Transcript
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Presented at a private seminar in Brasilia, in February, 2008
ENERGY IN BRAZIL
heitormoura@yahoo.com.br
Heitor Moura
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The energy supply chain
Consumption
Production
Trade
Oil
Hydrelectric energy
Natural gas
Eolic energy
Nuclear energy
Composition of energy supply
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CONSUMPTION
DOMESTIC
PRODUCTIONEXPORTS
IMPORTSINTERNAL SUPPLY
Supply from domestic orforeign sources
Domestic or foreign demand
All mediating transportation,storage and commercialdistribution networks
Supply chain mostcommonly refers to physicalunits, but necessarily involveseconomic considerations, suchas prices, cost and capitaldisbursements, as well asregulatory aspects.
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Apart from a small slow-down in the 80s,energy consumption in Brazil has beenregularly growing at rates higher thanworld average.
This difference between World andBrazilian growth rates was greater in the70s and 90s than it is now.
The high rates in the 70s were associatedto the fast economic growth of the period.
On the other hand, the low average in the80s reflects the decades slow economicperformance.
SOURCE: United States-IEA-DOE e Brazil-MMESOURCE: United States-IEA-DOE e Brazil-MME
0%
1%
2%
3%
4%
5%
6%
% 70s % 80s % 90s % 00s
Averageannualgrowth.
World - sale of energyBrazil - final consumption
Energy consumptionEnergy consumptionAverage annual growth ratesAverage annual growth rates
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During the last 36 years, consumption ofenergy from renewable sources has beengrowing on average at a slightly lower rate(2,8% p.a.)than consumption from non-renewablesources (3,0% p.a.).
This difference, however, varied markedlyfrom decade to decade.
10.000
100.000
1970 1975 1980 1985 1990 1995 2000 2005
Consum
ption(1.000tpe).
Renewable Non renewable
SOURCE: Brasil-MME Balano Energtico NacionalSOURCE: Brasil-MME Balano Energtico Nacional
0%
1%
2%
3%
4%
5%
%75>85 %85>95 %95>05 %04>06
Averagegrowthrates
.
Renewable
Non renewable
Average growth ratesAverage growth rates
Total energy consumptionTotal energy consumption
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The growth in energy consumption iscyclic, following the ups and downs ofthe economy in general.
SOURCE: Brasil-MME Balano Energtico NacionalSOURCE: Brasil-MME Balano Energtico Nacional-2%
-1%
0%
1%
2%
3%
4%
5%
1973 1978 1983 1988 1993 1998 2003
2-yearmovinggrowthrate.
Renewable sources
Non renewable sources
Annual growth ratesAnnual growth rates
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The main non-renewable sources of energy in Brazil are crude oil and natural gas.
Of the renewable energy sources, hydrelectric power and sugar-cane relatedenergy have shown the greatest increase over the last 36 years.
Though growing at essentially the same long-term rates, other renewable energy(eolic, solar and nuclear) still represent only a small portion of total energyproduced.
SOURCE: Brasil-MME Balano Energtico NacionalSOURCE: Brasil-MME Balano Energtico Nacional
RenewablesRenewables
100
1.000
10.000
100.000
1970 1975 1980 1985 1990 1995 2000 2005
Production(1.0
00TPE)
Hydrelectric
Wood
Sugar-cane productsOther renewable
1.000
10.000
100.000
1970 1975 1980 1985 1990 1995 2000 2005
Production(1.0
00TPE)
Crude oil
Natural gas
Other non-renewable
Non-renewablesNon-renewables
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10.000
100.000
1.000.000
1970 1975 1980 1985 1990 1995 2000 2005
1000TPE
Net imports
Final consumption
0%
10%
20%
30%
40%
50%
60%
1970 1975 1980 1985 1990 1995 2000 2005
Netim
ports/finalcons
Despite continued growth in finalconsumption, Brazils reliance on imports
of energy is today at a historical low,around 10% of consumption.
This reduction in energy dependence overthe last 3 decades came in two mainsurges:
in the late 70s and early 80s, and
since the mid 90s
SOURCE: Brasil-MME Balano Energtico NacionalSOURCE: Brasil-MME Balano Energtico Nacional
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Lower dependence on imports occured mostly due to the increase in theproduction of non-renewable energy, mainly oil.
This increase eliminated total dependence on non-renewable sources, thoughthis does not mean elimination of imports.
SOURCE: Brasil-MME Balano Energtico NacionalSOURCE: Brasil-MME Balano Energtico Nacional
Consumption less productionConsumption less production(1.000 TPE)(1.000 TPE)
-10.000
0
10.000
20.000
30.000
40.000
50.000
1970 1975 1980 1985 1990 1995 2000 2005
1.000TPE.
Renewable
Non renewable
10.000
100.000
1.000.000
1970 1975 1980 1985 1990 1995 2000 2005
1.000TPE
Renewable consumption
Non renewable consumption
Renewable production
Non renewable production
Development (1.000 TPE)Development (1.000 TPE)
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Energy imports until themid 80s were mainly oil.
During the 90s coal andoil products increased,while crude oil importswere reduced.
Since 2000, natural gasimports have becomesignificant.
Brazil has also purchaseduranium during peakmoments of its nuclearprogram. These importshave become steadiersince 2000.
SOURCE: Brasil-MME Balano Energtico NacionalSOURCE: Brasil-MME Balano Energtico Nacional
Energy imports (1.000 TPE)Energy imports (1.000 TPE)
0
10.000
20.000
30.000
40.000
50.000
60.000
70.000
1970 1975 1980 1985 1990 1995 2000 2005
1.0
00TPE
Oil Coal and coke Oil products
Electricity Uranium Natural gas
Alcohol Vegetable coal
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Energy exports as a percentageof import requirements have
increased in 3 phases since the70s.
Two main product groups areexported:
crude oil
oil products
This is due to the peculiarBrazilian crude production andrefining characteristics:
Brazilian crude is mostlyheavy (low API);
most economic refiningoptions produce a greaterproportion of gasoline than
can be consumeddomestically;
there is a regular need forSOURCE: Brasil-MME BalanoSOURCE: Brasil-MME Balano
Energtico NacionalEnergtico Nacional
EnergyEnergyexports asexports as
percentagepercentageof importsof imports 0%
10%
20%
30%
40%
50%
60%
1970 1975 1980 1985 1990 1995 2000 2005
Exports/Imports(%)
Density ofDensity ofcrudecrude
producedproducedin 2005in 2005
0%
5%
10%
15%
20%
25%
30%
35%
40%
10>15 15>20 20>25 25>30 30>35 35>40 40>
Degrees API
Percentageoftotalproduction
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Until 1980, exports were irregular andin small volumes.
From 1980 to 1999, the main exportswere fuel oil and gasoline in excessfrom Brazils refining mix.
Since 2000, fuel oil exports havebecome much more important thangasolines, while crude oil volumesincreased significantly, to over half of
total energy exports.
SOURCE: Brasil-MME Balano Energtico NacionalSOURCE: Brasil-MME Balano Energtico Nacional
Energy exports (1.000 TPE)Energy exports (1.000 TPE)
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
1970 1975 1980 1985 1990 1995 2000 2005
1.0
00TPE
Fuel oil Oil Gasoline
Diesel Kerosene Other exports
Ethanol
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Petrobras forecasts a growing surplus in oil products for the coming years, fromproduction in new offshore fields.
This forecast is based on tested fields coming into production, less gradualdepletion of old fields.
Recent discoveries of very deep deposits (Tupi), combined with continuousimprovement in exploration and production technology, warrants optimism forBrazilian oil reserves and production over the next decade.
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Brazil increased its oilproduction markedly during
two periods: in the 80s andfrom 1996 to 2003.
The jump in the countrysshare of World oilproduction, as well as in itsshare of South and CentralAmerican production,reflects this greater output.
Brazils share in Worldproduction has been growingmore rapidly than its sharein World reserves.
The recent discoveries in theSantos basin, though, willcertainly increase its share
of reserves by a significantpercentage
SOURCE: BP Energy ReviewSOURCE: BP Energy Review
0%
10%
20%
30%
1965 1970 1975 1980 1985 1990 1995 2000 2005
Brazil/World%
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
Brazil/South+CentralAm
er.%
Brazil / South + C America
Brazil / World
Brazils share inBrazils share in
oil productionoil production
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
1980 1985 1990 1995 2000 2005
Brazil/World(%)
Proved reserves
Oil productionBrazils share inBrazils share in
oil productionoil productionand reservesand reserves
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Brazils proved reserves canmaintain current levels of crude
production for another 12-13years.
The forecast for an additional50% increase in total productionover the next decade requiresnew descoveries and theirdevelopment.
Analysis of the geologicalconditions of Brazil suggest anestimate of undiscoveredreserve of about 4 times currentproved reserves.
SOURCE:MMESOURCE:MME
Brazils estimated crude productionBrazils estimated crude production
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Petrobras forecasts, already for 2010,
a greater increase in oil product thangrowth in demand and refiningoutput.
So Brazil will probably continue toexport part of its crude production,and a growing volume of refined oilproducts.
SOURCE: PetrobrasSOURCE: Petrobras
Production, demand and refiningProduction, demand and refining
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SOURCE: ItaipuSOURCE: Itaipu
Itaipu damItaipu dam
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Brazil is considered to havethe Worlds third largest
potential of hydrelectricenergy.
Canadas potential is about40% of this estimatedenergy.
SOURCE: World Energy Council / MMESOURCE: World Energy Council / MME
The Worlds hydrelectric potentialThe Worlds hydrelectric potential
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Norway and Brazil are the countrieswhich produce most of theirelectricity from hydrelectric plants.
SOURCE: World Energy Council / MMESOURCE: World Energy Council / MME
Worlds largest producers of hydrelectric energyWorlds largest producers of hydrelectric energy
0
50.000
100.000
150.000
200.000
250.000
300.000
350.000
Cana
daUS
ABr
azil
Chin
a
Russia
Norway
Japa
nIn
dia
Fran
ce
Swed
en
GWhperyear
0
20
40
60
80
100
10.000 100.000 1.000.000
GWh / year
Perc
entofelectricenergygenerated NORWAY BRAZIL
CANADA
USACHINA
RUSSIA
JAPAN
SWEDEN
INDIA
FRANCE
Production versus percentage of electricityProduction versus percentage of electricitygenerated by hydrelectric plantsgenerated by hydrelectric plants
Hydrelectric energy productionHydrelectric energy production
Canada is the Worlds largestproducer of hydrelectric energy.
Brazil holds third place, after theUSA.
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Brazils main dams areconcentrated in the
Southeastern region,
but there are smallplants spread over theentire country.
SOURCE: ANEELSOURCE: ANEEL
Main hydrelectric power plants of BrazilMain hydrelectric power plants of Brazil
Electric power plants of allElectric power plants of allsizes and sourcesizes and source
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The concentration of electricgeneration in the Southeastimplies in the necessity of animportant transmission network.
The far North receives power fromVenezuela.
Itaipu binational dam is owned50/50 with Paraguay, but most ofits energy has been bought by
Brazil.
Reaching an agreement on newtransfer prices between Paraguayand Brazil is an upcomingnegotiation.
SOURCE: Brazil-National System OperatorSOURCE: Brazil-National System Operator
Electricity transmission networkElectricity transmission network
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Petrobras forecasts a largeincrease in natural gas
production and consumption atover 19% p.a..
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Natural gas is Brazils main energy source traded with its neighbours.
It also has the greatest growth potential due to South Americas large gasreserves.
-
Natural gas pipeline networkNatural gas pipeline networkMain natural gas reserves in LatAmMain natural gas reserves in LatAm
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Brazil has an important eolicenergy potential, as measured by
speed and regularity of prevailingwinds.
SOURCE: CBEESOURCE: CBEE
Eolic potential of BrazilEolic potential of Brazil
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Only a small part of thispotential, however, has
been harnessed.
Brazils share of theWorlds installed eoliccapacity is small,
and has been increasingat lower rates thanWorld total and that of
main eolic energy users. Energy-generation eolic
equipments still faceimportant import tariffs.
SOURCE: Tolmasquim-Windpower Monthly-New EnergySOURCE: Tolmasquim-Windpower Monthly-New Energy
Growth of World eolic energy capacityGrowth of World eolic energy capacityInstalled MWInstalled MW
10
100
1.000
10.000
100.000
200320022001200019991998
MWi
nstalledcap
acty
Germany
Spain
USA
Denmark
India
Italy
Netherlands
UK
Brazil
World
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Existing nuclear plantsExisting nuclear plantsAngra 1 and Angra 2Angra 1 and Angra 2
in Rio de Janeiro Statein Rio de Janeiro State
Planned Angra 3 plantPlanned Angra 3 plant
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Share of nuclear energy in total domestic supplyShare of nuclear energy in total domestic supply
0,0%
0,4%
0,8%
1,2%
1,6%
2,0%
1970 1975 1980 1985 1990 1995 2000 2005
Sh
areintotaldomesticsupply
Production of electricity fromuranium began in 1984.
Brazils share of nuclear energypeaked at below 2% in the early2000s.
The planned construction of athird plant is as yet undefinedand generates much polemic.
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Since 1970, the compositionof Brazils energy supply has
changed in clear directions:
reduction in the share ofwood and charcoal
increase in the share ofelectric power
increase in the share ofnatural gas
increase in the share ofcane products
SOURCE: MMESOURCE: MME
Composition of total domestic supply of energyComposition of total domestic supply of energy
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Environment
Economic
develo ment
Social development
Technology and scale
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CONSUMPTION
DOMESTIC
PRODUCTIONEXPORTS
IMPORTSINTERNAL SUPPLY
Supply from domestic orforeign sources
Domestic or foreign demand
All mediating transportationand storage networks
Supply chain refers primarilyto physical units, butnecessarily involves economicconsiderations, such as prices,cost and capitaldisbursements.
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WASTE
EMISSIONS
EFFICIENT TECHOLOGYINEFFICIENT
TECHNOLOGY
EMISSIONS
DOMESTIC
PRODUCTION
DESTRUCTION OFNATURAL RESOURCES
INTERNAL SUPPLY
CONSUMPTION
EXPORTS
IMPORTS
What environmentalresources are
affected,transformed ordestroyed for theproduction,transportation andconsumption ofenergy.
What resources andenergy are wastedat any stage of thesupply chain.
To what extent aretechnologies in
actual use the mostefficient givencurrenttechnological
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EMISSIONS
DOMESTIC
PRODUCTIONEXPORTS
IMPORTS
CONSUMPTION EMISSIONS
DESTRUCTION OF
NATURAL RESOURCES
INEFFICIENT
TECHNOLOGYEFFICIENT TECHOLOGY
WASTE INTERNAL SUPPLY
Internationalagreements
National regulations
Subnationalregulations
Physical andinfrastructure context
Technological context
Economicconsiderations
Property and capitalcontext
Labor context
Trade barriers
Cultural practices
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CONSTRUCTION and OPERATION
Brazilian environmental law requires important previous study, publicdiscussion and regulatory approval before building and before operation ofany activity with environmental impact.
CONSUMPTION OF OIL PRODUCTS
Carbon and particle emissions
THE SPECIAL ROLE OF PETROBRAS
Largest company in Brazil
Important international oil company
It has decided on becoming an energy company as its strategy aim.
Investment capacity
Capacity to form public opinion
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NEGATIVE ASPECTS
Construction of dams, flooding of large areas
Transmission lines
Population relocation
Effect on biodiversity
Effect on fish migration
POSITIVE ASPECTS
Regularization of water flow
Increased navigability of rivers
Economic and leisure use
Source for urban water supply
Source for irrigation waterItaipuItaipu
Flooded area: 1350 km2Flooded area: 1350 km2
Protected areas: 109.000 haProtected areas: 109.000 ha
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On average, Brazilian dams flood 0,52 square kilometers for each MW of installedcapacity.
Relation between generation capacity andRelation between generation capacity andKW per flooded area, for 46 largest damsKW per flooded area, for 46 largest dams
Least invasiveLeast invasive
Most invasiveMost invasive
SOURCE: IAEA / Brazilian Dam Committee (CBDB)SOURCE: IAEA / Brazilian Dam Committee (CBDB)
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MITIGATION
Repopulation of river fauna
Reforestation
Creation of new conservation units
Actions in surrounding towns
Building of water locks
Biological monitoring of river basin
COMPENSATION
0%
10%
20%
30%
40%
50%
60%
70%
1.000 10.000 100.000 1.000.000
Potential for energy generation (MW)
Percentdeveloped
AMAZON RIVER
PARAN RIVER
TOCANTINS RIVER
S O FRANCISCO RIVER
EAST ATLANTIC
URUGUAI RIVER
SOUTHEAST ATLANTIC
NORTHEASTATLANTIC
SOURCE: TolmasquimSOURCE: Tolmasquim
Relation between hydrelectric potential andRelation between hydrelectric potential anddevelopment of this potentialdevelopment of this potential
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POSITIVE ASPECTS
These are considered as
essentially friendly tothe environment.
NEGATIVE ASPECTS
Solar plates andbatteries use metalswhich require special
disposal after life span.
Large eolic systems mayaffect certain birdpopulations.
Petrobras wind farm in Northeastern Brazil,Petrobras wind farm in Northeastern Brazil,Mossor-RNMossor-RN
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NEGATIVE ASPECT
Risk of nuclear accident
High construction cost
Very negative public perception of risk
POSITIVE ASPECT
Low operational cost (about 8 times lower than conventional thermoelectricpower plants)
No carbon emissions
CO2 emissions
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2
Brazil ranks low bothin emissions per GDP
and in emissions percapita, among theWorlds 15 greatestCO2 emittors.
SOURCE: IAEA / World Resources InstituteSOURCE: IAEA / World Resources Institute
The Worlds top 15 COThe Worlds top 15 CO22-emitting countries-emitting countries
Relation between environmental quality of developmentRelation between environmental quality of development(CO(CO22/GDP) and intensity of emissions (CO/GDP) and intensity of emissions (CO22 per capita)per capita)
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Should we produce biofuels?
Climate change is now a fact
The question is mostly addressed indirectly:
as an alternative to fossil fuels (end of oil, pollution)
as a competitor for resources which should be dedicated to food
The question is frequently seen only in a geopolitical setting
Though advertising clean energy, oil majors look at biofuels as unwantedcompetitors
The public is bombarded with contradictory information.
What biofuel to produce?
Great variety of biofuels
Lack of understanding of their characteristics and
Lack of understanding of the meaning of these characteristics as to efficiency,carbon emissions etc.
Lack of understanding of the agricultural and industrial contexts of each rawmaterial
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Where and how much to produce of it?
There are rigid physical limits which restrict possible regions for each raw
material.
These physical limits are being more and more affected by greater weatherimpredictability.
There are varying economic limits to production.
There rigid regulatory restrictions on production, domestic distribution andinternational trade of biofuels.
There are fluctuations in the commodity markets (oil, oil products, biofuels,non-fuel products from same raw materials) which condition their productionand their sale markets on a daily basis.
General economic conditions affect fuel and energy earlier and with moreimpact than they do most other industries.
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Under what environment-protection conditions should it be produced?
The conventional wisdom
The research industry
The public-opinion industry
The stakeholders
The regulatory complex
The field
Under what land-holding and labor conditions should it be produced?
Existing regulations versus their practical application
Economic considerations
How much can regulations stretch economic facts?
Global harmonization: why, who, how, cui bono?
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Inputs
land
water
sunlight
fertilizers and pest control chemicals
labor
mechanization
Outputs
air pollution (field-burning, industrial smoke)
water pollution (fertilizers, chemicals,vinass,...)
reduction in biodiversity
products
revenue, employment, development
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
24 hours of night-time24 hours of night-time
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Energy consumption increasedsignificantly in 2001-06 as compared to
1996-2001.
This increase occured outside OECDcountries and mostly in China.
SOURCE: BP Energy ReviewSOURCE: BP Energy Review
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Energy consumption is concentrated indeveloped countries.
Gas per capita consumption is highest inCanada, Russia e Saudi Arabia.
Oil per capita consumption is highest inthe USA, Saudi Arabia, Holland andIsland.
Primary energyPrimary energySOURCE: BP Energy ReviewSOURCE: BP Energy Review
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
In the 70s, GNP increased 4% p.a. morethan energy consumption, indicatingtechnological progress.
This technological step reflected inreduction of energy consumption perGNP unit during the 70s.
Since then, this indicator has remainedstable, while consumption per capitacontinues growing.
FONTE: Brasil-MMEFONTE: Brasil-MME
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
FInal energyconsumption
GDP Population
Averagegrowth
(%p.a.).
% 70s
% 80s
% 90s
% 00s
40
60
80
100
120
140
160
180
1970 1975 1980 1985 1990 1995 2000 2005
Energyconsumption(1970=100)
Consumption per unit of GDP
Consumption per capita
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
There is a clear relation betweenGDP per capita and energyconsumption per capita.
In the 70s, when growth was strong,so was increase in energyconsumption.
During the 80s and early 90s, whenthe Brazilian economy stagnated, sodid energy use.
Since 1996, both have continue theirincrease, but at lower rates thanduring the previous period ofgrowth.
Job creation in the energy sector is amain objective.
SOURCE: MMESOURCE: MME
2,0
2,5
3,0
3,5
4,0
4,5
5,0
5,5
6,0
0,700 0,800 0,900 1,000 1,100 1,200 1,300
Domestic supply of energy per capita
GDPpercapita.
1970
1980
1990
200620062000
Relation between economic development (GNPRelation between economic development (GNPper capita) and energy consumption per capitaper capita) and energy consumption per capita
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SOURCE: IEA and MME for 2002SOURCE: IEA and MME for 2002
OECDBRAZIL
OIL 43 % 42%
COAL 20 % 7%
NUCLEAR 11 % 2%
GAS 21 % 8%
OECDOECD
BRAZILBRAZILWorld consumptionWorld consumptionof selected productsof selected products
0
0,2
0,4
0,6
0,81
1,2
1,4
1,6
1,8
Trigo eSoja
Cimento Ao Plsticos Madei ra
bilhes t/ano
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Social cost of alternative electricity sources
Generation from cane bagass is lowest, but very close to hydrelectric powerplants, large or small, and coal thermo-electric plants.
The high share of taxes in cane-bagass equilibrium tariff, though, shows thatgovernment could reduce this tariff significantly through fiscal policy.
Nuclear and eolic energy remain much more expensive.
SOURCE: TolmasquimSOURCE: Tolmasquim
0 20 40 60 80 100
Eolic
Nuclear
Natural gas
Coal
Small hydrelectric
Hydrelectric plant
Cane bagass
Equilibrium tariff (US$/MWh)
0% 20% 40% 60% 80% 100%
Eolic
Nuclear
Natural gas
Coal
Small hydrelectric
Hydrelectric plant
Cane bagass
Percent of equilibrium tariff
Generation Taxes Connection
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Technology for new sources
fuel cells
cellulosic ethanol
...
More efficient technology for existingsources
solar plates
eolic energy generation
tidal force
geothermic sources
More efficient energy use
Agricultural technology
Plant varieties
Use of water
Use of fertilizers
Output control
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
What are biofuels?
The sugar-cane supply chain
Tecnology and scale in sugar-cane
The inevitable linkage
CANECANE
BEETBEET
CORNCORN
JATROPHAJATROPHA
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
GEOTHERMIC
THERMO-SOLAR
HYDRAULIC
WAVES
TIDES
EOLIC
CURRENTS
PHOTOVOLTAIC
throughdirect use
throughenergy
conversion
through biomass
BIOMASS INTENSIVE IN
STARCH, CARBOHYDRATES,
CELULOSE OR LIPIDS FORBIOFUELS
VEGETABLE BIOMASS FOR
STRAW, WOOD, COAL,CHIPS OR BRICKETS
FORESTAL OR
AGRICULTURAL RESIDUES
FOR DIRECT BURNING ORBIOGAS
SOURCES OF
RENEWABLE
ENERGY
VEGETABLE BIOMASSFROM STRAW, WOOD,
COAL, CHIPS ORBRICKETS
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
COST OF ELECTRICITY US$ / KWhCOST OF ELECTRICITY US$ / KWh
Low HighLow High
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SOURCE: FAO-Global Bioenergy PartnershipSOURCE: FAO-Global Bioenergy Partnership
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SOURCE: FAO-Global Bioenergy PartnershipSOURCE: FAO-Global Bioenergy Partnership
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Biofuels sources are partiallythe same as food rawmaterials.
There are clear natural limitsto the agricultural productionof biofuel raw-materials (land,water).
This restiction imposed on theproduction its raw materialsmeans that biofuels cannot
cover, given currenttechnologies, more than 15%or 20% of the energy demandcurrently supplied by fossilfuels.
AGR
SUGAR +
ETHANOLINDUSTRY
VEGOIL
INDUSTRY
OILREFINERY
FOOD AND
NON-FOOD
AGRI-
INDUSTRIES
FEEDSTOCK PRODUCTION
AGRI-
CULTUREFOSSIL
EXTRACTION
SEED/
NUT
CANE
BEET
CORN
OTHER
OIL FUEL
TRADE
FUEL
DISTRIBUTION
GASOLINE
BLENDING
FUEL
ETHANOL
GASOLINE
GASOLINE
DIESEL
BLENDED
GASOLINE
GASOLINE
FUEL ETHANOL
TRADE
BIODIESEL
INDUSTRY
BIODIESELTRADE
FOOD +
BEVERAGECONSUMPTION
BLENDED
GASOLINE
FUEL
CONSUMPTION
FEEDSTOCK EXTRACTION
PRODUCT
TRADE
FEEDSTOCK PROCESSING
BLENDING +DISTRIBUTION
CONSUMPTION
VALUE-CHAINSECTOR
CRUDEOIL
PRODUCT
B100
SUGAR
TRADE
SUGAR
VEGOIL
TRADE
SUGAR
BIODIESEL
BLENDING
FUEL
ETHANOL
VEGOIL
VEGOIL
VEGOIL
CORN
OTHER
FOOD
DISTRIBUTION
NON-FOOD
DISTRIBUTION
NONFOOD
AGRI-PRODUCTS
CONSUMPTION
SUGAR,
ETHANOL,
CORN,
VEGOIL
PRODUCTSBLENDED
BIODIESEL
DIESEL
B100
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Today they are usually used incombinations with fossil fuels:ethanol-gasoline blends and
biodiesel-diesel blends.
AGR
SUGAR +
ETHANOLINDUSTRY
VEGOIL
INDUSTRY
OILREFINERY
FOOD AND
NON-FOOD
AGRI-
INDUSTRIES
FEEDSTOCK PRODUCTION
AGRI-
CULTUREFOSSIL
EXTRACTION
SEED/
NUT
CANE
BEET
CORN
OTHER
OIL FUEL
TRADE
FUEL
DISTRIBUTION
GASOLINE
BLENDING
FUEL
ETHANOL
GASOLINE
GASOLINE
DIESEL
BLENDED
GASOLINE
GASOLINE
FUEL ETHANOL
TRADE
BIODIESEL
INDUSTRY
BIODIESELTRADE
FOOD +
BEVERAGECONSUMPTION
BLENDED
GASOLINE
FUEL
CONSUMPTION
FEEDSTOCK EXTRACTION
PRODUCT
TRADE
FEEDSTOCK PROCESSING
BLENDING +DISTRIBUTION
CONSUMPTION
VALUE-CHAINSECTOR
CRUDEOIL
PRODUCT
B100
SUGAR
TRADE
SUGAR
VEGOIL
TRADE
SUGAR
BIODIESEL
BLENDING
FUEL
ETHANOL
VEGOIL
VEGOIL
VEGOIL
CORN
OTHER
FOOD
DISTRIBUTION
NON-FOOD
DISTRIBUTION
NONFOOD
AGRI-PRODUCTS
CONSUMPTION
SUGAR,
ETHANOL,
CORN,
VEGOIL
PRODUCTSBLENDED
BIODIESEL
DIESEL
B100
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AGR
SUGAR +
ETHANOLINDUSTRY
VEGOIL
INDUSTRY
OILREFINERY
FOOD AND
NON-FOOD
AGRI-
INDUSTRIES
FEEDSTOCK PRODUCTION
AGRI-
CULTUREFOSSIL
EXTRACTION
SEED/
NUT
CANE
BEET
CORN
OTHER
OIL FUEL
TRADE
FUEL
DISTRIBUTION
GASOLINE
BLENDING
FUEL
ETHANOL
GASOLINE
GASOLINE
DIESEL
BLENDED
GASOLINE
GASOLINE
FUEL ETHANOL
TRADE
BIODIESEL
INDUSTRY
BIODIESELTRADE
FOOD +
BEVERAGECONSUMPTION
BLENDED
GASOLINE
FUEL
CONSUMPTION
FEEDSTOCK EXTRACTION
PRODUCT
TRADE
FEEDSTOCK PROCESSING
BLENDING +DISTRIBUTION
CONSUMPTION
VALUE-CHAINSECTOR
CRUDEOIL
PRODUCT
B100
SUGAR
TRADE
SUGAR
VEGOIL
TRADE
SUGAR
BIODIESEL
BLENDING
FUEL
ETHANOL
VEGOIL
VEGOIL
VEGOIL
CORN
OTHER
FOOD
DISTRIBUTION
NON-FOOD
DISTRIBUTION
NONFOOD
AGRI-PRODUCTS
CONSUMPTION
SUGAR,
ETHANOL,
CORN,
VEGOIL
PRODUCTSBLENDED
BIODIESEL
DIESEL
B100
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Use of raw materials not used as essential for food
jatropha (pinho manso)
rape seed (canola)
castor oil (mamona)
palm oil (dend, babau,...)
cotton seed oil (algodo)
sunflower seed oil (girassol)
Use of land not used for food agriculture
how can this be evaluated?
how can it be inspected?
what are the secondary cross effects? (water, pollution etc.)
Unmasking the hidden agendas Poverty and lack of food has always been present. What was being done before,
what is being done now and what must we do in the future?
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
In the G-8, Canada, France,Germany and the USA arethe countries which have the
largest shares of biofuels intotal primary energy supply(between 2% and 5%).
Large biofuels producers,such as Brazil, India andChina, though, have muchgreater shares(from 20% to 30%).
SOURCE: FAO-Global Bioenergy PartnershipSOURCE: FAO-Global Bioenergy Partnership
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
AGRICULTURAL
INPUTS
CAPITAL
GOODS
CANE
PRODUCER
SUGAR,
ETHANOL
AND ENERGYPRODUCER
BIODIESEL
PRODUCER
AUTOMOBILE
MAKER
FUEL
DISTRIBUTOR
ELECTRIC
UTILITY
FOODINDUSTRY
INDUSTRY
WHOLESALE
RETAIL
TRADING
COMPANIES
WHOLESALEAND RETAIL
CAR
RESELLERS
FUEL
RESELLERS
CONSUMER
FOREIGN
MARKET
RESIDUES
SUB.PRODUCTS
INFRASTRUCTURE
FUEL
RESELLERS
Source:CANAPLAN
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Sugar-cane agriculture
Plant varieties
Minimum water requirements
Effect of irrigation
Minimum sunlight requirements
Maturation and harvest under low rainfall
Just rainfall With irrigation
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Harvesting cane by hand
traditional for 5 centuries
best after burning the field
any topography
intensive in labour
hard labour conditions
difficult for large scale
Mechanical harvesting
does not require burning
requires flat topography
highly intensive in capital
very low use of labour
allows large scale
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Sugar and ethanol industry
design for maximum sugar,maximum ethanol or
intermediary combinations
requires lowest distance fromfield to plant, due to canedegradation after burning andcutting
important industrial economiesof scale up to 4-5 milion tons of
caneper harvest
in Brazil, plants are in useduring only part of the year
there is a great variety of sizes,ages and technologies
as there are multiple
intermediary processes in themill, each phase may usedifferent technologies and maybe designed for different
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Increased scale translates intolower investment and operationalcosts, with diminishing returns to
scale.
Cumulative scale has led to steadily
declining average cost of cane andof ethanol.
SOURCE: W.Bake.SOURCE: W.Bake.http://www.chem.uu.nl/nws/www/publica/publicaties2006/NWS-I-2006-http://www.chem.uu.nl/nws/www/publica/publicaties2006/NWS-I-2006-
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Current production cost of ethanol are below the equivalent of US$ 30 per
SOURCE: J.GoldembergSOURCE: J.Goldemberg
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Energy potential of the sugar cane:
Future uses:
bagass and straw for energy
bagass and straw for cellulosic ethanolequal to 1,24 barrels
of oil equivalent
1 TON of CANE100%
1718 x 103
kal
JUICE
BAGASS
STRAW
1/3 608 x 103
kal
1/3
1/3
598 x 103
kal
512 x 103
kal
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
1983: All1983: Allgasoline in Brazilgasoline in Brazilmust containmust contain22% anhydrous22% anhydrous
2007: 69% of2007: 69% ofnew cars andnew cars andlight vehicleslight vehicles
sold in thesold in thecountry arecountry are
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Cars sold are nowCars sold are nowalmost all flex-fuelalmost all flex-fuel
0%
20%
40%
60%
80%
100%
jan/06 mai/06 set/06 jan/07 mai/07 set/07
Percentflex-fuelintotalsales
Cars
Light commercials
All vehicles
94,0 %
84,3 %
57,4 %
SOURCE: AnfaveaSOURCE: Anfavea
Domestic sales in Brazil of flex-fuel vehiclesDomestic sales in Brazil of flex-fuel vehicles
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
The distribution of cane between sugar and ethanol is dependent on theirrelative prices, but shows a definite tendency towards greater ethanolproduction and consumption.
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Ethanol vessel being loaded atEthanol vessel being loaded atRio de Janeiro,Rio de Janeiro,
Petrobras Ilha dgua terminalPetrobras Ilha dgua terminal
May 2007May 2007
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Brazilian ethanol production in 2007 will belargest ever, but mostly destined fordomestic consumption.
With lower purchases by the US, Europe isstill Brazils option, though the Far Eastremains important for beverage andindustrial ethanol.
SOURCE: KingsmanSOURCE: Kingsman
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
OBTAINING
RAW-MATERIALS
INDUSTRIAL
PRODUCTION
DOMESTIC INTERNATIONAL FOREIGN
MARKETING LOGISTICS DISTRIBUTION
CRUDE OIL
OIL
PRODUCTS
ETHANOL
BIODIESEL
OIL MAJORS
LOCALS
ETHANOL
TRADERS
RECENT BIO-
FUEL FUNDS
OIL
MAJORS
IN BRAZIL
LOCALSMILLS
PL
A
N
TE
R
S
BIODIESEL PRODUCERS
OIL
TRADERS
VEGOIL
TRADERS
A i lt l t
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Agricultural aspects:
type of land and climate required
input and labour requirements
possible productivity per area
natural fuel-potential of raw materials
Economic considerations:
requirements and cost of land, capital investments, inputs and labour
possibilities and costs of agricultural technology
Industrial extraction technologies
Product design (technical requirements, policy limits, blendingcharacteristics)
Adaption of motors
Adaption to climates
U d t d th t h l i i lt l d i d t i l
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Understand the technologies: agricultural and industrial
Understand how production and consumption of each product affects the
environment
Decide how each positive and negative characteristics should be given priorityor penalized
Understand how technologies and products are associated to certifications andtrade barriers
Evaluate how supposed (positive or negative) characteristics are publicized andare used as policy drivers.
Understand the focal origin of fuel and biofuel regulations: the state-owned oilcompany, the oil majors, independent (?) research institutes, independent (?)environmental NGOs
Understand the policy drivers and stakeholders behind fuel and biofuel tradebarriers.
Actual proven requirements and effects of each energy option
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Actual proven requirements and effects of each energy option.
Public perception of these requirements and effects.
Commercial, political and ideological use of the scienceperception gap.
Difficulty or impossibility of fair understanding, discussion and decision onsuch themes.
Certainty that purely economic considerations will continue as the main driverof production and consumption.
Certainty that current decisions will discount future costs by high factors.
As the difference between correct and expensive options versus egoistic
and cheaper options increases, more stringent regulation and stronger policeaction will grow in importance.
Energy companies are investing all over the World
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
Energy companies are investing all over the World
Oil companies increase their exploration and development activities
Equipment suppliers to oil companies increase production
Oil companies seek clean energies as marketing ventures
Oil companies seek clean energies as strategic objectives
Biofuel companies invest in production and distribution
Fuel distribution companies integrate biofuels into their network
Clean energy companies develop new markets
Equipment suppliers for clean energies increase production
Clean energy companies invest in research and development of newtechnologies and products.
Universities and research institutes increase their clean energy activities.
Investors and fund managers look to energy business as a rapid-growth sector.
Governments and legislators seek to understand the energy sectors and reviewregulations.
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
IEA has forecasted variousscenarios of demand for oil andits products.
Even considering the openingto production of new oil fields,there will be still much unmetdemand requirements.
Annual capital investments inthe oil industry are estimatedincreasing from US$ 400 billion
today to over US$ 1 trillion inthe next decade.
SOURCE: PlattsSOURCE: Platts
Industry specialists foresee annual growth
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ENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURAENERGY IN BRAZIL A PRESENTATION BY HEITOR MOURA FEBRUARY 2008FEBRUARY 2008
y p gratesof over 15% in investments in clean energytechnologies during the next decade,
of which:
biofuels: 14,7 % p.a.
wind energy: 13,0 % p.a.
solar energy: 16,1 % p.a.
fuel cells: 27,3 % p.a.
SOURCE: Clean EdgeSOURCE: Clean Edge
Some hypothesis adopted by Petrobras in its strategic planning:
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Some hypothesis adopted by Petrobras in its strategic planning:
It will produce heavy oils of decreasing quality
There will be greater availability of natural gas.
There will be lower consumption of fuel oils.
There will be a greater pressure from society for the production of cleanfuels.
There will a reduction in consumption of fossil fuels as motors become moreefficient and alternative fuels are substitutes for fossil fuels.
Economic margins will be low.
SOURCE: PetrobrasSOURCE: Petrobras
.
Petrobras aims to direct at least 0,5% of its total investments to clean energies:
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biodiesel and biomass
eolic
photo-voltaic
By 2010, it aims to produce 96 MW of power and 2.300 barrels per day ofbiodiesel.
SOURCE: PetrobrasSOURCE: Petrobras
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Light vehicle emission levels in Brazil had reached US standards by 2000.
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From current risks
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internal security for production and distribution
autonomy from international trade
protection from foreign price fluctuations
protection from extreme weather fluctuations (hydrelectric powergeneration)
need for operational reserves
From future risks
change to renewable sources
increased generation capacity for growing demand
Environmental risks
urban air pollution
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Presented in February, 2008
ENERGY IN BRAZIL
heitormoura@yahoo.com.br
Heitor Moura
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