5.2. Brazil’s Energy Policy
Brazil has the greenest energy mix with the usage of renewable energy of hydro, wind, solar, bioenergy and geothermal power plants which contributes to 46% of the country’s energy requirements [
28]. After China and Canada, Brazil is the third largest hydroelectricity producer globally. Brazil’s hydroelectric sector almost has an unlimited potential which has not been fully exploited given that the country has the capacity to construct numerous hydroelectric power plants [
29]. A total electricity demand of 77% is produced from hydropower (Hydro is 12% of the total energy source but used as a major source to produce electricity) the rest being generated from coal, gas and other renewables in Brazil [
29].With the dependency on hydropower puts Brazil in a vulnerable to potential power supply shortages in drought years, as experienced during year 2001 and 2002 when the country had severe droughts which resulted in energy supply crisis [
29].
The energy mix is depicted in
Figure 7 where oil accounts for 36%, biomass accounts for 32%, hydro accounts for 12%, gas accounts for 11%, coal accounts for 5%, nuclear accounts for 2%, other renewables (wind, solar, etc.) accounts for 2% [
28]. Brazil is the 5
th biggest globally, by ground area and rated second amongst the top ten economies by magnitude of
“Gross Domestic Product (GDP)” [
30]. Brazil is a major ally in commerce and at times a competitor of the USA, with respect to energy fuels (E.g., Petroleum and ethanol). The country was massively reliant on imports for its energy resources. Brazil has become an energy exporter which produces more energy than it consumes after 35 years of policy development to promote domestic energy resources (hydro, fossil fuels, biomass, gas, wind, nuclear, and solar) [
28]. Brazil is the tenth biggest producer of electricity globally and the eighth leading world user of energy [
28].
Brazil’s energy security was significantly challenged throughout its history. Major energy sources were inadequate, ethanol fuel for cars (in the beginning of the 1990’s), droughts resulted in reduced hydropower (in the beginning of 2000’s) and expecting the provincial energy from Bolivia and Argentina for natural gas would improve energy security [
30]. Bolivia's choice to nationalize their oil and gas sites surprised Brazil, as a major setback, particularly as Brazil did not interpret the country as a dominion. The nationalization specifically shocked
“Petrobras”, which was Brazil’s oil company that had approximately
$1 billion of financial stake in Bolivia [
30]. Argentina added to the crisis by implementing policies that restricted the country's capability to achieve its natural gas foreign commerce agreements. Depending on providers for a reliable energy source was identified as risk to Brazil, however, by adopting better enabling strategies to encourage energy production and diversification [
30]. Brazil succeeded in making momentous growth by energy security advancements. Argentina had nationalized its energy resources as it recognised
“European and American” organisations as wings of EU and U.S. dominion. Brazil, as one of the colonies, did not anticipate an associate
“Latin country” to annex Brazil’s partnership, as Brazil did not deem the country as a dominion rule with the likes of the United Kingdom, Spain and Portugal [
30]. Incentivised reduced borrowing rate and funding plans, together with fair prices was established by electric power bidding initiatives resulted in the wind power industry to expand substantially in the country.
The solar source for distributed generation is becoming an effective energy source. The vast use of flexible fuel cars renders ethanol a widely used fuel. There’s a blend mandate of 27.5% on the gas including the opportunity of operating on 100% ethanol coupled with biodiesel mixing plans in year 2018 [
28]. Natural gas is a huge alternative and can be a transition fossil fuel by year 2050 with the focus to decrease the usage of fossil fuels. The
“Climate Transparency Policy Paper: Energy Transition in Brazil” provides the generic energy plan of the country and determines initiatives, gaps and prospects to accomplish
“Greenhouse Gas (GHG)” emission alleviation objectives, providing
“policies and legislation” to sustain a vigorous evolution of the energy segment [
28]. Brazil’s renewable energy resources makes up 46% of entire primary energy resource and 85% of the electricity generation. Currently, non-renewable energy sources comprise of approximately 57% of full primary energy supply and 32.7% is utilised in the transport industry [
28]. Brazilian energy intensity has been constant from the year 1990, below 4 TJ / million US
$ [
28]. Brazil’s entire GHG production is approximately 1.6 billion tons of CO
2 and ranked 12
th on the world emission rankings [
47]. The power segment investments was in renewable energy from year 2000 to year 2013 due to the structural reform in the energy sector. This led to change in Energy Policy which was more focused on the production of electricity by the IPPs and thus an increase usage of renewable energy from 48% to 51%. Wind power was the majority investments in the power sector between the year 2014 and 2016. Solar energy investments augmented considerably to approximately 35% of overall funding in the power segment by year 2016 [
28].
Funding authorized and approved for year 2021 included fourteen Solar Photovoltaic (SPV), eight wind farms, two hydropower and one biomass fired thermo-power plants, increasing a further 880MW capacity into the
“National Integrated System” (SIN) [
31].
Figure 8 shows that future energy mix would improve to greener energy mix with the additional capital injection by the Brazilian government executing their energy transition strategy. A total of
$4.5b and 4040 undeviating employment are projected to be formed which is positive in compliance to the ILO 2015. Wind power sprouted as a substitute aimed at the expansion of the electricity sector subsequent to the energy emergency of year 2001 and is currently the ninth leading international volume (13 GW), with an average capacity factor of 40%, representing 8% of Brazil’s electricity sector in terms of connected electrical power capacity.
The overall potential in Brazil is approximately 300GW [
31]. It’s forecasted from the
“Ministry of Mines and Energy” a growth of 125% by year 2026 when the predicted target of 28.6% wind power of the total capacity of the power pool in Brazil will be installed. It’s estimated by the
“Brazilian Industrial Development Agency (ABDI)” that by year 2026 the wind power sector would produce approximately 200 000 novel undeviating and ancillary employment [
32,
36]. The wind energy value chain has been rising by the enticements offered by the government.
(“Tax exemption, long-term financing, etc.”). The country recently has considerably advanced their industrialized structure of the wind power segment to assemble the wind turbines and the fabrication of numerous modules (towers, blades, subcomponents of the pivot and nacelle) locally, with reduced quantity of imported components equated to former years [
31].
The
“International Labour Organization (ILO, 2015)” specified, if suitable strategies are implemented, the evolution of the global economy to a
“greener” and extra viable framework ought to craft 620000 additional employment opportunities in Brazil, which adequately supersedes the possible 180 000 employment opportunities that may be reduced (ILO, 2015). Funding in renewable energy resources, linked by incentive plans
(“tax reductions and attractiveness in financing”) coupled to decreasing GHG discharges, may yield a large quantity of employment. [
48]. The wind power segment created 150 000 undeviating employments in the year 2016, at present totalling 13 GW, or 8.6% of the nationwide electricity segment [
32]. The
“Light for All” initiative is conspicuous by achievement in pursuing the standardisation of availability to electrical power in pastoral areas, selecting old-fashioned inhabitants and regions of great scarceness. Started in 2003, it helped approximately 16 million of the population in 2016 [
48]. An investment of
$250m in year 2019 was intended to connect approximately, 96000 additional electrical connections in 17 states [
34].
Numerous strategies were compiled in Brazil aimed at diversifying the energy mix, through
“Proalcool and Proinfa” programs by means of its chief indicators [
34]. These plans permitted the triumph of Brazil’s biofuels and wind energy segment correspondingly. Public funding and incentives of substitute energy sources contributed an essential part in the progression and in launching the nation’s wind energy value chain. Currently, replicating strategies would remain critically imperative aimed at, increased progression of the solar energy value chain, integrated through major funding in research and development. Brazil with
“Light for All” program, has been fulfilling its social objectives [
34]. In summary, renewable energies in the country are progressing swiftly and the
“energy transition” will predictably evolve along with the nation’s technical financial progression [
25].