The divergent integration of the natural gas and electricity industries in Brazil

By Luciano Losekann

The movement of convergence of the natural gas and electricity industries characterized the global energy industry over the past 20 years. In OECD countries, the use of natural gas for generating electricity increased at a rate of 6% per year during this period and its participation in the generation matrix increased from 9% to 23%. Currently, the portion of natural gas is higher than nuclear one and lower than coal one.

Some dynamic factors explain this: (i) the discovery of significant natural gas reserves and interconnection of markets have changed the perspective, especially in Europe, natural gas as a product with limited availability and reserved for more noble purposes, (ii) the expansion of combined cycle turbines causes generating electricity from natural gas more efficient, increasing its competitiveness against other sources, and (iii) liberalization of industries reduced institutional barriers to new entrants.

Belo Monte: the paradox of plenty

By Edmar de Almeida 

The bid of Belo Monte hydroelectric power plant has raised a great debate in Brazilian society about the economic and environmental feasibility of the project. A large number of political and economic agents has been reporting the negative aspects in terms of environmental, economic and even electoral issues related to the project. Nearly always those who seek to point out the problems related to the project do not analyze the advantages and disadvantages of energy alternatives to Belo Monte. And they think that scarcity is not an issue to be considered. The false premise of the debate on Belo Monte in Brazil is that there are much better options in terms of economic and environmental instead of building the plant in the Xingu River.