

5 Problems in Energy and Climate in Brazil Brazil achieved self sufficiency in crude oil production, but there was a disputed with Bolivia on natural gas, solved by now. The electric power in Brazil deserves attention because it is moving from hydroelectricity to thermoelectricity. It means higher greenhouse gas emissions. A very large exportation of ethanol could be a problem concerning land use, depending on the way of expanding sugar cane production and on new technology for ethanol production. The job conditions of workers in sugar cane plantation are bad in some cases and it has to be improved for a clean energy production, because clean must include human dimension besides the environmental one. Biofuels use in private cars (they have Otto cycle engine in Brazil) must not drop the issue of technical and social efficiency cy in transport.

6 Economic and Political Situation of Latin America 1 Economic growth after more than a decade of monetarist policy with very low economic development 2 Poverty reduction X GHG emission reduction 3 Very high social inequality 4 - Left or center-left political parties in the governments of several countries 5 State intervention in energy sector

7 Forecast of Electric Energy Consumption Brazil High Unid.: TWh 450 Reference PDE Low

8 Main State owned energy companies in LA Main State owned oil companies PDVSA Venezuela Pemex Mexico Petrobrás Brazil Main State owned Electric Companies in Brazil Eletronorte North CHESF Northeast Most hydroplants Eletrobrás Furnas Center Holding of : Eletrosul South (big part privatized Tractbel) Itaipu Binacional - 14 GW hydroplant with Paraguay Eletronuclear two nuclear reactors in Angra dos Reis CGTEE Coal fired plants in the South CEMIG (State of Minas Gerais) ) and COPEL (State of Paraná) most of the local states electric companies have been privatized,

9 Recent Events in Energy Policy in South America Shortage of electric energy supply in Brazil in 2001 after privatization. End of privatization of electric energy sector in Brazil in 2003 after President Lula election. Shortage of natural gas in Argentina. State intervention in energy sector of Argentina and interruption of Argentina exportation of gas. Self sufficiency of Brazil in oil production Expansion of PDVSA role in Venezuela Nationalization of oil and gas in Bolivia and dispute between Brazil and Bolivia about natural gas and Petrobrás refineries in Bolivia.

10 Comparison of Energy in LA and World Population LA / World = 7% Mtoe Total: World = LA = 483 4,7% Oil 5,8% Natural Gas 4,0% Nuclear 0,8% Hydroelectricity 21,1%

11 Water Resources km3 / year Brazil 8,2 1st Russia 4,5 Canada 2,9 Indonesia 2,8 China 2,8 USA 2,0 Peru 1,9 India 1,9 Congo 1,3 Venezuela 1,2 Ten Higher 29,7 World 43,7 FAO, United Nations, 2003 quoted by Roberto D Araujo,, 2004

12 Hydroelectric Installed Capacity MW Energy GWh USA 79,5 319,5 Canada 66,9 341,3 China 65,0 204,3 Brazil 57,5 (4th) 285,6 Russia 44,0 160,5 Norway 27,5 121,8 Japan 27,2 84,5 France 25,3 77,5 Índia 22,0 82,2 Italy 16,6 47,0 Sweden 16,2 70,8 Switzerland 13,2 37,3 Venezuela 13,1 60,6 Austria 11,6 41,7 Survey of Energy Resources World Energy Council, Quoted by Roberto D Araujo,, 2004

13 Problems of hydroelectricity in Brazil Environmental questions Movements against dams Pressure to abandon hydroelectricity Need of planning to thermal electric plants to complementation of hydroelectricity

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15 The Brazilian Electric Sector Installed Capacity (MW) Hydro 64.77% ,799 MW Others 0.13% Imports 8.44% Nuclear 2.07% Thermal 18.08% Hydro Itaipu 6.51%

16 The Brazilian Electric Sector Population 180 millions Demand Structure (MW) Mid - South Mid - South 63% 63% 2004 Northeast 14 % North 6 % South 17 %

17 4.000 kms A Continental Size Network SOURSE: ONS 2002 / ILUMINA

18 Energy Poverty Electric Exclusion In Brazil Most of North Region (Amazonian forest) has no grid isolated systems with diesel generation of electricity R$ 4 Billions = US$ 2 Billions of subside. An estimated 12 million people in Brazil do not have electricity. 88% of these people are rural residents 10,5 million rural people, or ~ 2 million households without electricity. In the North, 59,7% of rural homes do not have electricity, in the South approximately 10%.

19 Luz para Todos Light For All Program Started in 2003 To provide electricity services to all rural homes and establishments in Brazil, and to improve services provided to the population. Priority is given to consumers located in rural areas, emphasizing the social nature of the investment. Encourages the use of low-cost, network technologies and decentralized generation units, without extending the conventional grid network.

20 Public Perception of Climate Policy in Brazil Brazil was the first country that signed the Convention of the United Nations on Climate Change in The National Congress ratified it in In the meeting of Kyoto, a Brazilian Proposal was presented, that has had great influence in the discussions. The Proposal was to create a Clean Development Fund, with resources of the Annex I countries to be applied at the developing countries. This Fund was not approved, but instead the Clean Development Mechanism was created.

21 Clean Development Mechanism Coréia do Sul Brasil Emissões Anuais a Reduzir (129,6 milhões t CO2eq) China Índia China Índia Brasil Coréia do Sul México Argent ina Chile Nigéria Áf rica do Sul Egit o Malásia Paquist ão Guat emala Tailândia Colômbia Tuní sia Viet nam El Salvador Nicarágua Peru Equador Honduras Filipinas P. N. Guiné Bangladesh Cost a Rica Bolívia Uruguai Marrocos Armênia Israel Indonésia Sri Lanka Panamá Rep. Dominicana Moldávia Tanzania Uganda Chipre Quirguizist ão Nepal Jamaica Tadjiquist ão

22 IV IPCC Report for Decision Makers Reduction of uncertainty Big impact in public opinion Important influece on governments and companies Concerning Brazil: Main contribution from Brazil is the emission from Amazon deforestation Worry that global warming from World fossil fuels consumption can destroy Amazon

23 GHG Emissions in Brazil National Inventory for Climate Convention highest contribution Energy 10 3 t Industry 10 3 t Cattle-raising 10 3 t Land Use Changes and Forestry 10 3 t Waste Treatment 10 3 t Total 10 3 t CO 2 236,505 CO 2 16,870 CO 2 - CO 2 776,331 CO 2 - CO 2 1,029,706 CH CH 4 3 CH 4 10,161 CH 4 1,805 CH CH 4 13,173 N 2 O 9 N 2 O 14 N 2 O 503 N 2 O 12 N 2 O 12 N 2 O 550

24 Present Situation 1 Developed countries are not reducing their emissions in such a way to reach the goals of the Kyoto Protocol commitment. Developing countries tend to increase their emission with the economy growth as they follow developed countries consumption pattern.

25 Present Situation 2 High income classes in developing countries have high energy consumption while the majority of population is poor and has very low energy consumption. So there is strong inequality of the energy consumption and of GHG emissions by family inside each country following the inequality in income distribution.

26 Energy per Capita ( E / Pop = E / GDP x GDP / Pop ) Data years 1980, 85, 90, 85, 2000 and 2002 Source: Forum Source: Brazilian Forum on Climate Change and COPPE Study,, Brazil China Energy/GDP (M BTU / 100 US$) 3,5 3 2,5 2 1, M BTU / head 300 M BTU / head 100 M BTU / head India Indonesia Mexico South Africa Canada France Germany Japan Norway 0, M BTU / head GDP/Pop (1000 US$ / Head) Netherland s United States United Kingdom Spain World

27 Emission of CO2 per capita from energy consumption C / Pop = C / E x E / P 1980, 85, 90, 85, 2000 and 2002 Source: Brazilian Forum on Climate Change and COPPE, Brazil China 9 India 8 Indonesia Emission/Energy (t CO2 / 100 M Btu) t CO2 / head 5 t CO2 / head Mexico South Africa Canada France Germany Japan Netherlands t CO2 / head 0 0,5 1 1,5 2 2,5 3 3,5 4 4,5 5 Energy/Pop (100 M BTU / Head) Norway United States United Kingdom Spain World

28 Brazilian Forum on Climate Change Objectives To promote debate involving scientific community, non governmental organizations, companies and government To provide information for society in general in such way to assure that decision makers as well as public opinion are aware on the climate change issue due to anthropogenic emissions of greenhouse gases.

29 Brazilian Forum on Climate Change The Chairman of the Forum is the President of the Republic. Members of the Forum: - the ministers of State of the Science and Technology, of the Environment, of Foreign Affairs, of Energy - - invited members from Universities, Companies and NGO s Thematic and sector meetings and other activities The secretary general is named by the President of the Republic Presently the secretary of the Forum is located at the IVIG / COPPE / UFRJ

30 Targets for Reduction of Deforestation In a recent meeting of the minister of Environment and the secretary general of the Brazilian Forum on Climate Change with President Lula it was decided to elaborate a Plan of Action on Climate Change to Brazil. The Forum has elaborated a Proposal for the Plan of Action, presently in discussion by the Ministry of Environment. The main point of the Proposal is to DEFINE INTERNAL TARGETS FOR REDUCTION OF DEFORESTATION IN BRAZIL,, which has been reduced in last 3 years. Why not define targets? Brazilian Government does not agree with the obligation to reduce GHG emissions in Post Kyoto Regime because Annex I Countries are far from Kyoto targets. However there is a proposal presented to Climate Change Convention by Brazil for a International Fund for Reducing Deforestation.

31 Brazilian Comparative Advantages. Brazil has important comparative advantages, thanks to the great component of renewable energy in the energy matrix: hydroelectric energy, alcohol and other biofuels The government's programs for alternative sources or conservation of energy avoiding GHG emissions are: Proinfa of Eletrobrás (wind energy + biomass + small hydro = 3.3 GW) started in 2003, Biodiesel (Mix of 2% by law 5%) ) that involves Petrobrás and other public and private companies Incentives for flexible fuel cars = alcohol or gasoline Conservation of energy (Procel( of Eletrobrás and Conpete of Petrobrás).

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33 Large Projects under Discussion Hydroplants Nuclear Belo Monte Madeira Angra III Investiment /kw Medium Medium Very high Cost of energy Low Low High Transmission Long Very long Short Environmental Opposition Strong Strong Weak

34 Environmental Issues of Nuclear Energy ++ The new arguments for nuclear energy is the greenhouse gas emission of conventional thermo power ++ Improvement of safety systems in the design of future (advanced) nuclear reactors to prevent serious accidents -- No intrinsically safe reactors -- There is not international consensus on the storage of high activity nuclear waste (spent fuel) -- In Brazil there is not yet a definition for storage of nuclear waste of medium and low radioactivity

35 Nuclear Energy involves different aspects: Environmental Risks: Experience Accident with Cesium 137 in Brazil Military Uses Experience The intention of making a nuclear test by Brazilian Air Force in the past not more going on Brazil signed TNP, Tlatelolco Treaty and it was created a bilateral agency with Argentina (ABACC) for mutual inspection of nuclear installations Energy Cost Experience Angra II, from the Germany Brazil Agreement, was very expensive (about US$ 4000/ kw) Angra III (?) US$ 700 millions already in importation of nuclear reactor components from Germany + US$ 3.5 Billions announced by government = US$ 4.2 Billions / 1.3 GW > US$ 3000 / kw > 2 X hydroplant cost order of magnitude e of wind energy in Brazil

36 Emissions from Reservoirs: : Instituto Virtual (IVIG) - COPPE Funnel Bubble Collector Coupled to a Gas Collecting Bottle

37 GHG Emission from Hydroplants Experimental measurements by IVIG / COPPE / UFRJ and USP / S. Carlos

38 Relationship between exrapolated hydro power emission and total Brazilian emission 152,010 x 365 = M t CO y ,49 Mt CO /1,029 2 M t CO = 2 5.4% 2, x 365 = k t CH y k t CH /13,173 4 k t CH = 4 6.1%

39 Summary of Problems Deforestation is the highest contribution of the Country to GHG emission Amazon Electric Energy Generation is changing to fossil fuels - even coal and diesel in the last bid, besides natural gas Intensive use of diesel and fuel oil in isolated systems in North Region with subsides of about R$ 4 billions or US$ 2 billions / year

40 Solutions: Research and Development for Electric Energy Generation Alternative energy sources: not only biofuels wind, solar, use of waste, energy of sea energy efficiency + rationalization Amazon Region Intensive use of diesel and fuel oil in isolated systems with subsides of about US$ 2 billions / year, that could be used for alternative sources of energy.

41 Alternative Energy in Amazon Forest Local Development People of forest Light in the forest Stand up Forest

42 Solutions being implemented: Alternative Energy Programs Biofuel Program with participation of Petrobrás Alcohol + Biodiesel Eletrobrás has implemented in 2003 the Program for the Incentive to the Alternative Sources of Electricity (Proinfa), for a total of 3.3 GW of wind energy and biomass power plants as well as small hydroelectric. There is a research and development effort on alternative energy sources in universities and in the research centers (wave energy for instance).

43 The project of COPPE for electric energy generation from sea waves

44 Criticism and Proposal It is necessary to pay more attention to technology development aside the scientific research on climate change. It is necessary to think about a Climate Change Engineering not for science fiction solutions to avoid global warming by business as usual in energy consumption, deforestation,, etc. Climate Change Engineering must be devoted to find realistic solution: - changes in the intensive production and consumption pattern, according necessary public policies, - protect population against effects of climate change.