THE ENERGY MARKET IN BRAZIL Seminar: El desafío energético del Siglo XXI La estrategia de los países vecinos frente a la crisis energética Mauricio T. Tolmasquim CEO Energy Research Office - EPE May 18 th, 2010 Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 1
ENERGY SUPPLY STRUCTURE IN BRAZIL: AN EXAMPLE FOR THE WORLD Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 2
ENERGY SUPPLY STRUCTURE: BRAZIL X WORLD BRAZIL 2009 Sugar Cane 18.1% Oil 37.8% Biomass (*) 13.9% Hydraulic Energy and Electricity 15.3% Uranium (U 3 O 8 ) 1.4% Natural Gas 8.7% Coal 4.8% Uranium (U 3 O 8 ) 5.9% Hydraulic Energy and Electricity 2.0% OECD 2008 Renewables (*) 5.2% Oil 37.8% (*) includes firewood, charcoal and other Renewables in the Energy Matrix = (Hydraulic + Sugar Cane Products + Biomass) = 47.3% Coal 20.9% Natural Gas 23.7% (*) includes renewable fuels, waste, solar power, wind power, geothermal and other Sources: EPE [BEN 2010 - Preliminary Results] and IEA [Key World Energy Statistics - 2009] Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 3
QUALITY OF THE ENERGY MATRIX: BRAZIL X WORLD OECD Countries (2008) 7.2 92.8 World (2007) 12.7 87.3 Brazil (2009) 47.3 52.7 Renewable 0% 20% 40% 60% 80% 100% Non-Renewable Sources: EPE [BEN 2010 - Preliminary Results] and IEA [Key World Energy Statistics - 2009] Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 4
ELETRIC POWER SUPPLY STRUCTURE: BRAZIL X WORLD WORLD 2007 Hidráulica Hydraulic ³ 85.0% 85,0% BRAZIL 2009 Natural Gas 20.9% Coal 41.5% Wind Eólica 0.24% 0,24% Biomassa (*) (*) ² 5.4% 5,4% Derivados de Oil Petróleo 2.9% 2,9% Nuclear 2,5% 2.5% Gás Natural Natural Gas 2,6% 2.6% Carvão e Derivados ¹ Coal 1,3% 1.3% 90.6% Renewable Nuclear 13.8% Hydraulic 15.6% Other 2.6% 18.2% Renewable Oil 5.6% (*) mainly generated from the co-generation with sugar cane Sources: EPE [BEN 2010 - Preliminary Results] and IEA [Key World Energy Statistics - 2009] Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 5
CHALLENGES FOR IMPROVING THE ENERGY SYSTEM How is the energy system that we want Energy security Affordability Sustainability (social, economic and environmental) Resiliency to energy prices volatility Diversification of sources Efficiency in the production and consumption TECHNOLOGY Main conditions to consider Current energy system Resources availability Economic endowment Social conditions Priorities and solutions strictly related to country profiles Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 6
TECHNOLOGY CHOICE: BEST FIT FOR THE RIGHT GOALS TECHNOLOGY CHOICE Hydro plants Best fit technologies Alternative Renewables Oil offshore E&P Bioenergy from sugarcane Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 7
huge system strongly interconnected hydro predominance BRAZILIAN POWER SYSTEM Users(1) Energy supply(2) 65.5 million (55.9 million households) 509 TWh (includes 42 TWh from Itaipu Paraguay share) (about 60% of South America) (France, 2007: 513 TWh) growing market Peak Load (3) 70,450 MW (Italy: 54,100 MW; France: 86,300 MW) Sources: EPE, ONS (1) National interconnected system + stand-alone systems (Dec, 2009) (2) National interconnected system + stand-alone systems (2009) (3) National interconnected system only (Feb, 2010) Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 8
BRAZILIAN POWER SYSTEM: GENERATION Hydropower plants in Brazil > 6,000 MW > 2,000 MW > 1,000 MW < 1,000 MW Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 9
BRAZILIAN POWER SYSTEM: TRANSMISSION Source: EPE (PDE 2019) (Dec, 2009) Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 10
Brazil has the third biggest hydro potential of the world... Estimated Brazilian hydro potential 260 GW 1.200 TWh/year BRAZILIAN HYDRO POTENTIAL Others, 44% China, 13% Russia, 12%... however only one third of it has been developed Brazil, 10% 66% 34% USA, 4% Congo, 5% India, 5% Canada, 7% in operation or under construction to develop Source: Tolmasquim, M. (coord). Geração de Energia Elétrica no Brasil. Ed. Interciência, 2005. Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 11
DEVELOPED COUNTRIES HAVE ALREADY USED MOST OF THEIR HYDRO POTENTIAL % of technical potential Notes: 1. Based on data from World Energy Council, considering plants in operation and under constructions, at the endd of 1999. 2. In the case of Brazil, based on data from EPE and Atlas de Energia Elétrica do Brasil, published by ANEEL. In the case of China, based on data from Worldwatch Institute. 3. Selected countries have 2/3 of developed world hydro potential. Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 12
MOST OFBRAZILIAN HYDRO POTENTIAL TO DEVELOP IS ON THEAMAZONBASIN Hydro potential to develop Amazon basin, 59% Total hydro potential Amazon basin, 42% Amazon biome area as percentage of Brazilian territory 41% Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 13
BRAZILIANAMAZON OCCUPATION (environmental protected areas and indigenous lands) Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 14
AMAZON HYDRO POTENTIAL DEVELOPING: ENVIRONMENTAL CONCERNS Spawning Chanel fishes swim upstream Chanel entrance Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 15
AMAZON HYDRO POTENTIAL DEVELOPING: THE CASE OF THEMADEIRARIVERHYDROPOTENTIAL minimization of environmental impacts only one dam solution low fall power plants Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 16
AMAZON HYDRO POTENTIAL DEVELOPING: THE CASE OF THEMADEIRARIVERHYDROPOTENTIAL only one dam solution minimization of environmental impacts reservoirs were limited at level a little higher than natural level of the river low fall power plants Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 17
BELO MONTE POWER PLANT XINGU RIVER BASIN OLD VS NEW INVENTORY UHE KAIAPO UHE SÃO FÉLIX UHE POMBAL UHE IPIXUNA Old Inventory (80 s) UHE BABAQUARA UHE ALTAMIRA UHE BELO MONTE UHE KARARAO Source: Eletrobras [ Hydroelectric Inventory of the Xingu River Basin - October 2007 ] Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 18
BELO MONTE POWER PLANT XINGU RIVER BASIN OLD VS NEW INVENTORY UHE KAIAPO UHE SÃO FÉLIX UHE POMBAL UHE IPIXUNA Old Inventory (80 s) New Inventory (2007) UHE BABAQUARA UHE ALTAMIRA UHE BELO MONTE UHE KARARAO Source: Eletrobras [ Hydroelectric Inventory of the Xingu River Basin - October 2007 ] Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 19
AMAZON HYDRO POTENTIAL DEVELOPING: THE CASE OF THEBELOMONTEHYDROPROJECT Capacity = 11,233 11,000 MW Reservoir = 1,225 516 km 22 Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 20
AMAZON HYDRO POTENTIAL DEVELOPING: NEW CONSTRUCTION SCHEME Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 21
TECHNOLOGY CHOICE: BEST FIT FOR THE RIGHT GOALS TECHNOLOGY CHOICE Hydro plants Best fit technologies AlternativeR enewables Oil offshore E&P Bioenergy from sugarcane Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 22
BIOMASS FROM SUGARCANE IS AN EFFECTIVE ALTERNATIVE Sugarcane has a high energetic content 153 kg sugars and ethanol 608 x 10 3 kcal 35% 276 kg bagasse (50% humidity) 598 x 10 3 kcal 35% 1 ton sugar cane 1,718 x 10 3 kcal 165 kg cuts & leaves (15% humidity) 512 x 10 3 kcal 30% 1 crude oil barrel 1,386 x 10 3 kcal 1 ton sugar cane = 1.2 crude oil barrel Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 23
BIOMASS IS AN EFFECTIVE ALTERNATIVE Brazil has a huge bioenergy potential (biofuel and bioelectricity) Favorable geographic and natural conditions land availability for agriculture soil characteristics climate conditions (sun, rain, etc.) Technology developed ethanol cogeneration from bagasse other uses Low production cost Sources: Henniges, O.;Zeddies, J.: Fuel Ethanol Production in the USA and Germany a cost comparison, F.O. Lichts World Ethanol and Biofuels Report, vol 1, nº 11, 11/02/2003. Country/Region Ethanol Production Cost (US$/liter) Brazil 0.22-0.28 United States 0.30-0.35 European Union 0.45-0.55 Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 24
TECHNOLOGY IS RELEVANT FOR BIOENERGY STRATEGY Because technology provides Managerial agricultural practices Sustainable crops Plant variety selection Maintenance of disease-free crops and biomass Efficient harvesting transport and storage Control of the plant's maturity and crop's harvest period Minimization of losses Efficient industrial converting process Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 25
SUGAR CANE PRODUCTIVITY(t/ha) Source: EPE based on data from MAPA and on PDE 2019 Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 26
LAND OCCUPATION INBRAZIL 10 6 ha Amazon Forest and Protected Areas 405 Cities, lakes and roads 20 2,4% 4,5% Production areas 388 25,9% Pasture 220 Agriculture 72 47,6% 45,6% 7,3% Cultivated forest 5 0,5% Available areas 91 10,7% Other uses 38 BRAZIL 851 Source: MAPA, 2006 (Plano Nacional de Agroenergia 2006-2011 Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 27
BRAZIL. LIGHT VEHICLES SALES 100% 75% 50% 25% Flex-fuel E-100 Gasoline 0% 1990 1995 2000 2005 Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 28
BRAZILIAN LIGHT VEHICLES FLEET EVOLUTION 50 40 Gasoline Ethanol Flex fuel 40 icles Million light vehi 30 20 37% 10 25 78% 0 2009 2011 2013 2015 2017 2019 Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 29
ETHANOLPRODUCTION(billionlitres) Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 30
TECHNOLOGY CHOICE: BEST FIT FOR THE RIGHT GOALS TECHNOLOGY CHOICE Hydro plants Best fit technologies AlternativeR enewables Oil offshore E&P Bioenergy from sugarcane Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 31
10-YEARENERGYEXPANSIONPLAN, 2010-2019 Renewable sources (wind power, bioelectricity, small hydro plants) 25.000 Installed capacity, MW 20.000 5.000 4.000 15.000 3.000 10.000 5.000 2.000 Added capacity, MW 1.000-2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 0 Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 32
SUGAR CANE COGENERATION POTENTIAL 20 GW 17,4 15 10 10,5 5 0 2010 2012 2014 2016 2018 Source: EPE (PDE 2019) In ten years, estimated cogeneration potential from sugarcane will be about 90 TWh/yr (18% of current Brazilian power supply) Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 33
COMPLEMENTARITY BETWEEN HYDRO GENERATION AND BIOELECTRICITY 120 100 80 GWme ed 60 40 20 0 Jan Fev Mar Abr Mai Jun Sugar-cane biomass Jul Ago Set Out Nov Dez Hydro generation Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 34
BRAZILIAN WIND POWER POTENTIAL 143.5 GW (50m) higher potential Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 35
BRAZILIAN WIND POWER INSTALLED CAPACITY MW 3.500 3.000 2.500 2.000 Sources: 2003-2007: Atlas de Energia Elétrica, 2ª ed.. Brasília: ANEEL, 2005. 2008: World Wind Energy Report 2008. Bonn, Germany: WWEA, 2009 2009: ANEEL, 2010 (website) 2010-2012: Plano Decenal de Expansão de Energia, EPE, 2010 1,36 68 MW 3,173.7 MW 1.500 1.000 500 0 22 MW 236.9 MW 338.5 MW 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 36
p.u COMPLEMENTARITY BETWEEN HYDRO AND 1,6 1,4 1,2 1,0 0,8 0,6 0,4 WIND GENERATION Wind annual cycle Sazonalidade da geração eólica 0,2 Jan Fev Mar Abr Mai Jun Jul Ago Set Out Nov 2,2 Dez 2,0.. u p 1,8 1,6 1,4 1,2 1,0 0,8 0,6 0,4 0,2 CE RN BA RS Wind and water cycles are negatively correlated in the whole country but South Water annual cycle Vazões naturais afluentes Jan Fev Mar Abr Mai Jun Jul Ago Set Out Nov Dez Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 37 ITÁ TUC PCO PAF
THE NEW ENERGY AUCTIONS 2005-JULY/2010 THE SHARE OF THE ALTERNATIVE RENEWABLE SOURCES LNG 1,698 MW; 4% COAL 1,760 MW ; 4% DIESEL 617 MW; 2% GAS PROCESS 490 MW; 1% NATURAL GAS 508 MW ; 1% WIND 1,805 MW ; 4% OIL 7,502 MW; 18% % Total Supply [ 41,458 MW ] ALTERNATIVE RENEWABLES CONTRACTED 5.643 MW [ 14% ] BIOMASS 3,477 MW; 9% SMALL HYDRO 362 MW; 1% HYDRO 23,240 MW; 56% Source: EPE Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 38
NATIONAL POWER CAPACITY EXPANSION - 2010-2019 10000 Contracted Expansion 63.482 MW Planned Expansion 9000 41,145 MW 22,337 MW 8000 7000 6000 5000 4000 3000 2000 1000 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 FONTES ALTERNATIVAS Alternative Renewable 3985 776 2044 1150 1350 1250 850 800 1100 1350 URÂNIO Uranium 1405 FONTES Fossil Fuel FÓSSEIS 3157 2830 1446 4742 HIDRO Hydro 1716 2314 812 2205 1071 1890 3419 2444 2444 2444 110 3086 2401 1231 2003 5656 23.1% 2.2% 19.2% 55.5% Source: EPE (PDE 2019) Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 39
TECHNOLOGY CHOICE: BEST FIT FOR THE RIGHT GOALS TECHNOLOGY CHOICE Hydro plants Best fit technologies AlternativeR enewables Oil offshore E&P Bioenergy from sugarcane Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 40
EVOLUTION OFBRAZILIANOILRESERVES Before Petrobras Onshore E&P Offshore E&P shallow water Offshore E&P deep water (< 300 m) (> 300 m) Billion boe Source: EPE based on data from Petrobras Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 41
OIL& GASEXPLORATION ANDPRODUCTION: THE ROLE OF TECHNOLOGY 124m 293m 492m 781m 1.709m 1.853m 1.886m 2.172m water depth Enchova Piraúna Marlim Marimbá Marlim Sul Roncador drilling depth Tupi Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 42
BRAZILIAN CRUDE OIL PRODUCTION POTENTIAL FORECASTS, DETACHING THE PRE-SALT RESOURCES CONTRIBUTION 6 5 5.11 million ba arrels per day 4 3 2 1 2.26 2.20 EXTRA PRE-SALT PRE-SALT 2.64 2.47-2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: EPE (PDE 2019)
OIL PRODUCTION AND DEMAND FORECAST INBRAZIL 6 10 6 bbl/day MILHÕES DE BARRIS/DIA 5 4 3 2 1 0 EXCEDENTE SURPLUS DEMANDA PRODUCTION DEMAND 2010 2012 2014 2016 2018 Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 44 2.2 Source: EPE (PDE 2019) ANO year In ten years: Production can be higher than 5 million bbl per day Surplus can be higher than 2 million bbl per day
BRAZILIANOILBALANCE TOWARDS SELF-SUFFICIENCY AND FURTHER 10 3 bblper day 2.500 star-up of Tupi production (Santos basin, pre-salt) 2.000 1.500 1.000 500 world oil crisis Albacora (1984) and Marlim (1985) discoveries 0-500 -1.000-1.500 1 st phase of Campos basin production (1980) start-up of Roncador production (1999) start-up of Jubarte production (2007) 1 st phase of pre-salt Source: Based on data from Petrobras Mauricio Tolmasquim, 33rd IAEE Intl Conference. The Rio 2010 Conference 45
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