Economy & Energy
Year II - No 10
September/October 1998

ollaoro.gif (978 bytes) Main Page
ollaoro.gif (978 bytes)Bolivia- Brazil Gas Pipeline
ollaoro.gif (978 bytes)Useful Energy Balance
ollaoro.gif (978 bytes)The Brazilian Crisis
ollaoro.gif (978 bytes)Thermoelectric Power Station in the north of Espirito Santo
ollaoro.gif (978 bytes)e&e Links

Graphic Edition:
Editoração Eletrônic
Friday, 18 July 2003.


Genserico Encarnação Júnior
English Version
Frida Eidelman


After long and exhaustive negotiations, Escelsa and Petrobrás have agreed with almost everything in order to construct as partners the first large thermoelectric power plant in Espirito Santo. Just a small technical impasse was left which might provoke less attractiveness in what concerns the applied capital. By the agreement, Escelsa would be responsible for supplying all the necessary money and Petrobrás would supply natural gas during 15 years. In times of crisis, Escelsa has asked for a longer time schedule in order to enter such a business. It has not withdrawn the project from the Board’s agenda. It studies satisfactory forms of financing instead of applying its own resources. With the present high interests policy, making financial applications are better business than productive activities investments. Bankers and pension funds directors are much sensitive to that.

The thermoelectric project considers a minimum capacity of 150 mega-watts (MW). This means the generation of little more than 15% of the total needs of a state that imports about 80% of its electrical energy. It means almost to double the present generation capacity of Escelsa.

With that decision made by the electrical energy concessionaire the state government is free to look for alternative investors or investors that might form with Escelsa and Petrobrás a new entrepreneurial arrangement. This is what ADERES is doing on behalf of the Government. Without mentioning names, in its portfolio there are more than ten interested candidates who have visited it and have expressed their intention to participate in this business.

The economy of Espirito Santo, mainly the northern region, depends on the undertaking for its development. Its realization cannot be delayed. By contacting the interested candidates, the Government will show the means available to the project, including the fact that it is situated in Sudene’s area, defending its localization farther north, namely in São Mateus municipality. This aims at motivating the desirable decentralizing of economical growth, favoring the northern part of our territory.

In undertakings of this nature it is necessary to harmonize development policies and entrepreneurial strategies. Locating the thermoelectric power plant farther north in São Mateus will have as a consequence the spreading of more powerful electrical energy transmission lines over a larger portion of our territory in a fast way.

In the same way, by allowing cogeneration activities, it will motivate the creation of new industrial activities in its surroundings. Cogeneration implies the simultaneous production of electrical power and steam and the use of both in new industrial processes.

This aspect has great importance in times of privatization, neoliberalism and globalization. The Government, which is no more an entrepreneur, has to interact with those who play this role, trying to conciliate regional and social aspects with entrepreneurial ones.

That was the case, for example, in the design of the Bolivia-Brazil gas pipeline. Should the entrepreneurial ideas prevail, natural gas would not reach the southern region of the country, it would have stopped in São Paulo, the largest market, granting easily the economical viability of the project.

The operation to be accomplished with the decision taken by Escelsa consists in inviting new partners of no more than exchanging the partners’ position, in order to build the thermoelectric power plant without further delay. The project is irreversible because it is economically viable and has a definite advantage: natural gas reserves have already been discovered (5 billion cubic meters) and Petrobrás has to use them. That’s why this company is highly interested in negotiating with new partners.

Exploratory activities are in course in Espirito Santo’s northern offshore and expectations are very high. According to Petrobrás, it is possible to discover there 30 billion cubic meters. Therefore, the studied capacity for the power plant is considered a minimum .

This project, associated with the Cabiúnas (RJ) – Vitoria (ES) gas pipeline, this one already included in the Federal Program "Brazil in Action" which will allow, among other things, the construction of another thermoelectric power plant in Great Vitória with larger capacity (500 MW), will change the State’s present situation in what concerns the supply of electrical energy.

This energy infrastructure network should also be considered as a national integration undertaking. It is halfway for the interconnection of the center/south/southwest gas pipeline network with that of the northeast and one possibility of, via the Rio Doce valley, to supply this region in the future, extending itself up to the ferrous quadrilateral region of Minas Gerais.

Espirito Santo will be no more the end of line of the national electrical system but will become instead the hyphen of another Brazilian energy system.


The author is an economist from ADERES and Executive Secretary of the State Energy Chamber.

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