e&e No 27
João Antonio Moreira Patusco
The expansion of energy supply cannot be planned for the next elections or to satisfy vanities, it must be planned for the next generations. The implementation of large electrical projects can cover periods equivalent to three mandates. In this context, the Decennial Plan for Electric Energy Expansion, annually updated, has been the official instrument for communicating the forecasts of electricity demand and offer.
For electricity demand forecast, macroeconomic scenarios were proposed which have been modified according to the structural conditions of the period. Therefore, the hypothesis concerning the GDP (Gross Domestic Product) growth were around 12% annually at the start of the seventies, 7% annually at the end of the same decade and 4.5% annually from the start of the eighties on. It should be mentioned that these scenarios were not and are not officially provided by the Government’s economic area but there is the official approval of the Expansion Plan as a whole. It turned out that the real GDP performance in the period 1980/1990 was only 2.03% annually, i.e., a performance that did not reach half of the expansion forecast for the Electric Sector and non the less we have supply problems.
The economic recession in the first years of the eighties caught the Electric Sector with expansion plans for an economic performance of 7% annually and with these conditions the decade started with a large electricity offer and a good number of generation projects in progress. In 1983 investments in the Electric Sector reached 24% of the total investments compared to the historical average of 10%. The country had experienced good economic performance but with commercial deficits and increase of the external debt. With the increase of the international interest rates resulting from the 1979 petroleum crisis and the high dependency on petroleum (85%), the Country became even more vulnerable to external conditionings. Some of the adopted solutions were a fast growth of the metallurgical industry aiming at exports and freezing or delay of electric energy undertakings.
Therefore, in the period from 1980 to 1990 the steel exports changed from 1.4 million tons to 9 million tons, the aluminum exports from 12 thousand tons to 610 thousand tons and those of ferroalloys from 164 tons to 430 thousand tons. In the nineties, these exports kept growing but at a slower pace. These sectors that are electricity-intensive, together with the large penetration of electricity in the residential and commercial sectors gave rise to a 5.1%-annually growth for this source of energy in the last 20 years. Therefore, even with a GDP much below the forecast, electricity consumption reached levels close to that forecasted, as the GDP elasticity were well above of the anticipated one.
Presently, we export about 20TWh of electric energy aggregated to steel, aluminum and ferroalloys. The physical exports of these products added only 0.5% to the Brazilian GDP, but the aggregated electricity is equivalent to 90% of the electricity consumed in the food plus beverage plus textile sectors (4.5% of the GDP) or 70% of the electricity consumed in the electric-electronic plus civil construction plus transport material plus shoes plus rubber plus furniture plus glass sectors (8% of the GDP). We export steel at US$ 240 per ton and import low-quality manual tools at US$400 a ton. We could export hoes at US$ 1500 a ton.
The exports, the imports and the GDP growth in the last thirty years show that two situations have not occurred simultaneously in the Country: growth of the internal demand and commercial surplus. This is due to investment limitation, a productive structure overloaded with products with little aggregated value or the sum of these two facts? If the Country is not capable of finding ways that lead to a production
sufficient for levering the growth of intern demand and generate commercial surplus, then we will be fated to dwindle, fated to continue with a vegetative growth.
Espírito Santo is the state with the largest per capita energy consumption due to the existence of energy-intensive industries (*) – metallurgy, pelleting and paper and cellulose – however when one analyzes the per capita consumption of fuels associated with particular equipment such as domestic appliances and cars we verify that they are below the national average. Some calculations indicate that, if the almost 4 million tons of steel exported by the state were substituted by agriculture implements and domestic tools (all manual and of low technology), its GDP per capita could almost double and be equal to that of São Paulo. Studies have shown that the capital productivity has decreased considerably in the eighties due in good part to the expansion of capital- and energy-intensive sectors. One form to improve this productivity would be to have a policy for gradually reducing the export of products with little aggregated value and gradual increase of investment in sectors with a larger aggregated value such as agriculture associated with the food industry, civil construction, transport and agricultural material, electric-electronic, shoes, textile, etc.
Recent news from the Ministry of Finances, stating that sufficient resources for expansion of the Electric Sector have been approved and from ANEEL’s Director declaring that there was an investment cut are a demonstration that there is little synergy between the economic and energy areas.
Some data regarding transport can also show the need of a good interaction of this area with that of energy. The road module is responsible for about 62% of freight transport in the Country with a work of only 20 t km by liter of diesel. The railway and hydro-way modules that together are answerable for 34% of freight transport can perform a work of more than 150 t km by liter of diesel. These data indicate that a structural change favoring railway and hydro-way modules would result in less diesel consumption.
These facts show that many energy supply questions are connected with the need of a National Plan for Economic and Social Development that does not cover only one mandate such as the PPAs –Multi-annual Activity Plans – but rather longer periods that permit planning and expansion of the Electric Sector based on more solid variables and in an environment of strong interaction with the Planning, Finances, Development, Transport, etc. Ministries.
(*) The energy-intensive sectors have had and have a historical importance in the industrial development of the Country. They have always undertook to supply the internal market in a satisfactory form, even in occasions of increasing demand, inserting their products with a larger aggregated value and, furthermore, in detriment to exports. We see constantly examples of how these industries are investing in order to improve the quality and add more aggregated value to their products, which are the present demands of a very competitive market. A better income distribution would be good for everyone.
Note: the author has a 29-year experience concerning activities at the Energy Secretariat of the MME, of which 25 years in the coordination and elaboration of the National Energy Balance.
Graphic Edition/Edição Gráfica:
Tuesday, 11 November 2008.