The energy sector in Brazil (and around the world) has been hit hard by the impact of COVID-19. Quarantine – indispensable to reduce the exponential expansion of the affected population – has led to the paralysis of part of the productive activity, resulting in millions of new unemployed, in the dramatic reduction of transport and, consequently, in the consumption of energy.
One obvious indication of this impact is the significant fall in the cost of the barrel of oil and the reorganization of this sector that has abandoned its expansion plans until economic activity recovers, which may not take place for 5 to 7 years.
This is an unprecedented crisis – except for the great depression of the 1930s, almost 100 years ago – but also an opportunity to reorganize the sector on a more resilient basis and one that is more aligned with the objectives of sustainable development, including the reduction of greenhouse gas emissions and other local pollutants. Priority must be given to the abandonment of electricity generation using coal in the southern region of the country, where the oldest plants of this source are located.
The electricity generation matrix in Brazil is predominantly hydroelectric (63.2%), followed by thermal (24.9%), wind (9.1%), solar (1.7%) nuclear (1.2%).
The plants that use coal represent approximately 12% of the installed capacity in thermal generation, and are particularly polluting.
The 2029 ESP [10-Year Expansion Plan], prepared before the COVID-19 crisis, already envisaged the decommissioning of the coal-fired power plants, together with others powered by fossil fuel, for technical, economic and contractual reasons. The power plants using diesel oil, fuel oil and natural gas have no reason to be activated in the current situation of oversupply. However, the coal-fired plants continue to generate for the National Interlinked System (SIN).
What is proposed in the report is the anticipation of the decommissioning of these generating plants and the coal mining that currently supplies them. The early decommissioning is also proposed for other fossil fuel plants, which are already scheduled to be removed from the electric system over the course of this decade.
The maintenance in production of these plants consumed R$ 0.7 billion, in 2019, in subsidies referred to as “national coal burning.” These annual subsidies began in 1973 and were incorporated into the CDE (energy development account) in 2002, always in updated amounts of over R$ 1 billion per year. This has been repeated for decades and their elimination has always been postponed, despite the low efficiency of the plants and the environmental problems caused by them.
Therefore, the use of these resources from the CDE to anticipate their closing, makes room for other enterprises that can use the labor affected by the decommissioning (about 6,000 workers), including the decommissioning of the areas degraded by mining and their remediation.
Professor José Goldemberg
University of São Paulo
Institute for Climate and Society
STUDY LAUNCH WEBINAR
The low economic performance of recent years and, also, the sharp drop in economic activity due to the COVID-19 pandemic generated an oversupply of electricity in Brazil. At the same time, we have a series of thermal plants scheduled to be shut down in the next 10 years. Is it possible to take advantage of the opportunity of the oversupply to advance the decommissioning of these thermal plants? What would be the benefits? What difficulties need to be overcome? Meanwhile, Congress is discussing temporary and emergency measures aimed at the electricity sector due to the coronavirus pandemic and the sectoral modernization process. IDEC and iCS held this webinar, with the support of ClimaInfo, last July 14th to discuss the topics. The online meeting was attended by deputies. Watch it!