Energy and environment in

Brazil
JOSÉ GOLDEMBERG & OSWALDO LUCON

Foreword: renewable energy sources and sustainability

E
nergy, air and water are crucial ingredients to human life. In
the primitive societies their cost was close to zero. Energy
was obtained from the forests’ woodfuel, both for heating
and domestic activities, such as cooking. Gradually, however, energy
consumption began to increase so much that other sources became
necessary. During the Middle Ages, both energy from water courses
and the wind were used, but in insufficient quantities to fulfill the
needs of growing populations, mainly in the cities. After the Industrial
Revolution, it became necessary to use more coal, oil and gas, which are
expensive to produce and transport to the consumer centers.
Water consumption has also increased considerably. Thus it became
necessary to charge for its use to pay for its purification and transportation
costs to the consumers. If, and when, a colony from Earth is installed on
the moon (which has no atmosphere), it will be necessary to pay – and
very much so – for the air consumed by human beings, that will have to be
taken there.
In 2003, when the world had 6.27 billion people, the average total
energy consumption was 1.69 ton of oil equivalent (toe) per capita. One
ton of oil is equal to 10 million kilocalories (kcal), and the average daily
energy consumption is 46,300 kcal per person. For comparison sake, it
is worth mentioning that 2,000 kcal is the energy that we get from food
and that allows us to stay alive and working fully. The remaining energy
is used in transportation, domestic and industrial expenses and waste in
the energy transformation processes.
The current energy production and consumption patterns are
based on fossil sources, which generate local pollutants emissions,
greenhouse effect gases and put at risk the long term supply in the
planet. Such patterns must be changed, stimulating renewable energy
sources. From that point of view, Brazil has a very favorable condition
as compared to the rest of the world. Table 1 shows the percentage
contribution of the several energy sources to total energy consumed in
Brazil and in the world in 2003.

ESTUDOS AVANÇADOS 21 (59), 2007 7

 Table 1
Primary energy in Brazil and in the world in 2003,
total and portions according to data from the International Energy Agency (IEA)

Primary energy 2%3,- 5/(0

Total, billion of 4oe  1 
Oil 4 3 
on-renewable ossil
Natual Gas 66 2
Coal 6 2
Share of the sources


5'-)%2  
!5&404%-
 
Traditional
)/ewable "2%(,t,0/%l  
biomass
0/6)/tional Hydro 1  2
Modern
0()2/
7/ew8 ,9 

biomass
Other
30-%2


 
wind, )4'
!5&404%-  

Renewable energy sources represented 41.3% of total consumption

in Brazil, while that ratio was only 14.4% in the world. Average energy
consumption in Brazil is 1.09 toe per person per day, just below world average.
Average consumption does not represent adequately what happens in the
world: in Bangladesh it is eleven times lower, and in the United States, five
times higher. Total energy consumption in Brazil in 2004 was approximately
216 million toe (Mtoe), or 2% of world consumption, which was 11,223 Mtoe.
Brazilian electricity matrix has a strong hydraulic base (Box 1).
However, the stimulus to other “modern” renewable energy sources is still
very low compared to world average, despite the Federal Government’s efforts
through the Program for Investments in Alternative Sources of Electric Energy
(Proinfa).

Box 1 – Electricity

E LECTRICITY GENER ATION in Brazil had an average annual

growth ratio of 4.2% between 1980 and 2002. Hydraulic power
has always been dominant, since Brazil is one of the richest countries in
the world in terms of hydro resources. In turn, coal has had a modest
contribution, since the country has few reserves and their quality is poor.

8 ESTUDOS AVANÇADOS 21 (59), 2007

 The installed hydroelectric capacity is approximately 70,000 megawatts
(MW, million watts) and there are 433 hydroelectric power plants in
operation. Of those, 23 have a capacity higher than 1,000 MW and
represent more than 70% of the total installed capacity. There is still
considerable potential – approximately 190,000 MW not being used,
mainly in the Amazon region, and, therefore, far from the great consumer
centers located in the Southeast. The production cost of 1 kW in a
hydroelectric power plant is approximately US$ 1,000. The potential for
retrofits of the great power plants which were built more than twenty years
ago (with installed capacities mainly between 1,000 and 8,000 MW) is
32,000 MW. This can be obtained at a cost of US$ 100-300 per installed
kW. Therefore, it is significant.
Among other technologies used for electricity generation in Brazil
there are thermonuclear, natural gas and diesel oil thermoelectric power
plants, but none of them contribute with more than 7% of the total.
The introduction of biomass, nuclear energy and natural gas reduced
the percentage of hydroelectricity from 92% in 1995 to 83% in 2002.
Electricity generation through biomass (vegetable residues and sugar cane
bagasse) in 2002 came from 159 power plants, with installed capacity
of 992 MW, or 8% of the thermal electrical power in Brazil. The great
majority of these power plants (with close to 952 MW) is located in the
State of São Paulo and uses sugar cane bagasse, a by-product of the sugar
and alcohol production.
Proinfa was created by Law n.10.438/2002. Its goal was to
stimulate electricity generation by wind sources, biomass (such as sugar
cane bagasse and landfill gas) and small hydro plants. Proinfa’s first phase
establish the generation of 3,300 MW through these sources. Its second
phase established a 10% goal of these same sources in the entire Brazilian
electric matrix in twenty years, but it was abandoned. Law n.10.762/2003
reviewed Proinfa and does not mention Phase 2.

Besides, Brazil is a world paradigm for its vigorous modern biomass

program as far as transportation based on ethanol is concerned (Box 2). The
consumption of fuelwood, a traditional biomass source, is still high.

Box 2 – Biomass

A specific characteristic of Brazil is the high industrial development and

the application of biomass energy technologies. Some good examples
of this are: ethanol production from sugar cane, charcoal from eucalyptus

ESTUDOS AVANÇADOS 21 (59), 2007 9

 plantations, electricity co-generation from sugar cane bagasse and the
use of biomass in the paper and pulp industries (barks and residues from
trees, sawdust, black liquor, etc.). The use of biomass in Brazil is the
result of several factors combined, including the availability of resources
and of cheap labor, fast industrialization and urbanization rates and the
historical experience with industrial applications of that energy source on
a large scale. Approximately 75% of the alcohol produced comes from the
sugar cane juice (which yields close to 85 liters per tonne of sugar cane).
The remaining 25% come from the molasses that results from sugar
production (with a yield of almost 335 liters per tonne of molasses). In
2004, total bagasse production was close to 110 million tonnes, which
generated a surplus of 8.2 million tonnes for non-energy purposes. The
energy products resulting from sugar cane contributed with 13.5% of the
Brazilian energy matrix in 2004.
The use of fuelwood in Brazil is still significant, mainly in the
charcoal pits to produce charcoal and to cook food in the residences.
In 2004, the residential sector consumed approximately 26 million
tonnes of fuelwood, which was equivalent to 29% of the production.
Consumption has been growing in recent years due to the higher costs
of its direct substitute, liquefied petroleum gas (LPG), which is sold
in pressurized steel bottles. Almost 40 million tonnes were used in
the charcoal production (44% of the production), due especially to the
strong growth of the production of pig iron and the substitution of
mineral coal. The remaining 17% represent consumption in agriculture
and cattle raising, as well as in the other industrial sectors. Fuelwood
and charcoal represented 13.2% of the 2004 matrix, 0.3% higher than
in 2003.

The relatively comfortable position that Brazil enjoys in its energy

matrix may nonetheless be jeopardized since there is a divergence concerning
the directions that the country must follow in that area.
Retrospective of energy production and consumption in Brazil
and in the world
After the “economic miracle” period, Brazil had a strong decrease
in the growth rates of Gross Domestic Product (GDP), of primary energy
production and of electricity consumption. In the last thirty years, the growth
rate of primary energy production in Brazil has been moving along with that
of GDP, but electricity consumption has been growing even faster, due to the
country’s growing electrification and to the installation of electro-intensive
industries, such as the aluminum ones. Table 2 allows us to compare Brazil,
the world and the blocks of both industrialized and developing countries.

10 ESTUDOS AVANÇADOS 21 (59), 2007

 Table 2
Growth indicators and proportion: GDP, electricity and total
primary energy consumption in different periods and regions
(IEA, 2006; IEA, 2005; MME, 2006, CIA, 2006)

Indicator Region Period

1971- 1980- 1990- 2000- 2004-
1980 1990 2000 2003 2005
Brasil 8,34% 1,57% 2,65% 1,26% 2,28%
 
Annual
World 3 2
 4 
DGP grouth onE 5 
  3  
 n(
ECD 3 3
  5
 n(
Brasil 11,83% 5,90% 4,30% 1,05% 4,24%


Annual
electri-
World 5  3 2
 2
 n(
cityco
tio
p
m
su
nn
Non-OECD 6 4  2  5  n(
ro
gth
w
OECD 4 3
 2  0 n(

Annual primary Brasil

5,39% 1,78% 3,32% 1,45% 1,75%
energy production World 3  1 1  2
 n(

growth Non-OECD 4  2 1
 3 n(
OECD 2 1   0 n(

Sources: (a) MME (2006) Balanço energético nacional (National Energy Balance),
www.mme.gov.br; (b) IEA (2006) Key world energy statistics www.iea.org; (c) IEA
(2005) Energy balances of non-OECD countries. International Energy Agency, Paris; (d)
CIA (2006) The World Factbook http://www.cia.gov/cia/publications/factbook/geos/
xx.html.

The traditional model established between 1940 and 1960 defined

that state-owned companies, both in the federal and state levels, should be
responsible for most of the production and distribution of electricity, oil and
gas. Petrobrás, Eletrobrás and countless other state-owned companies were
created with that goal in mind, including energy planning.
Such model worked well until the mid-1980’s, keeping energy costs low
and, therefore, promoting economic development, but it also created serious
problems, such as:
1. Artificially low electricity tariffs, as, by the way, the federal
government made with almost all public service tariffs on a useless
effort to control inflation.
2. The political use of the companies that produce and distribute gas
and electricity involving incompetent management and the building
of several hydroelectric power plants to obtain political profit
without the necessary resources to complete them, which would
guarantee a minimum of economic return.

ESTUDOS AVANÇADOS 21 (59), 2007 11

 To face such distortions a partial privatization of the system occurred
halfway through the 1990’s, following the procedure that the Western
European countries used earlier:
i. De-verticalization of energy production/generation, transmission
and distribution.
ii. The introduction of competition in the energy production /
generation, transmission and distribution, as well as free access to
the network.
iii. Use of independent regulatory agencies and the privatization of
state-owned companies.
Traditionally, the government forecasts deal with the oil sector
independently from the electricity one, but that tradition is changing because
the gas that Petrobrás produces or imports is an important input not only for
residential, industrial and vehicle uses (in which liquid fuel prevails), but for
electricity production as well.
The Brazilian regulatory system, with the National Oil Agency (ANP)
and the Brazilian Electricity Regulatory Agency (ANEEL) became not much
realistic, and strictly speaking, both agencies should be substituted by a single
regulatory organ to deal with the energy sector as a whole.
Self-sufficiency in oil and the issue of natural gas for Brazil
In the oil sector, control remains basically on the hands of Petrobrás
(despite the presence of multinational companies in the sector), and the efforts
were concentrated in seeking self-sufficiency in production, exploring the
offshore resources in the Brazilian continental platform (Box 3).
More recently, the state-owned company also began to value natural
gas, which used to be a by-product of oil exploration released to the
atmosphere in flares.

Box 3 – Oil and natural gas

T he proven oil reserves in Brazil of 11,243 million barrels, which are

equivalent to approximately twenty years of the current production,
ensure a comfortable situation for the country both in the short and
medium terms. For the OECD countries, the reserves represent close to
ten years of their production, while the world average is forty years.
The proven natural gas reserves, of 326.1 billion cubic meters
(m³), are 33% higher than those of 2003 and are equivalent to nineteen
years of the current production. For the OECD countries, the reserves are
equivalent to almost fourteen years of their production, while the world
average is sixty years.

12 ESTUDOS AVANÇADOS 21 (59), 2007

 Brazil reached self-sufficiency in oil production in 2006. Between
January and September of that year, Petrobrás produced 1.763 million
barrels per day, which was 5% more than the year before. The production
goal is 1.88 million barrels/day. However, the domestic sales of fuel grew
only 2%. The country exports 450 thousand barrels of oil/day. According
to the International Energy Agency, oil consumption is expected to grow
by 1.1% worldwide in 2006.
Natural gas production was 46.5 million cubic meters per day
(Mm³/d) in 2004, which is 7.5% higher than in 2003. The imports from
Bolivia reached 22.2 Mm³/d, which is 60% higher than in 2003. In 2004,
the main use of natural gas remained in the industrial sector, with 20.7
Mm³/d and a substantial growth of 13.7%. The growth of the use in
electricity co-generation was also significant, already representing one-
third of the use in generation. The use of natural gas as a vehicle fuel also
had a great growth.
Natural gas contributed with 9.4% of the Brazilian energy matrix
in 2005, as compared to 3.3% in 1995. In 2003, the government adopted
a policy to stimulate natural gas consumption, with the goal of occupying
the capacity of the Bolivia–Brazil gas pipeline and of draining off gas from
the Campos Basin. The energy was very attractive because of its efficiency,
lower emissions and attractive prices. However, in 2006 Bolivia decided
to nationalize (that is, turn it state-owned) the gas sector, reviewing its
price policies and causing instabilities in the Brazilian market. The current
natural gas price corresponds to 56% of fuel oil price, but that proportion
is expected to reach 80% (a 42% growth), according to the Brazilian
Energy Research Company (EPE). Petrobrás is seeking a solution at the
Santos offshore basin, where it is expected to invest US$18 billion in
ten years.

As far as oil is concerned, it can be said that the pursuit of self-

sufficiency is a traditional policy of the Brazilian energy sector, based on
the need to reduce financial expenses with imports. However, as the import
problem became less important due to the great domestic oil production, other
facts should be taken into consideration. Investment in oil spends most of
the available income in the country and its reduction could free resources for
other purposes that are economically more productive and that could generate
products and services for exports.
Besides, self-sufficiency is not guaranteed in the long-term: the ratio
between the proven reserves and current production is twenty years. Even with
new findings, investments are always growing. The substitution of gasoline
for alcohol contributed significantly to reach oil self-sufficiency, an objective

ESTUDOS AVANÇADOS 21 (59), 2007 13

sought for decades. It is also worth to say that self-sufficiency is physical, not
economic: we do not have high quality oil and imports are still necessary.
Brazilian oil account had a US$ 3.2 billion trade deficit (the deficit reached
US$ 2.22 billion in crude oil alone) until August 2006. The movement
reflects mainly the great price increase of oil in the international market, which
has cancelled the effects of the domestic production growth. While Brazil paid
close to US$ 77.62 per barrel bought abroad in August, the exported barrel
was sold by the equivalent to US$ 57.44, a difference of US$ 20.18 per barrel.
Petrobrás, that controls 98% of refined oil in Brazil, must import light oil
(which is more expensive) to process in its refineries.
Self-sufficiency does not apply to natural gas, although great reserves
of that product have been recently identified in the Southeast region. To make
its use viable, great investments must be made in its transportation systems
(such as gas pipelines and compressors). There is the possibility of using and
even expanding the gas supply from Bolivia, where Petrobrás has already
made considerable investments as a strategy for Brazil to import gas from that
country, but it is necessary to consider its recent political problems. Besides
greater volume, there has been an increase in the price of the raw material
imported from the neighboring country. The purchases of natural gas from
Bolivia reached US$ 986 million in the first eight months of 2006, a 63%
increase compared to the same period in 2005.
The definition of the interest in import is not determined only by the
supply risk. It must be taken considering economic aspects related to energy
and to the development of both countries. In the case of Bolivia, one must
consider the country’s economic options halfway through the 1990’s and
decide if it can even neglect its exports to Brazil. The decrease in the gas
exports from Bolivia will reduce its development capacity, increasing social
tensions and reducing its willingness to import Brazilian products. Importing
liquefied natural gas (LNG) from Algeria, Trinidad-Tobago and other
countries would be an option to be analyzed, but also a very expensive one.
Brazil depends and will still depend for a long time to come on oil and
gas and it must seek alternatives to reduce its consumption.
The restructuring of the national electric sector
and its mistakes
The privatization of the electric sector was only partial: it occurred
in approximately 70% of the distribution capacity, but in only 30% of the
generation. That caused a partial collapse of the planning and the “blackout”
crisis in 2001, since the private investors, worried as they were with regulatory
uncertainties, kept themselves aloof to new investments. From the year 2000
on, the federal government adopted a new model, the goal of which was to
try to reduce the investors’ risk. That was made by dividing the electricity
generation market into two segments, one of them made up of free consumers

14 ESTUDOS AVANÇADOS 21 (59), 2007

and the other one of captive consumers. The free consumers could choose
their suppliers among independent producers through bilateral contracts. The
captives would be taken care of by companies that would form a transactions
chamber.
That model was changed in 2002 with the creation of the Energy
Research Company (EPE), under the Ministry of Mines and Energy. It
auctions the ventures that it considers necessary to fulfill the demand in the
next five years, based on future demand forecasts. However, EPE forecasts
for electricity consumption until 2015 are nothing but a macroeconomic
exercise, in which simplistic hypotheses are made about market growth based
on GDP growth expectations and demand elasticity. Those studies assume that
between 2005 and 2015 the GDP growth rates will be between 4.2% (high
trajectory scenario) and 5.8% (low trajectory) per year, with 5.2% per year as
a reference scenario, that is, the most probable for growth. All these scenarios
are extremely optimistic, considering that the Brazilian GDP is growing by less
than 3% per year, as shown in Table 2.
The new electric sector model is based on computer simulations
that start from questionable assumptions, which is clearly not working as
demonstrated in the last electricity auctions, widely discussed in the Brazilian
press. One of the perverse results of those auctions was that most of the energy
sold comes from fossil fuelled thermal power plants, which shall not only turn
the energy more expensive, but it will also aggravate environmental problems.
In other words, the “new model” of the electric sector is taking Brazil
away from its natural path which is the utilization of its abundant hydro
potentials, a cleaner and renewable energy source. Thus, there is a clear
contrast between environmental sustainability and the alternatives that the
“new model” privileged on behalf of urgency. As an example, Table 3 shows
the result of the last EPE auction.

Table 3
Result of the energy auction that took place on December 2005
Hydroelectric plants 1
$
Diesel thermal plants 2

$
Biomass thermal plants 9
$
Natural gas thermal plants 1
$
Fuel oil thermal plants 1
$
Coal thermal plants 5
$

Source: ANEEL, 2006.

Building coal power plants, a highly pollutant energy source, became

a profitable business in Brazil. Besides the units already contracted, EPE
has enabled 43 diesel and fuel oil plants for the next auction that took place

ESTUDOS AVANÇADOS 21 (59), 2007 15

on October 2006. That represents 4,070 MW, or 20% of the total installed
capacity offered in that auction. Two coal plants are expected to enter the
auction with 1,192 MW, even though the quality of Brazilian coal is a problem
(Box 4).

Box 4 – Coal

T he mineral coal that is used in Brazil has two origins: steam coal
(energetic), that is domestic and close to 90% of which is used for
electric generation, and metallurgic coal, imported to produce coke,
mainly used in the steel industry. Brazilian coal has poor quality with
sulfur oxide impurities that can reach as much as 7%. In 2004, mineral
coal maintained a 6.7% share in the Brazilian energy matrix, with one-
fourth of that total being domestic.

Therefore, it seems clear that Brazil is moving in the opposite direction

from history, since the rest of the world is seeking alternatives to reduce
the share of pollutant energy sources in their energy matrixes. Besides its
contribution to the “greenhouse effect”, coal impurities cause a phenomenon
known for more than one century in big cities, “smog” – a layer of highly
toxic haze which causes breathing problems. Fuel oil also presents the same
problems, even though in a lower proportion.
The Brazilian calling is hydroelectric plants and there is still great
potential to be explored. That’s what happens in the complex of power plants
at the Madeira river (6,450 MW, R$ 20 billion in investments) and of Belo
Monte power plant (11,000 MW, R$ 7.5 billion), which caused great conflict
between the Ministry of Mines and Energy and certain sectors of society,
mainly the non-governmental organizations. There is a clear reason for that
conflict: the great environmental impacts that projects such as Tucuruí and
Balbina presented in the past.
Given the anxiety to approve the projects, considered as urgent by the
EPE models, the environmental licensing bodies are often pointed out as
obstacles to development, bringing to a halt the construction of hydroelectric
plants and making the energy auctions privilege other sources. That is a
distorted vision of reality, for several reasons:
• many businessmen (and even governmental sectors) consider
environmental licensing as mere formality and forget the
constitutional principles and the rule of the law in the country;
• construction often begins before the environmental licensing in the
competent bodies is complete;

16 ESTUDOS AVANÇADOS 21 (59), 2007

 •
many of the environmental impact assessments are incomplete and
of poor quality; the interested entrepreneur takes a long time to
fulfill the requirements;
• there are macroeconomic aspects, such as high interest rates, that
make the entrepreneur privilege projects that are built faster;
• certain entrepreneurs try to speed up the licensing of a project
without willing to execute it, only to sell a “ready package”.
The environmental licensing bodies must find solutions for the
complicated permitting process of the hydroelectric power plants – the
Brazilian natural calling.
The solution involves environmental compensations, through which
the entrepreneurs must allocate at least 0.5% of the total value of his project’s
implementation costs in the creation of new conservation units or in the
maintenance of existing ones. Besides, other measures are indispensable, such
as the adequate resettlement of the populations affected by the construction of
the power plants.
Postponing these measures is what contributes the most to delay the
hydroelectric sector’s expansion. It is necessary to seek a balance between the
annoyed interests of those affected by the undertaking and the interests of those
much larger populations that benefit from it even though they are far away.
Energy conservation in Brazil
The entire energy use rationalization area has not been receiving
priority. In the OECD countries, energy consumption would be 49% higher
than it currently is if it wasn`t for the rationalization and energy efficiency
measures adopted after the oil crises of the 1970`s (Figure 1).
160
Hypothetical use without
energy saving

140

48%
120

100
Exajoules (EJ)

Actual energy use

80

60

40

20

0
1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

Source: IEA (2005) World energy outlook. IEA, Paris.

Figure 1 – Efficiency gains in the OECD countries, 1973-1998 (IEA, 2005).

ESTUDOS AVANÇADOS 21 (59), 2007 17

 In a developing country such as Brazil, per capita energy consumption
is still low and it couldn`t be expected that energy efficiency measures had so
much impact as in the OECD, since energy consumption must necessarily
grow to promote development (Figure 2). However, nothing stops the use
of modern and efficient technologies from being introduced in the very
beginning of the development process, thus accelerating their use. That
is the so-called leapfrogging effect, which is opposite to the concept that
development can only be reached with environmental impacts.

Figure 2 – The Kuznets Curve for the environmental impacts and development phases:
(A) from primitive to industrial societies and (B) from industrial societies to information
and service societies. In the X-axis there is per capita income; in the Y-axis, income
inequalities, primary energy per capita use and the intensity of environmental impacts.

This can be accomplished through policies and actions that are

relatively simple and often economically attractive. New and more efficient
technologies in refrigerators, air-conditioners, electric motors and lamps
are already produced and/or sold in the country. Electricity conservation
reduces consumption and postpones the need for investments to expand
the installed capacity, without putting in risk the services to the final users.
There is no doubt that energy efficiency is the most effective way of reducing
costs and both the local and global environmental impacts at the same time.
Besides, conservation reduces the need for governmental subsidies for energy
production.
Recent estimates made by a group from the University of Campinas
(Unicamp) indicate that in the electricity area it would be possible to obtain a
38% reduction in the electricity consumption to be reached by 2020. However,
certain cautions must be taken with “models”, both those made by EPE and
the ones by Unicamp. In the same way that optimistic GDP growth forecasts
induce overestimated conclusions about the expansion of electricity generation,
prospective scenarios with exaggerated results concerning energy conservation
in relation to the current policies get labeled as “wishful thinkings”.

18 ESTUDOS AVANÇADOS 21 (59), 2007

When these different visions meet there are often conflicts between the
developmentists and conservationists.
That issue must be dealt with through policies that encourage the best
forms for energy conservation and generation. Energy planning cannot be a
debate between scenarios.
Today, Brazil has two specific programs to promote energy conservation
and the rationalization of its use, which are fundamentally aimed at
information dissemination and at awareness of the population for the
importance of the more efficient use of energy:
• The National Electricity Conservation Program (Procel),
coordinated by Eletrobrás and that promotes actions such as
education, labeling, municipal energy management, public
lightning, electricity management in the industry and in buildings
and environmental sanitation; and
• The National Program for the Rationalization of the Use of Oil
and Natural Gas (Conpet), coordinated by Petrobrás and that
promotes product labeling and transportation actions.
There are, however, two powerful legal instruments that are rarely used
nowadays and that could be activated to promote more efficient technologies:
• Law n. 9,991/2000 determines that the concessionaries and
permissionaries of electricity distribution public services must make
an annual investment of at least 0.75% of its net operational income
in research and development of the electric sector and at least 0.25%
in programs for the energy efficiency in the final use.
• Law n.10,295/2001 determines that should be established
maximum levels of specific energy consumption, or minimum levels
of energy efficiency, of machines and appliances that use energy
produced or sold in the country, based on pertinent technical
indicators.
Conclusion
Future consumption forecasts depend essentially on the kind of
development and economic growth that the country will have. For that reason,
the several exercises that have been made both by governmental agencies and
by university groups reflect different visions of the future and therefore, have
different results.
The decisions a country makes concerning energy cannot be based
on simple models. The Brazilian energy matrix depends on the path that the
economic development of the country will take. There is a growing need for an
energy policy that acknowledges that key fact, since part of the energy system
was privatized and depends, therefore, on non-governmental investments that
will only take place if there are clearly defined rules.

ESTUDOS AVANÇADOS 21 (59), 2007 19

 In all cases, the environmental licensing rules must be obeyed. It is
possible to mitigate many of the impacts and, with correct policies and a
previous and transparent environmental impact assessment, to carry out fair
environmental compensations.
Governmental management of the energy sector can be highly
increased, since the results of the actions for the greater efficiency in the final
use of energy are still modest. Besides, one cannot ignore aspects of security
of supply, creation of jobs and environmental sustainability. For example, the
use of biomass, besides being commercially competitive with oil, it is cleaner,
renewable and permits the generation of many more jobs. The reactivation of
Phase 2 of Proinfa, that sets a tangible goal for the new renewable electricity
generation sources, is a powerful incentive to the market agents.
Energy efficiency programs, based on the adoption of mandatory
standards, stimulate the service sector, reduce pollution and extend the life
of the oil and gas reserves. That fact, even though politically relevant and
acknowledged, is not explicitly accounted for in the energy expansion programs.
Besides, the definition of the Brazilian industrial profile has a great
impact on the quantity and in the type of final energy that we will have to
produce. Historically, Brazil is a great producer of products that have an
intensive use of energy, such as pulp and paper, iron, steel and aluminum.
The change of that profile to products that are less energy-intensive may alter,
in the long term, the energy demand in the country and add value to our
production and exports.

ABSTRACT – Energy production and use present environmental impacts, but the
present consumption patterns can be improved through a more efficient use of energy
and a shift from fossil fuels to renewable energy sources. Due to hydroelectricity
and bioethanol, Brazil still has a comfortable position compared to the rest of the
world. Self-sufficient in oil, the country today discusses how to supply natural gas
and electricity in the medium and long terms, with different positions about the path
to follow. The present article proposes recommendations, with special focus on the
electricity sector.
KEYWORDS: Brazil, Power sector, Policies, Sustainability.

José Goldemberg is a Professor at the University of São Paulo’s Intitute of

Electrotechnique and Energy. @ – [email protected]
Oswaldo Lucon is a technical advisor at the São Paulo State Environment Secretariat.
@ – [email protected]
– This text has been translated by Rodrigo Sardenberg. The original in Portuguese
– “Energia e meio ambiente no Brasil” – is available at www.scielo.br/scielo.
php?script=sci_issuetoc&pid=0103-401420070001&lng=pt&nrm=iso
Received on 11.16.2006 and accepted on 11.24.2006.

20 ESTUDOS AVANÇADOS 21 (59), 2007