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BRAZIL: Sugarcane’s Electrical Potential Goes to Waste

Mario Osava

RIO DE JANEIRO, Sep 3 2010 (IPS) - Sugarcane could replace the energy produced by three hydroelectric dams like the Belo Monte in the Amazon, claims the Brazilian sugarcane industry, which remains relegated to marginal participation in the national electricity matrix.

Brazil’s sugarcane straw and pulp could generate 12,200 megawatts, while the Belo Monte dam, to be built on the northern Amazonian Xingú River, will generate just 4,571 megawatts on average, according to UNICA, the sugarcane industry association, in the southern state of São Paulo.

UNICA members concentrate about 60 percent of sugar and ethanol production in this country, a world leader in biofuels.

The Belo Monte dam will in fact have a maximum capacity of 11,233 megawatts, but can only guarantee 40 percent of that because its reservoir will not store great volumes of water, and the flow of the Xingú declines sharply during the dry season — which lasts most of the year. These factors of fluctuation, which affect all hydroelectric dams in the Amazon, are particularly marked in this case.

One advantage of electricity generated from plant biomass like sugarcane is precisely its ability to complement hydro-energy, given that the cane harvest — between April and November — coincides with the period of least rain in which the dams have to reduce energy production.

In addition, sugarcane is grown closer to the large urban areas where the energy is consumed, bypassing the need for long and costly electrical transmission lines from the distant Amazon, which also increase the risk of blackouts and drive up electricity costs for consumers.

Sugarcane pulp and straw provide relatively clean energy, making use of plant waste with environmental advantages over other sources that produce greenhouse-effect gases, or otherwise flood or occupy vast areas of land.

But according to Zilmar de Souza, a UNICA consultant on the issue, the potential of this so-called bioelectricity is being lost due to the lack of a specific policy that takes into consideration the need for and benefits of this alternative source.

The three biggest obstacles to the development of bioelectricity are the prices (which do not offset the investment necessary for competitive production), the costs of connecting to the electrical matrix, and the lack of a programme that ensures demand over the long term, Souza told IPS.

There are some 440 plants in Brazil that produce sugar and ethanol, and use the sugarcane pulp to supply their own electrical needs. But just 100 produce surplus electricity to “export” to the market, he said.

Many, especially in São Paulo state, need to re-fit their plants in order to enter the electricity market, a cost they will only take on if they can be guaranteed adequate conditions and payments. Because current supply is high, the long- term contract prices are low, Souza explained.

Furthermore, connecting to the national integrated electrical system adds costs that undercut competitiveness for energy plants with limited capacity, like the sugarcane mills and their few megawatts, unlike the mega-dams, even though the latter rely on thousands of kilometres of transmission lines.

The connection is the responsibility of the energy producer, though the Belo Monte dam was given an exemption, adding another factor of unequal competition, he complained.

Without the security of regular growth in demand, it’s not just the sugarcane industry but the entire chain of production, including manufacturers of thermoelectric generating equipment, is left unable to plan their actions, he said.

The Ester power plant, in Cosmópolis, 130 km from the city of São Paulo, was only able to begin selling cane-based electricity in June, one year after it had first intended, because it was not until 2010 that it received a new boiler — after waiting two years, said Antonio Alves, sugarcane unit coordinator at the plant.

The usual wait is three years, he said, but Ester benefited from cancelled orders as others suffered the effects of the international financial crisis. Furthermore, the shorter distance of the electrical network — 2.5 km — brought down the cost of the connection.

The power plant’s potential of 22 megawatts will be expanded in a second phase, making use of sugarcane straw. The company burns just one-quarter of the cane in the harvest process, and has to eliminate that practice by 2014, a goal set by São Paulo environmental authorities.

Ester is an exception. The sugarcane industry captured just 16 percent of the 1,159 megawatts auctioned last week by the National Electrical Energy Agency (a regulatory body) through long-term contracts.

Seventy wind energy plants came away with 78 percent of the energy contracted for 15 to 30 years, offering the lowest costs. The cane growers blame the result on unequal conditions, such as the tax breaks given to the wind energy industry.

The sugarcane producers are calling for exclusive auctions for bioelectricity, avoiding competition between alternative energy sources that benefit the environment and the efficiency of the electrical network in different ways.

In any case, by 2020 sugarcane will represent 14 percent of Brazil’s energy matrix, predicts UNICA president Marcos Jank in his speeches and news editorials. He bases his optimism on environmental and climate policies and treaties, which will drive production of ethanol, and therefore, biomass.

According to his projections, Brazil will harvest 70 percent more sugarcane in 10 years, surpassing one billion tonnes, and will produce 65.3 million litres of ethanol — more than twice the current output — and 45 million tonnes of sugar, one-third more than today.

The energy authorities have declared their interest in fomenting bioelectricity, but only expect a slight increase in its participation in the national matrix, from 4.8 to 5.1 percent, according to the Ministry of Energy’s 10-year plan for 2010-2019.

However, “it’s just a matter of time” before biomass shows its true electrical potential, according to Delcio Rodrigues, energy consultant for Vitae Civilis, a non-governmental organisation specialising in climate change issues.

The sugarcane industry, which took decades to consolidate the national ethanol market and has yet to do so abroad, cannot replace its equipment quickly enough, said Rodrigues.

For Robert Araujo, of the non-governmental Institute for Strategic Development of the Electrical Sector – Ilumina, the greatest obstacle is Brazil’s energy model, which is too complicated and irrational. It increases the costs of electricity even though nearly 80 percent comes from hydroelectric dams, and it does not reward the systemic and environmental advantages of biomass.