Grupo de Economia da Energia

Posts Tagged ‘energy policy’

The evolution of the Brazilian government’s natural gas policy

In natural gas on 05/12/2011 at 00:37

By Marcelo Colomer

Almost a year after Decree 7,382 by the former President of the Republic Luiz Inácio Lula da Silva, a seminar was held in Brasilia on the challenges of the new regulatory framework for the natural gas industry in Brazil. The event occurred in the last 29, from a joint initiative of the Ministry of Mines and Energy (MME), National Agency of Petroleum, Natural Gas and Biofuels (ANP) and Energy Planning Company (EPE).

The main objective of the event was to discuss with the sector agents the main challenges for implementing the new regulatory framework for the natural gas industry. According to the MME Secretary, Marco Antônio Almeida, there is recognition that Act 11,909 and Decree 7,382 do not cover issues relating to gas regulation, thus requiring additional regulatory acts. According to him, this is a major challenge for MME and ANP. Helder Queiroz, ANP Director, states that development of new resolutions and ordinances and review of regulatory acts in force are essential to bind ANP rules to the new industry’s regulatory framework. Leia o resto deste post »

Pre-salt: an obstacle to renewable energy?

In oil, renewable energy on 28/11/2011 at 00:09

By Edmar de Almeida 

Recent accidents involving oil spillage in the Gulf of Mexico and now in the Campos Basin raise an issue on Pre-salt exploitation in Brazil: Would Brazil going through an irrelevant adventure with the imminence of substituting renewable energy sources by oil?

This question is linked to the idea that oil is a former energy and there is no worth to mobilize society’s resources in a business doomed to shrink and disappear quickly. This idea has no support nowadays.

Prediction studies of global energy matrix show oil and natural gas still prevailing in long-term horizon. According to the International Energy Agency, these energy sources, together with other fossil fuels, will account for 75% of global energy matrix in 2035, the most optimistic scenario for renewable energies.

This type of prediction is confirmed by other government agencies and major energy companies worldwide. We can say that oil and gas will keep a prominent role in the long transition to a decarbonized economy. Thus, Pre-salt is a significant comparative advantage for Brazil. Our country could take a leading role in the energy transition, not only because of its large endowment of oil and gas, but also because of its significant potential for renewable resources. Leia o resto deste post »

Reduction of CO2 emissions: distributing costs and sacrifices

In energy on 07/11/2011 at 00:49

By Ronaldo Bicalho

According to our last article, thinking about the transition between the current economy based on intensive use of fossil fuels and a future economy relying on renewable energy as a defined process with a single trajectory, a single timing and unique content, is a simplification that does not help in understanding the nature of this transition, its possibilities and hindrances.

Indeed, the transition is an undefined and open process with multiple paths, content and possible times.

In other words, there is no a single transition, but various transitions.

In this sense, analyzing nowadays the possible evolution of the energy sector in the world involves the analysis of these various transitions.

Mapping transitions

To identify these different possibilities of transition it is essential to map the different ways of noting the trade-off energy security versus climate change and the various forms of facing it.

Thus, we can consider generally the reduction in the intensity of the climate change process as the main objective and, thereafter, to evaluate the type of negative impact (cost) the reduction of CO2 emissions has on energy security, according to several hypotheses to achieve this reduction. Leia o resto deste post »

Energy security and climate change: the hard convergence

In energy on 19/09/2011 at 00:30

By Ronaldo Bicalho

Two main issues dominate the current debate about energy: climate change and energy security.

Initially, these issues belong to different areas of public policy; however, the recent development of events, both in energy and environment levels, made the interdependence between them increases significantly.

According to this, the peculiarity of the current moment is not simply the presence of the environmental issue – climate change – in the energy debate, but the prominence acquired by the subject in the evolution of the current energy situation. As a result, it is not enough to recognize the need to incorporate the environmental variable in the debate, but recognize the need to incorporate it as a relevant issue as energy issue (energy security) is addressed.

The need to balance environmental and energy dimensions in the discussion on energy results from the strong presence of fossil fuels in both climate change and energy security.

For the environment area , fossil fuels are the main cause of climate change as a function of temperature increase generated by the concentration of greenhouse gases in the atmosphere; in particular, the CO2 from burning fuels.

For the energy area, fossil fuels play a key role for ensuring the energy supply necessary for economic development and social welfare, due to a set of attributes – capacity of storage, density, availability and control – which allows the use of these fuels at scale levels and cost extremely advantageous. Leia o resto deste post »

Fossil fuels and global warming in the complex energy policy game

In energy on 08/08/2011 at 00:30

By Renato Queiroz

By formulating and re-evaluating energy policies, countries face an issue: future energy matrixes should reflect the actions to decrease at an increasing rate the burning of oil, natural gas and coal, in order to stop the increasing concentration of (CO2) carbon dioxide emissions. This issue is followed by reports made by recognized organizations, such as those by Intergovernmental Panel on Climate Change (IPCC), warning that if such actions do not occur there will be rising of sea level, droughts in some regions, climate changes, etc.

Another example is the document published by the Asian Development Bank, on August 2, 2011, “Asia 2050”, whose findings were published recently by the press.  Established in 1966, such institution, whose objective is to promote economic growth for developing countries in Asia, warns in the document mentioned that the impact of climate change is among the main obstacles to the region to recover the dominant economic position before the Industrial Revolution. Leia o resto deste post »

From fossil fuels to renewables: the hard energy transition

In energy on 18/07/2011 at 00:30

By Ronaldo Bicalho

To prepare an energy policy that manages the hard transition from a fossil fuel economy to a low carbon economy is not an easy task.

The massive replacement of fossil fuels by renewable energy sources involves significant technological, economic and institutional changes. These changes go beyond the energy sector and cover subjects related to a set of values associated with the crucial role of energy in economic development and social welfare and relationship with natural resources and environment derived precisely from this centrality.

The compatibility between the imperatives of energy security and climate change, by penalizing fossil fuels and incentives to renewables, has been demonstrated much more complex than previously conceived.

The idea of bringing together the best of both worlds – the self-sufficiency and low emission, increased energy security and combat the factors causing climate change – concerning the expansion of renewable sources in the energy matrix has been facing relevant technological, economic and political-institutional obstacles.

The first obstacle is technological and concerns the requirement of significant advances in renewable technologies so they can actually compete with traditional technologies. These advances are related to overcome the problems associated with low capacity of storage, density and scale characteristics of the current stage of development of renewables. Leia o resto deste post »

Energy security and climate change: different views, several policies

In energy on 23/05/2011 at 00:30

By Ronaldo Bicalho

Energy security and climate change are the two main axes currently surrounded by the energy policies in the world.

Then, to ensure the supply of energy and reduce emissions of greenhouse gases have become major strategic objectives of Nation States in the energy field, with significant impact in the desired composition of the future energy matrix and setting the most appropriate strategies to achieve it.

However, the evaluation of the real consequences of these two objectives at the heart of energy policy needs a qualification. Especially, because Nation States perceive, hierarchized and insert into their set of public policies such goals, which, after all, translates into the amount of resources that, in fact, these States are willing to mobilize to achieve them. Leia o resto deste post »

Ethanol: from promise to problem

In biofuels, ethanol on 16/05/2011 at 00:30

By Luciano Losekann

Until recently, the Brazilian government highlighted the country as a world’s top ethanol exporter. Accordingly, in 2007, the Brazilian government published a study indicating the possibility of Brazil using  ethanol to meet 5% of global gasoline consumption and, with more advanced techniques, such portion could reach 10% in 2025 [1], with a production of 205 billion liters of ethanol in the country.

Four years later, perspective is completely different. The recent scenario of ethanol in Brazil is characterized by difficulties in supplying the fuel, high prices and need to import the product.

In April, prices of hydrous ethanol and anhydrous ethanol in power plants in São Paulo showed the maximum value ever of the past 10 years. On average, the price of hydrous ethanol at gas station reached 40% over the same period in 2010. As the price of anhydrous ethanol mixed with gasoline tripled during the same period, the price of gasoline was also affected, increasing 15%. Leia o resto deste post »

Fukushima Nuclear Accident: a dilemma for the world energy planning

In nuclear energy on 11/04/2011 at 00:30

By Renato Queiroz

The accident in Fukushima Daiichi power plant, located about 250 km from Tokyo, and the classification of the French Nuclear Safety Authority (ASN) on the explosions occurred in the Japanese generation plant that reached the level 6 (serious accident), in an international scale for nuclear events until level 7 [*] engraved energy experts worldwide. That adds a strong element of uncertainty for the global nuclear industry.

The INES level (6) means serious accident, stating that there was release of radioactive material and as consequences the adoption of measures to protect the population in the affected area.  This reflects the world public opinion, causing major concerns and pressure against the generation of electricity through this source.

Shortly after the accident, some experts, under the impact of the tragic news and images in real time, agreed with the thesis that the revival of the nuclear industry was being aborted.  Perhaps the question not discussed is: Without using nuclear energy, how can we meet the increasing consumption of energy required by societies in the coming years in a context of reducing emissions of greenhouse gases? Leia o resto deste post »

A future agenda for biofuels policy in Brazil

In biofuels on 17/01/2011 at 00:30

By Renato Queiroz

The Brazilian Association for the Study of Energy – AB3E – held on December 14, 2010, in Rio de Janeiro, a seminar to discuss the agenda for the Brazilian energy policy for the next administration. In the specific panel, where agenda for biofuels was discussed, there were two approaches: one from representative of Petrobras, Eduardo Correia, Competitive Strategy area, who identified a number of critical uncertainties that influence strongly the biofuels market, developing initially from these uncertainties four exploratory scenarios and selecting two scenarios for the next 20 years, and the other one from professor José Vitor Bomtempo, Energy Economics Group, who assessed the future of the biofuels industry in a strategic approach with assumptions that break current paradigms.

This article presents the considerations from these experts and question on the topic that will surely be discussed by energy policy agenda developers for future years. Leia o resto deste post »

Brazil: The Pre-salt and State control

In oil on 22/11/2010 at 00:34

By Ronaldo Bicalho

The ongoing changes in the institutional framework related to oil exploration in the Pre-salt includes an overview of the strategic role to be played by the Brazilian petroleum sector different from that one defined previously, both with respect to the newly global Brazilian insertion and supporting conditions of such insertion.

The core of this change is focused exactly on expansion of the State control over the exploitation of the Pre-salt resources, in order to achieve maximum benefits from such exploitation, under a long-term strategic perspective that transcends the boundaries of the oil industry.

Thus, changes related to the institutional framework of the Brazilian oil sector is not a merely discussion about the advantages and disadvantages of exploitation systems – concession agreement versus production sharing agreement -; advantages and disadvantages of Petrobras’ interest in all consortia; advantages and disadvantages of Transfer of Rights and Petrobras’ capitalization; advantages and disadvantages of establishing a new state-owned company; and so on. Leia o resto deste post »

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

In electricity, natural gas on 20/09/2010 at 00:30

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. Leia o resto deste post »

The future of biofuels IV: Brazilian position

In biofuels on 06/09/2010 at 00:40

By José Vitor Bomtempo

In the previous article, we discussed the nature of the ongoing innovation process. The importance of this process is that its evolution will define the structure of biofuels and bioproducts industry of the future. As a result, policies and strategies regarding the future of the biomass-based industry can not ignore this new structure under construction, due to losing current competitiveness later.

Our previous analyzes suggest that there are interesting opportunities ahead. The essential question is: Have strategies and policies in Brazil taken into account the opportunities and threats that this process brings us? Or do we believe undoubtedly that our competitive ethanol from sugar cane – which gives us an enviable competitive position in the current industry – is enough to ensure a prominent position in the industry of the future as well?

The two questions above summarize an issue that seems crucial to consider: competition in the industry of the future tends to be considerably different from what we have today in ethanol industry. The fact that we are leaders in this game – the first-generation biofuels – ensures us not necessarily a leadership position and even a prominent position in the industry of the future. Leia o resto deste post »

The inexorable interdependence of Brazilian energy policies

In energy on 30/08/2010 at 00:30

By Helder Queiroz

The discussion on energy issues has been guided, at international and national level, about the future of the production and use of energy sources, which can not be any longer dissociated from policies that aim to achieve 3 goals simultaneously: security of energy supply, decreasing of energy dependence by Brazilian states and mitigation of impacts of climate changes caused by greenhouse gases, especially from the burning of fossil fuels. There is nothing trivial in reconciling these objectives, and they indicate probably an increasing importance of the binomial Energy-Technology in the process of finding solutions.

In the case of the energy industries, there are negative externalities, in variable degrees, regarding the production and use of all means of energy. For this reason, the State plays a fundamental role in both establishment of energy policy guidelines and application of economic and tax instruments required to mitigate externalities and securing energy supplies.

In Brazil, for decades, the guidance for energy policies, since the first oil crisis, implemented by many governments, was the attempt to achieve self-sufficiency in oil. This is an outstanding aspect of government guidelines for the Brazilian energy sector. The results are widely known. Although Brazil has to import light oil to balance its refining process, the degree of dependence in oil imports is now close to zero. And the possibilities unveiled with the important findings of the Pre-salt, even with major technological and institutional challenges to address and overcome, set the country in a privileged position regarding the allocation of energy resources. Leia o resto deste post »

Evolution of the institutional framework for energy industries in Brazil

In energy on 01/03/2010 at 01:30

By Edmar de Almeida 

Since the 1990s, the energy sector in Brazil has been a laboratory seeking a new form of industrial organization and a new institutional framework that will enable the introduction of private capital, without compromising security of supply. The relatively high rate of growth relate to energy demand and the large size of the Brazilian economy represent a major challenge to ensure the level of investment necessary for the security of energy supply.

The liberalization of energy sector in the 1990s tried to cut down the State’s role in this activity. This reform had no desired results. Private investment has failed to ensure the expansion of the Brazilian energy sector on the relevant volume and celerity. Moreover, several specific aspects of the Brazilian energy market represent important obstacles to private investments: i) marginal cost of increasing expansion, ii) presence of major energy state-owned companies, iii) significant uncertainties about the trajectory of energy prices, iv) lack of expansion planning for energy supply. Leia o resto deste post »