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Unformatted text preview: The Whitehead Journal of Diplomacy and International Relations Brazil: Keeping the Lights On by Susana Moreira I n 2001, Brazil endured severe power shortages that resulted in mandatory rationing and ultimately, in a significant reduction of GDP growth. 1 Worse than the personal inconvenience and economic contraction was the embarrassment all Brazilians felt for what had happened. The “country blessed by God” had shown the world, once again, that it was unable to put its vast natural resources to good use. Brazil barely escaped forced electricity rationing; however, there is widespread belief among energy experts that rationing may yet occur within the next four years. This paper starts with an overview of the main features of Brazil’s power sector, reviewing the latest available production and consumption statistics. It continues with a discussion of the potential power generation gap in Brazil. The central section of this paper focuses on the elements of an integrated strategy for Brazil to ensure the provision of electricity for its people. The conclusion highlights the importance and urgency of this issue for Brazil and its region. O VERVIEW Electricity services are critical to economic development and the elimination of poverty. Like most countries, the state has played a central role in electricity devel- opment in Brazil. In March 2004, Brazil approved a new electricity sector model, in which the central government reassumed several of the coordinating responsibilities it had forsaken in the privatization efforts of the 1990s. In addition, the new model reformulated the incentive structure and the energy-planning system, in an effort to increase security of investments in energy generation and transmission. It also introduced an energy-purchasing pool and established the existence of “new” and “old” (existing) energy sources, which are to be sold under different rules. 2 Hydropower Generation Dominance Since 1970, hydropower has been responsible for over 80 percent of Brazil’s electricity production. 3 In the last five years, Brazil’s electricity production increased 23.2 percent. Over 56 percent of this increase was produced by hydropower. 4 In 2007, hydropower represented 85.2 percent of total electricity production, including 7.9 percent Susana Moreira is PhD candidate in Latin-American Studies at the School of Advanced International Studies (SAIS), Johns Hopkins University, Washington DC. 115 MOREIRA The Whitehead Journal of Diplomacy and International Relations imported from Itaipu’s hydropower plant in Paraguay. At this level, hydropower’s share of Brazil’s electricity production is substantially higher than the world average (16 percent)....
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- Fall '08
- Energy development, Electricity generation