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Brazil may assess the environmental benefits of electric power sector

Brazil may assess the environmental benefits of electric power sector

Brazil considering assessing environmental benefits in electric power sector
Brazil considering assessing environmental benefits in electric power sector

Brazil launched a public consultation to determine guidelines for the implementation mechanisms that will consider environmental benefits in the electric energy sector. 

The goal is to change the local system of assessing energy sources, including carbon emission-related costs. 

Local experts say the initiative could encourage the expansion and use of renewable energy projects. However they caution that tangible results will not be achieved without overcoming many hurdles. 

The ReportThe government made the results of three workshops that EPE, federal energy research company, organized in 2021. The third was co-organized by the International Energy Agency (IEA). 

According to the ministry of mines and energy (MME), the agenda is important in light of the potential opportunities that Brazil’s commitment of carbon neutrality by 2050 could offer for the sector.

Ricardo Baitelo (project coordinator at Iema), believes that the introduction of mechanisms for the evaluation of environmental benefits could increase the insertions of renewable energy sources in the energy matrix. This would also allow for the inclusion of external factors that are not yet included in the cost for energy.

However, it is important to consider other important attributes when assessing greenhouse gas emissions, such as the emission or use of water by energy enterprises. These are not yet discussed in a systematic manner, he said to BNamericas. 

The debates about the environmental benefits of the electric power sector is not new. The Escolhas institute published in 2018 a study on the true costs and benefits of electricity generation sources. It evaluated their different attributes such as greenhouse gas emissions. 

The purpose was to encourage the federal government’s change in strategy of selecting energy sources based primarily on the lowest price per megawatt hour, as the cheapest sources could have social and environmental consequences that are not included in the calculations. 

Escolhas, in a new report last year, concluded that a thermoelectric power plant would not be economically feasible. Hydropower projects would lose 35% to their internal return rate if environmental factors were taken into account during the economic and financial analysis. 

If the public consultation leads to practical measures, there would no more large-scale thermoelectric and hydroelectric plants. Additionally, there would be a massive stimulus for solar and wind power. This is not hindered in part by the analysis of economic returns when environmental costs are incorporated. Srgio Leito, director of the institute, told BNamericas. 

But he is pessimistic about the outcome of the consultation, considering this is the last year of Jair Bolsonaros presidential term (notwithstanding the fact that he may win a second term in October) and also taking into account the environment-unfriendly track record of his administration.  

The government’s performance is not up to par. The thermoelectric has been the most sought-after source of expansion. This was due to the privatization of Eletrobras. Leito pointed out that mandatory thermal energy contracting was inserted. 

Another controversial decision was the recent approval of a law which creates a public policy of support for the Santa Catarina coal sector, and also extends authorization for the Jorge Lacerda thermal power complex for 15 year starting in 2025.

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