DEVELOPING THE ENERGY-RELATED BRAZILIAN NATIONALLY DETERMINED CONTRIBUTION (NDC) Workshop em modelagem e simulação de cenários de longo prazo no setor de energia e emissões de gases de efeito estufa associadas no Brasil São Paulo, January 30 th 2017 Jeferson Borghetti Soares Head Energy and Economic Department
SUMMARY BRAZILIAN NDC AND DOMESTIC ENERGY SECTOR SOCIO-ECONOMIC SCENARIO ELETRICITY CONSUMPTION & GENERATION FUEL CONSUMPTION ENERGY MATRIX, GHG EMISSIONS & INDICATORS CURRENT DEVELOPMENT ACTIONS
BRAZILIAN NDC AND DOMESTIC ENERGY SECTOR
BRAZILIAN NATIONALLY DETERMINED CONTRIBUTION (NDC) CONTRIBUTION Reduce greenhouse gas emissions by 37% below 2005 levels in 2025 SUBSEQUENT INDICATIVE CONTRIBUTION Reduce greenhouse gas emissions by 43% below 2005 levels in 2030 TYPE COVERAGE REFERENCE TIMEFRAME METRIC Absolute target in relation to a base year 100% of the territory, economy-wide, including CO 2, CH 4, N 2 O, perfluorocarbons, hydrofluorocarbons and SF 6 2005 Single-year target for 2025; indicative values for 2030 for reference purposes only 100 year Global Warming Potential, using IPCC AR5 values Brazil s NDC is economy wide and therefore is based on flexible pathways to achieve the 2025 and the 2030 objectives. In that sense, this presentation is meant to be for clarification purposes only.
BRAZILIAN NDC Energy Sector What is the level of effort for the Energy sector? The economic scenario and the commitment The role of energy efficiency New path for distributed generation Hydropower: the importance for the commitment
SOCIO-ECONOMIC SCENARIO
POPULATION Until 2030, Brazilian population increase - near 20 million, equivalent to current Australia population. GROWTH RATE (% p.y.) ASSUMPTIONS MILLION INHAB. 1.20% FORECAST 223.5 200.1 Growth rate (% p.y.) 2014-2025 0.67 2014-2030 0.60 0.36% Source: EPE
GDP SCENARIO ASSUMPTIONS Brazilian economy will be 1,7 times of 2014, growth rate of ~3,5% p.y. between 2014-2030. Growth Rate (% p.y.) 8.7% 2014-2025 ~3.0% 2014-2030 ~3.5% 6.2% 1.7% 2.5% 3.6% 2.2% 4.1% Source: EPE
11.5 15.0 16.6 17.0 21.1 21.5 23.7 30.5 31.4 31.6 36.0 38.5 49.6 GDP PER CAPITA Average growth rate - Brazilian GDP: 3.4% p.y., current levels of Chile and Spain ASSUMPTIONS 10³ US$ [PPP 2005] Level of Welfare Source: Brazil Data: EPE; International Data: IEA * International data of GDP per capita for 2014.
02/01/2015 16/01/2015 30/01/2015 13/02/2015 03/03/2015 17/03/2015 31/03/2015 15/04/2015 30/04/2015 15/05/2015 29/05/2015 15/06/2015 29/06/2015 13/07/2015 27/07/2015 10/08/2015 24/08/2015 08/09/2015 22/09/2015 06/10/2015 21/10/2015 05/11/2015 19/11/2015 03/12/2015 17/12/2015 04/01/2016 18/01/2016 01/02/2016 17/02/2016 02/03/2016 16/03/2016 11/04/2016 26/04/2016 10/05/2016 24/05/2016 08/06/2016 22/06/2016 06/07/2016 20/07/2016 03/08/2016 GDP GROWTH 2016 MARKET FORECASTS - Uncertainty 3,00 2,00 1,00 0,00-1,00-2,00-3,00-4,00-5,00 Evolução da projeção do crescimento do PIB de 2016 Fonte: Bacen, 2016. Boletim FOCUS
ELETRICITY CONSUMPTION & GENERATION
TOTAL ELECTRICITY CONSUMPTION FORECAST Electricity consumption in Brazil will be twice until 2030 (compared to 2014). Energy efficiency and distributed generation will have fundamental role. 1500 TWh 1200 900 1,019 68 95 1,253 105 119 The new paradigm 600 430 23 629 52 855 1,029 300 408 575 0 2005 2014 2025 2030 Electricity load Self-production (DG included) Energy Efficiency Source: EPE Note: Electricity load includes electricity consumption and losses
kwh/capita PER CAPITA CONSUMPTION OF ELECTRICITY FORECAST INTERNATIONAL COMPARISION Despite the increase of electricity per capita consumption, Brazil still remains far from current levels of OECD countries 18000 16000 Canada 14000 USA 12000 10000 South Korea 8000 6000 4000 2000 South Africa China Brazil 2014 Brazil 2005 Russia Greece Spain Chile Portugal Italy Brazil 2030 Brazil 2025 Argentina Mexico Japan Germany France United Kingdom 0 India Indonesia 0 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000 Source: Brazil Data: EPE; International data: IEA, 2015 US$ [2005] PPP/inhabitant/year (*)
ELECTRICAL EFFICIENCY For the NDC: Achieving 10% efficiency gains in the electricity sector by 2030. 1500 TWh FORECAST 1200 900 Note: Electricity load includes electricity consumption and losses 8% 68 95 10% 105 119 600 300 23 344 52 475 714 858 0 2005 2014 2025 2030 Interconnected System consumption Self-production (DG included) Energy Efficiency Source: EPE Note 1: Refers to total electricity consumption. Losses are not accounted for energy efficiency estimates. Note2: 2013 is the base-year.
DISTRIBUTED GENERATION FORECAST Distributed Generation contributes for about 10% of future electricity needs in Brazil 1500 TWh 1,253 1200 1,019 105 119 900 68 95 600 430 23 629 52 855 1,029 300 408 575 0 Source: EPE 2005 2014 2025 2030 Electricity load Distributed Generation Energy Efficiency
RENEWABLES IN ELECTRICITY SUPPLY For the NDC: Increasing the share of renewables (other than hydropower) in the power supply to at least 23% by 2030 (share of wind, biomass and solar) 2005 2% 12% 2025 2030 FORECAST 23% 24% 86% 64% 13% 60% 16% Other renewables Non-renewables Hydropower Share of renewables (other than hydropower) in 2030 BIOMASS 12% WIND 9% Source: EPE SOLAR 3%
RENEWABLES IN ELECTRICITY SUPPLY (% EXCLUDING HYDROPOWER) FORECAST 24.0% 23.0% 13.4% 9.0% 8.5% 5.7% 4.8% 3.8% 3.1% 2.1% 2.0% Brazil Brazil Germany Brazil United (2030) (2025) (2013) (2014) Kingdom Source: EPE (Brazil data); IEA (International data) (2013) World (2013) USA (2013) France (2013) India (2013) Japan (2013 Brazil (2005)
HYDROPOWER IN ELECTRICITY SUPPLY (TWh) FORECAST Electricity Generation 2014 2030 TWh % TWh % Hydropower 404 71 690 66 Natural Gas 72 13 76 7 Coal 11 2 17 2 Nuclear 15 3 39 4 Biomass 18 3 76 7 Wind 12 2 105 10 Solar (power plants) 0 0 26 3 Others 39 7 4 0,4 Biogas (distributed gen.) 0 0 3,1 0,3 Solar (distributed gen.) 0 0 9,4 1 Total 572 100 1.045 100 Source: EPE
FUEL CONSUMPTION
ETHANOL & GASOLINE CONSUMPTION FORECAST Equivalent gasoline consumption (Mtoe) 81.4 70.5 54.1 18.1 24.1 49% 9.8 11.0 38% 14.2 46% 15.5 33.4 62% 38.3 54% 41.8 51% 2014 2025 2030 Gasoline Anydrous Alcohol Hydrated Alcohol Source: EPE
BIODIESEL CONSUMPTION FORECAST Million m³ B7 65.4 2.6 B7 83.5 5.6 B10 97.3 9.5 62.8 77.9 87.8 2014 2025 2030 Source: EPE Diesel Oil Biodiesel
SHARE OF BIOFUELS IN TRANSPORTATION ENERGY CONSUMPTION FORECAST 23.7% 21.2% 18.4% 13.2% 10.0% 6.2% 5.0% 4.7% 2.7% 0.2% Brazil (2030) Brazil (2025) Brazil (2014) Brazil (2005) Source: EPE (Brazil data); IEA (International data) Note1: For Brazil, includes ethanol and biodiesel. Note2: Corresponds to biofuels and waste data. EU (2020 Target) France (2013) Germany (2013) USA (2013) United Kingdom (2013) India (2013)
ENERGY MATRIX, GHG EMISSIONS & INDICATORS
SHARE OF RENEWABLES ON ENERGY MATRIX FORECAST For the NDC: Achieving 45% of renewables in the energy mix by 2030. OECD (2012) 9 World (2014) 13.6 Brazil (2005) 44 Brazil (2014) 39 Brazil (2025) 45 Brazil (2030) 45 Source: EPE; IEA
SHARE OF RENEWABLES IN TOTAL PRIMARY ENERGY SUPPLY (TPES) EXCLUDING HYDROPOWER/ELECTRICITY For the NDC: Expanding the use of renewable energy sources other than hydropower in the total energy mix to between 28% and 33% by 2030. FORECAST 32.6% 31.9% 29.2% 28.0% 24.8% 11.2% 7.3% 7.2% 5.6% 5.5% 3.4% Brazil (2030) Brazil (2025) Brazil (2005) Brazil (2014) India (2013) Source: EPE (Brazil data); IEA (International data) Note: For Brazil, includes ethanol and biodiesel. For other countries corresponds to biofuels and waste Germany (2013) France (2013) World (2013) USA (2013) United Kingdom (2013) Japan (2013)
CURRENT DEVELOPMENT ACTIONS Energy Energy Research Research Office Office
EPE S CONTRIBUTION FOR BRAZILIAN NDC MAIN FOCUS CURRENT ACTIONS Renewable Power Generation Strenght the role of Hydropower Intermitent Sources (solar, wind) hydropower matrix in electricity Energy Efficiency Biofuels Studies for supporting Energy Efficiency Plan Biodiesel share increasing Biofuture Platform
DISTRIBUTED GENERATION Energy Energy Research Research Office Office
REGULATORY FRAMEWORK FOR DISTRIBUTED GENERATION IN BRAZIL REGULATRY FRAMEWORK FOR DISTRIBUTED GENERATION IN BRAZIL Net Metering Model was approved in Brazil in 2012; In 2015 there was a review of the regulation, which brought several improvements, as: higher power limit; new business models; reduced deadlines; standardization of procedures. Valid for any renewable and cogeneration source; Up to 5 MW (3 MW for hydropower).
ProDG Federal Program to foster renewable distributed power generation and cogeneration; Under the umbrella of the ProDG initiative, a working group (WG) has been created to identify means to meet the program objectives; It was divided into five specific working groups: Management Working Group WG Financing and Taxes WG Public Buildings WG Impact Assessment WG Commercialization WG Certification and Laborers Training Several recommendations were made by the working groups on track to be implemented.
VRES (Specif Value for DG) Set specific acquisition tariffs for electricity generated from some sources as solar photovoltaics and natural gas-based CHP Utilities can buy at higher prices than they buy from electricity auctions Electricity companies can contract through voluntary auctions and include all values in final consumer tariff Up to 10% of this total market
ENERGY EFFICIENCY Energy Energy Research Research Office Office
ENERGY EFFICIENCY 2030: ELECTRICITY CONSUMPTION Contribution the overall electrical efficiency by sector Agriculture 1% Transport 0% But considers also... Residential 30% Services 25% Contribution of each sector to the overall energy efficiency Industry 43% Some Residential 0% Agriculture 2% Possible mechanisms: Labelling programs Demand response Energy Efficient Buildings Energy Auditing Programs Autonomous actions Industry 45% Services 1% Transport 52%
MAIN ACTIONS IN ENERGY EFFICIENCY IN BRAZIL LABELLING PROGRAM NATIONAL PROGRAMS OF ENERGY CONSERVATION (ELETRICITY AND FUELS) UTILITIES ENERGY EFFICIENCY PROGRAM MINIMUM EFFICIENCY STANDARDS Standards 34
GENERAL APPROACH FOR ENERGY EFFICIENCY ENERGY EFFICIENCY PLANNING COST EFFECTIVE POTENTIAL CURVES PORTOLIO OF POLICIES AND MECHANISMS MONITORING AND ASSESSMENT OF RESULTS DATABASE 35 35
COST POTENTIAL CURVES FOR ENERGY EFFICIENCY ESTRATÉGIA DE INSERÇÃO DA EFICIÊNCIA ENERGÉTICA Econmic Feasibility Cost of Saved Energy (R$/MWh eq.) Incremental Incremental = CAPEX + OPEX - Energy price Energy Saving (MWh eq./year) Saved Energy
COST POTENTIAL CURVES FOR ENERGY EFFICIENCY ESTRATÉGIA DE INSERÇÃO DA EFICIÊNCIA ENERGÉTICA Developed Studies Iron & Steel Chemicals Ferro-alloys Pulp & Paper Ceramics Alumina Food & Beverages Cement Mining Commercial Buildings 37
MONITORING PROGRESS OF ENERGY EFFICIENCY ESTRATÉGIA DE INSERÇÃO DA EFICIÊNCIA ENERGÉTICA Evaluate impact of mechanisms and policies for Energy Efficiency in Brasil Subsidize Energy Plans (short and long term) Identify prioritizing areas to act Allow international comparison Assess current stage of energy efficiency in Brazil Energy Efficiency Indicators Database Monitor progress of energy efficiency
MONITORING PROGRESS OF ENERGY EFFICIENCY BANCO DE INDICADORES DE EFICIÊNCIA ENERGÉTICA HOUSEHOLD SECTOR AIR CONDITIONING FOOD CONSERVATION WASHING MACHINE Fonte: EPE (2014). Energy consumption in Brazil. Sectoral Analysis
MONITORING PROGRESS OF ENERGY EFFICIENCY BANCO DE INDICADORES DE EFICIÊNCIA ENERGÉTICA CONCLUDED RESULTS Stablishment of Energy Efficiency Indicators Database according to best practices (ODYSSSE) Publishing bi-anual reports on Energy Efficiency Indicators for Brazil Monitoramento e avaliação de resultados
POLICIES/MECHANISMS PORTFOLIO FOR ENERGY EFFICIENCY ESTRATÉGIA DE INSERÇÃO DA EFICIÊNCIA ENERGÉTICA Energy policies customization in order to help energy efficiency action plan Define feasible goal and scope of policy Survey on Best Practices POLICIES/ MECHANISMS Identify stakeholders and support strategy Define ex-ante and ex-post assessment of impact
COMMUNICATION STRATEGY: PORTAL BANCO DE INDICADORES DE EFICIÊNCIA ENERGÉTICA SCOPE Intends to be a bi-diretional chanell on energy efficiency information (data, studies etc.) Communication tool Partnership to collect data from stakeholders IN PROGRESS Conceptual project of website (concluded) Next steps: Programming development
THANK YOU FOR YOUR ATTENTION! Jeferson Borghetti Soares Head - Energy and Economic Department E-mail: jeferson.soares@epe.gov.br Phone number: + 55 (21) 3512 3194 + 55 (21) 3512 3334 Avenida Rio Branco, 1-11 o andar 20090-003 - Centro - Rio de Janeiro http://www.epe.gov.br/ Twitter: @EPE_Brasil Facebook: EPE.Brasil