Rich in natural resources, Brazil shows a marked predominance of hydroelectric power plants. Built in different hydrographic basins these plants represent 85% of the installed power capacity and are connected by lo​ng transmission lines.
This scenario results from a period when the following factors prevailed:

  • Availability of a large hydroelectric potential close to consumer centers;
  • Feasible construction of large pluriannual accumulation dams;
  • Less transmission trunks needed;

Currently, the conventional thermoelectric and nuclear plants and alternative power sources enjoying incentives (such as wind power and the Small Hydroelectric Centrals – PCHs), been the target of an increased demand. By diversifying the generation complex with these options, it is expected that the expansion required to meet country demand will be attained.

Brazilian hydroelectric potential is still enormous. But, the existence of projects with a large generation potential in socially and environmentally sensitive areas adds to the significance of investing in non-hydroelectric power sources.
In the long run, this stance will prevent any unbalance between demand and firm energy supply (ballasted) , considering the possibility of periods of drought.

Brazilian Electric Sector Model is designed Law 10.848/2004, regulated by Decree 5.163/2004. The key objectives of this model are: assure the safety of energy supply, promote low energy rates or tariffs and universal service to low income consumers.

Several actions were taken towards the achievement of this goal:

  • Separation of power generation, distribution, trade and transmission, thus boosting competition in the sector;
  • Establishment of the Regulated Contracting Environment (ACR) and of the Free Contracting Environment (ACL). The Generation and Distribution agents belong to the ACR. Power Generation, Traders, Importers and Exporters and Free Consumers are included in the ACL (understand each one’s role);
  • In the regulated environment, power is purchased by distributors in auctions that are governed by the lower rate criterion. The lower cost of power purchase tariff rate must be transferred to the tariff charged from captive consumers (generally small consumers);
  • In the regulated environment, contracting of 100% of distributors energy demand is required; adoption of a new method enabling a more realistic calculation of the energy balances (guaranteed energy or venture physical assurance);
  • Brazil is the 9th largest energy producer in the world (403 thousand GWh),International Energy Agency IEA) data revealed.
  • It is estimate that Brazilian population increase by 2030 – 53 million inhabitants – is comparable to the populations of Spain (43 million) and Portugal (11 million) added together. This is why the energy matrix planning is so critical.
  • Nowadays, the private sector owns a 65% share of distribution, 21% of generation and 15% of the national power transmission lines.
  • The use of coal as fuel for the energy sector should grow from 9% to 14%. These data come from the Energy Expansion Ten Year Plan (PDE) 2007-2016, prepared by Energy Survey Company (EPE).
  • Power generation in Brazil represents just 1.4% of total of Greenhouse Gases (GHG), against 81.4% of deforestation. All this information was published in 2004 Brazilian GHG Emission Inventory


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