ENERGY-BRAZIL: Electricity Imports Climb Sharply

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Jul 28 2000 (IPS) - Contracts already signed indicate that Brazil will increase its electricity imports by at least 440 percent over the next three years. Imports began to climb in June with the acquisition of a capacity of 1,000 megawatts from Argentina, the local regulatory agency reported.

There are no limits or restrictions on imports of electricity, and the prospect of growing dependence on supplies from abroad “does not worry us,” the director-general of the National Agency of Electric Energy (ANEEL), José Mario Miranda Abdo, told international correspondents Thursday.

By 2001, another 1,000 megawatts should be coming in from Argentina, 250 from Bolivia, 70 from Uruguay and 200 from Venezuela. To that will be added 3,000 megawatts from Argentina, to be imported in 2002 and 2003 by Tradener, a company in southern Brazil which has already been given the go-ahead by ANEEL.

The agency is also studying applications from five distributors interested in purchasing a combined total of 3,400 megawatts from several neighbouring countries. Part of that additional capacity may be available as early as next year.

If all of the plans in the pipeline go ahead, Brazil will be importing 8,800 megawatts a few years from now — 13 percent of the country’s current installed capacity, estimated by Abdo at around 68,000 megawatts/hour.

Around 6,000 megawatts from the giant Itaipú dam and hydroelectric plant — energy that formally belongs to Paraguay, but is mainly consumed by Brazil — are not included in that estimate.

The two countries share the electricity generated by the Itaipú dam, on the Paraná river forming part of the border between the two South American countries, although Paraguay consumes only a tiny portion.

Brazil is negotiating imports of another 400 megawatts from Paraguay, as part of a three-way deal. Through a transmission line, Asunción would receive its power supplies from Yacyretá, a dam owned jointly by Paraguay and Argentina, leaving free 400 megawatts produced by Itaipú for Brazilian consumption.

Imports are necessary to meet growing demand, which in the past decade has risen by an average of 4.5 percent a year and is still climbing, thanks to the revitalisation of the economy. Some analysts say demand will begin to expand by six percent this year.

Brazil’s energy sector is in the midst of a transition, with privatisations and the diversification of sources, Abdo pointed out.

ANEEL was set up in December 1997 as the state’s standard- setting and regulatory agency. It is autonomous, and does not always see eye to eye with the government.

The economic crisis of the 1980s interrupted an ambitious plan to expand the electricity grid, designed for a fast-growing country with prospects very different from those offered by Latin America’s so-called “lost decade”.

By 1995, work on 23 power plants had come to a standstill, and work had not yet begun on an additional 33 authorised projects. Nearly the entire sector was in the hands of the state.

Of the 23 projects half-finished in 1995, 13 have been completed — “with two-thirds private capital” — five are still being built, and solutions are being sought for the rest, said Abdo.

But the delay in the construction of a number of hydroelectric plants raised the spectre of an energy deficit in Brazil, and the coming year will be critical for the sector, independent experts warn.

Rationing will become inevitable by yearend, if black-outs are to be avoided, said physicist Luiz Pinguelli Rosa with the post- graduate engineering programme at the Rio de Janeiro Federal University.

The director of ANEEL, however, predicts “normal” supplies. As well as the increased imports and the completion of several hydroelectric plants, by 2001 Brazil will be supplied by thermoelectricity generated by imported natural gas from Bolivia.

The plan involving the use of natural gas entails the construction of 49 thermoelectric plants by 2003, to add 15,000 megawatts/hour to Brazil’s overall capacity. Ten or 12 power plants should begin operating next year, ahead of the projected deadline, said Abdo.

But while the accelerated completion of the thermoelectric plants could close the gap between supply and demand, the efficiency of the new plants will be sacrificed, because fuel consumption will be high and electricity expensive due to the less productive technology that had to be adopted in order to get the plants up and running as soon as possible, according to technicians.

The main thing is that ANEEL is living up to its mission of helping to diversify suppliers and fomenting competition and a balance between supply and demand, said Abdo.

There are now a wider range of actors in the energy sector, which leads to “better balance and stability,” said the director of the agency.

The members of ANEEL’s board of directors are designated by the president, with a four-year mandate designed to ensure autonomy. Furthermore, the members do not all assume their posts at the same time, but have staggered terms.

The government and ANEEL do not always share the same criteria. For example, when it comes to privatising public assets, the executive branch seeks the best price, while the agency’s priority is to obtain the best possible service and low-cost, reliable supplies for consumers.

An overly high sales price “is bad for consumers, because the purchasers will charge high rates in order to compensate for what they paid,” said Abdo.

ANEEL’s mission is to guarantee “fair rates” and high quality service, to achieve universal coverage, and to defend the interests of consumers, settle disputes, and prevent monopolies, the official pointed out.