As Brazil's energy industry undergoes an overhaul, consumers must take a more active role in protecting public goods
in recent years, restructuring of the electric industry in Brazil has been occurring at a rapid pace. Installed electric capacity in Brazil now stands at about 60 gegawatts (gw), of which 94 per cent is generated by hydropower stations. The consumption is growing at the rate of 4 to 5 per cent annually, attributable mostly to the growth of energy consumption per capita (3 per cent) and population (1.5 per cent). However, installation of new generation capacity has been lagging behind this growing demand.
About 200gw of underdeveloped potential lies in the nation's water resources. But, despite this technical potential, fossil fuel power plants are the preferred options for meeting the increasing demand because of the indigenous abundance of gas and oil resources, proximity to demand centres and planning flexibilities.
Many regional utilities are desperate to install electricity sources to meet the demand, but the utilities possess neither indigenous capital nor creditworthiness among international lending institutions. They are now proceeding with plans to sell their existing generation, transmission and/or distribution assets in exchange for capital and technical assistance for further expansion. Since 1995, several utilities have already been privatised in many Brazilian states. The Brazilian government supports this trend: contracts for new electric installations are now to be open to bidding.
The process of open bidding should be conducive to demand-side resource acquisition, measures to reduce electric consumption and peak load. Experiences from around the world has shown that many demand-side measures can be cheap and environmentally-benign.
The first major endeavour of this project, a workshop at the University of Campinas, took place in August 1997. This was followed by a two-day seminar in Manaus, the capital of the Amazonas, in January 1998. The purpose of this event was to draw the attention of local media and the general public to issues of utility restructuring and options for expansion of electric services in the state. In particular, the meeting was intended to raise public awareness of strategies involving energy efficiency and renewable energy, which might minimise environmental damage and other social costs of electricity generation.
At the end of the Manaus workshop, a group of participants, which included this author, composed a list of important points to be put forward to the state governments. These included the need to:
- produce periodic published state energy balances;
- create a local regulatory agency, closer to regional problems;
- support activities involving energy efficiency, especially in the areas of building costs, air conditioning and refrigeration;
- promote greater use of renewable energy in the region; and
- identify funding sources to develop projects in the area of energy technology and planning.
As a response to the privatisation of the energy sector, consumers must take a more active advocacy role with regard to complex issues at the technical and political levels of the energy and environmental issues. The public authorities in charge of restructuring the energy sector are now focusing on large bureaucratic regulatory issues, and so far have not been able to protect public goods effectively. A better educated public will be able to demand from competent authorities actions to protect public benefits and commonly held values.
Ashok Gadgil is a staff scientist at the Lawrence Berkeley National Laboratory, Berkeley, California, usa
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