Energy Efficiency in Brazil

Transcription

1 s Ricardo Lamenza General Director Energy Cluster Siemens Brazil Energy Efficiency in Brazil Hannover Messe April 11 th 2013

2 Did you know that Brazil is the 5 th biggest country in the world with 199 million inhabitants. is the 7 th largest economy in the world. will host the World Cup 2014 and the Olympic Games is the 3 rd largest producer of renewable energies in the world. largest producer of regional jets (Embraer). has solid and sophisticated financial systems. has the investment grades by Fitch, Standard & Poors and Moodys.

3 GWh per year Brazilian Energy Scenario Increase of electricity per class RESIDENTIAL % 6,4% % 6,4% % 4,4% % 5% % INDUSTRIAL ,0% % ,3% ,1% % COMERCIAL PUBLIC ,6% 6,0% 6,2% 7,9% ,7% ,9% ,0% ,2% % +21.2% Source: EPE Increase in energy consumption has been driven by the economic growth in all sector emphasizing the need for energy efficiency investments.

4 Brazilian Energy Scenario Energy Consumption per capita Energy Consumption Per Capita* As a developing country, Brazil has been increasing its energy consumption per capita. *MWh per person per year Brazil s high cost of energy and it s increasing energy consumption affects the country s competitiveness in international markets. Energy efficient is needed to improve the use of available resources. *USD/MWh Energy Prices

5 Energy waste in Brazil Energy consumed to generate 1 dollar of GDP Entire Economy Industrial Sector 0,27 0,24 0,18 0,20 0,17 0,19 0,07 0,07 0,08 0,09 0,09 0,11 0,14 0,09 0,11 0,12 0,12 0,13 0,13 0,13 Mexico UK Germany France Japan Argentina USA India Brazil China UK Germany Mexico Japan Argentina France Brazil USA India China Energy Consumed in tons of oil equivalent for 1 ton of product These important sectors in Brazil have presented great energy saving rates from 1980 to 2012, but compared to other countries they are still ineffective. Steel Paper 0,79 0,92 1,01 0,31 0,37 0,41 0,44 0,53 0,70 0,25 0,40 0,50 South Korea USA Japan China Brazil Russia Germany Finland Sweden Russia Canada Brazil

6 In % of Electrical Energy Generation Brazilian Energy Scenario Electrical Losses in Transmission and Distribution India Brazil World China 5 United States Germany 0 Source: World Bank Brazil has one of the highest energy loss indexes in transmission and distribution (17%) More than 14 GW could be saved if Brazil was in the same efficiency level of developed Countries

7 Energy Efficiency in Brazil Steps taken to reduce consumption losses Energy Efficiency Law / 2001 Created to establish a general energy efficiency program in order to reduce energy consumption of Machines & Equipments for any kind of application (e.g. households, Industrial Plants) So far the regulation established mandatory energy efficiency certification only for some products (e.g. industrial motors) There is still no specific regulation in order to foster energy efficiency in industrial process. There are Voluntary certification processes as: Energy efficiency for Building INMETRO regulation (40% of Brazilian energy consumption comes from edifications) Label Procel allow products labeling which reach higher performance than the requested in the regulations (e.g. industrial motors, household appliances) Energy Suppliers R&D and Energy Efficiency investments Law / 2000 Mandatory that energy suppliers invest 0.75% of their net revenue in energy efficiency programs or R&D programs

8 Energy Efficiency in Brazil Market demands efficiency increase in GTD Country-specific challenges Innovative technologies Energy mix in power generation Economic efficiency Auction Systems Customerspecific solutions Conventional power plants Renewable energies Fuel Costs Consump. Efficiency Reliable power supplies Long Distance Power Lines Energy storage, management of balancing power and consumption Country s industry competitiveness can only be achieved through reliable and efficient Energy systems

9 In MW Energy Efficiency in Brazil Energy mix diversification as main challenge Power Generation Trends Installed Base The Transmission Grid % 61% 2% 6% 10% 8% 2% 6% 5,6% 2% 0% % 56% 8% 4% 3% 14% 7% 2% 4% 1% Small Hydro Hydro Wind Coal Oil Gas Biomass Nuclear Solar Imports MAN AP/ BV(a) AC/ RO Existent Interconnexion Expansion Bid Planned Expansion BM TP IT S IV N IMP SE/ CO NE Increase in Gas Power Generation to compensate Wind and Hydro without reservoirs Generation expansion in North and Northeast pushing for long distance transmission lines

10 Energy Efficiency in Brazil So what needs to be done for GTD in Brazil? Fossil Power Wind Power Flexibility and High Efficiency Cost optimization and higher efficiency Oil & Gas Secure and reliable sub-sea grids Transmission Flexible and efficient Super Grids

11 Energy Efficiency in Brazil Market uncertainties MP579 Energy Supply Risk Auction Model Government Government s MP579 forcing energy price reduction: incentive for consumption increase Energy supply insecurity pushing for urgent measures. GTD efficiency in second plan as it demands long term plans Energy auctions model creating price pressure. No premium for efficient technologies Government must act as enabler for GTD efficiency while developing local industry

12 Siemens Brazil Jundiaí Factories The largest energy complex in South America Jundiai Jundiaí Industrial Complex Key Figures Data employees (Basis: Sep/2012): White Collars 887 Blue Collars 74 Apprentices + 4 Trainees 111 Interns Start of Operation 1978 Total Area: 190,000 m2 Constructed Area: 99,000 m2 TRANSFORMERS HIGH VOLTAGE PRODUCTS TRANSMISSION SYSTEMS INDUSTRIAL POWER TURBINES LOW AND MEDIUM VOLTAGE PANELS SMART GRID AUTOMATION SMART GRID SERVICES LARGE DRIVES ,000 MVA 1,000 CB + 3,000 DS 19,000 capacitors/ year 30 Turbines/ year Circuit Breakers 3,000 switchgears: 3,600 (air and gas) 700 OVCB 800 Panels O&M, PRS, PTI, VAS, Smart Metering 180 drives/ year Brazilian industry is prepared to manufacture sophisticated equipment locally

13 s Thank you!

14 Back Up

15 Siemens Energy Sector Answers for Brazil s challenges Efficient long distance lines World record 800 kv for direct current transmission Efficient thermal generation World record 60.75% efficiency in combined cycle power plants The world s most powerful HVDC transmission line with 800 kv voltage in China transports around 5,000 mega-watts of electricity from the hydro power plants in Yunnan Province over 1,400 kilometers to the urban centers in Guangdong Province. This saves 30 mega-tons of CO 2 every year. The combined cycle power plant in Irsching Block 4 achieved an efficiency rating of percent in a test run. The heart of the plant is the innovative SGT5-8000H gas turbine from Siemens, with a nominal capacity of 375 MW. The power plant beats all previous records in capacity, efficiency and operating flexibility.

16 Siemens Energy Sector Answers for Brazil s challenges Modernization of existing resources Additional 200 MW through modernization in 2011 Efficient and reliable renewable sources New performance dimensions 6 MW for wind turbines Through the modernization and upgrading of gas and steam power plants worldwide, Siemens achieved 200 additional megawatts of capacity in 2011 with the same fuel consumption. The new 6-megawatt wind turbine from Siemens is especially light at 350 tons, and thus offers both higher performance as well as advantages of substantially lower costs in its class.

17 Brazil at a glance South America Colombia Venezuela Guyana Suriname French Guyana Brazil Population (mn persons) 199 Capital Brasilia Change (% p.a.) 0,8 Area, thousand km² Density (persons per km²) 23,4 Country classification (IMF) emerging Ecuador ECONOMIC ENVIRONMENT 2013: Peru Bolivia Brazil Brasília Total and industrial GDP growth: ~ 3.5%; Retail sales rebound and inventories falling will contribute to domestic demand, with: Low unemployment: 5.5%; Chile Argentina Uruguay Real wage mass increasing: 5.0%; Lower real interest rates (< 2.0% p.a.) should increase investments; Credit expansion (> 50% of GDP); Inflation relatively under control: ~ 5.5%;

18 Emerging countries are the target of the planned Investments of multinational companies Planned investments of multinational companies, by country (%) Russia: 18% Mexico: 15% China: 31% India: 24% Brazil: 21% - Multinational expectations (% of total) on emerging markets in 2013: 79% expects a revenue growth (35% for advanced countries). 68% expects higher profits (19% for advanced countries). 41% intends to increase R&D expenses. Source: International Business Report Grant Thornton / Prepared by: Chief Economist Siemens Brazil

19 Source: Chief Economist Siemens Brazil. Attractiveness: Brazil has improved its relative position, but still remains far from the top World s economies Brazilian Advantages* Market Size Soundness of Banks Agricultural costs Financial Services Production Sophistication # 9 # 14 # 17 # 26 # 33 Global Competitiveness Report - WEF* Country Ranking South Korea China Turkey Brazil Indonesia South Africa Key Challenges for Brazil** Business Environment (Institutions***) Infrastructure Education Work Efficiency Innovation # 79 # 70 # 66 # 69 # 49 Mexico India Russia * Brazilian position by each competitiveness factor In World ranking, surpassing even other emerging countries. ** Brazilian position by each competitiveness factor in World ranking. *** especially regarding bureaucracy. Source: WEF The Global Competitiveness Report / Prepared by: Chief Economist - Siemens Brazil

20 Interim Measure / 3 rd tariff review cycle Trends MP 579 The MP 579/2012 authorizes the extension of contracts that expires until 2017 for power GTD. Trends 3 rd Tariff Review Cycle Every four years the rates charged by distribution fees undergo review by ANEEL. 20% of generation 67% of transmission 35% of distribution ~20% Reduction on tariff The concessionaires must agree to withdraw, from the electricity tariff, the return on investments already amortized. The interim also reduces the incidence of industry charges on electricity tariff. ANEEL s grip over energy tariff for GTD The Aneel analyzes the revenue and expenditure of these companies with the goal of finding a balance between business profitability and consumer price. Current RAP Impact Future RAP R$ 9,2 bi R$ 3,5 bi* * Considering O&M, charges & taxes 62% Reduction On RAP High Voltage Low Voltage Consequence for Siemens Uncertainties for the future until a more detailed definition of the Interim Measure by Aneel. Risk of decrease on customer s investment level in the short period. 10,51% 0,07% 9,41%

21 Why has Brazil GDP been growing slowly in 2012? International: European crisis; U.S. slowly recovery; Chinese slowdown. National: Industry: BRL / USD overvalued is still harming the competitiveness; Private investments postponed; Public investments delayed due to inefficient management; Despite default has increased ( ); Exports decreasing; Agribusiness production breakdown, mainly in South and Northeast. Source: Chief Economist - Siemens Brazil

22 Source: Chief Economist Siemens Brazil Why will Brazil GDP grow faster from 2013 on? International: Economic activity rebound (USA, China); Low interest rates in long-term; Foreign direct investments searching markets with high growth. National: Domestic demand recovery with sales increasing & inventories decreasing; Real interest rates diminishing ( < 2.0% p.a.); Credit expansion (> 50% of GDP in 2013); BRL / USD devalued (around BRL 2.00 ~ 2.10 per USD in ); Inflation under control ( ~ 5.5%); Low unemployment rate & increased real wage mass; Measures to foster local value added.

23 Brazil: macro impacts to businesses Source: Chief Economist - Siemens Brazil Markets growth above the GDP; Risk of delays in planned projects; Local value added and innovation are competitive advantages: Industrial and competitiveness policies; Protection measures ( "Buy Brazilian Act", etc.); Increasing competition - new players in the market: Price and margin erosion; Capital concentration (M&A); New costumers profile (Y Generation, Middle Class C,D, etc); New Brazilian emergent markets - regional development. Rising demand for efficiency and sustainable solutions; Increased need for qualified workforce; Business model revolution : PPP, BOT, etc; Projet Finance, Private Equity, etc...

24 MWh per person per year Brazilian Energy Scenario Energy Consumption per capita As a developing country, Brazil has been increasing its energy consumption per capita

25 US$/MWh Brazilian Energy Scenario Average Energy Prices Brazil high cost of energy is affecting the country s competitiveness.