|No 59 Em Português|
Text for Discussion:
Comparison of Regarding Electric Energy Demand Projections in Brazil
Carlos Feu Alvim email@example.com
Frida Eidelman, Olga Mafra e
Omar Campos Ferreira
1 - Introduction
The objective of this article is to compare projection of electric energy presented by EPE in the “Strategy for Expanding Supply”, Results of the “Brazilian Electric Agenda” study published under the auspices of the WWF (Worldwide Fund for Nature) - Brazil are commented as well.
A summary of the methodology used here is also presented and it is pointed out that it already contains in its projection mechanisms some hypothesis regarding energy conservation.
2 - Methodology of e&e
The methodology used by e&e for projecting energy is analogous to the one that has successfully been used to forecast Brazilian growth in the last ten years. Its generic characteristics are the following:
1 – Study of the variables that present a stable and predictable behavior in the historical period with available data and establishment of the best adjustment to describe the future through curves that generally lead to stabilization in its maximum value;
2 – Use of data from the more developed countries and of the Brazilian potential in order to choose the reference or saturation values, whenever the case;
3 – Search of the best fit for the historical data of the country with the considered reference value.
It should be noted that the plain and simple application of the best fit in (1) would generate deterministic values. The objective of the methodology and of the associated computer programs is, on the contrary, to make it possible a consensus regarding the most probable scenario but without the rigidity of pre-established relations.
.3 - Energy Projections
The GDP used in the projections is obtained by applying a semi-empirical macroeconomic model projetar_e that has been successfully used for more than a decade.
Then the GDP is correlated with the demand in equivalent energy.The energy projection is based on the equivalent energy/product ratio (EEq/GDP) that presents a predictable behavior in the thirty five years for which data regarding the Energy Balance and the National Accounts are available. As can be observed in Figure 3.1, the EEq/GDP ratio has been slowly growing along the years but presents a saturation trend along time.
The best fit of the past data leads to 0.513 kep/US$2003 for 2030, the adopted value leads to 0.491kep/US$ 2003 (4.3% lower). It should be observed that the program limits the freedom degree of the fitting when it compares the projection with the historical behavior and when it suggests limits established by the experience of other countries. As a result, the values established by the consensus groups do not diverge from the historical trend.
Another inconvenience of using the best fit only is that circumstances (like the occurrence of the blackout) can alter the short (and sometimes, medium) term trend, changing the best fit when new years are introduced in the series. In the case shown in what follows (Figure 4.1), it can be observed that after a transient the behavior of the curve almost returned to the previous one but some gains of the economy forced by the crisis were apparently maintained.
Figure 3.1: Illustration of the demand projection methodology in equivalent energy as a function of the GDP (US$ of 2003) with the hypothesis of better fit or fixing limits from less energy-intensive countries (countries from Western Europe and Japan)
4 - Electric Energy projections
Then the program projects the share of electrical energy in the total energy (expressed in equivalent energy).The result is shown in Figure 4.1.
Figure 4.1: Projection of electric energy share in equivalent energy.
In previous studies, data from the crisis period were ignored and the best fit was attained with a future maximum share of 35%., A limit of 34% is attained when the last years are incorporated . Consequently the values shown here for consumption projection are slightly lower than those previously shown.
A complementary form of checking the coherence of the projections is examining the energy intensity per GDP unit as a function of the GDP per capita expressed in purchase power parity (PPP). The American EIA/DOE (Energy Information Administration) has a portal that supplies energy intensity data concerning primary and electric energy consumption for practically all countries or other type of geographical unit. Figures 4.2a, 4.2b and 4.2c that follow present for almost all countries the values of the electric energy / inhabitant ratio relative to the GDP (PPP) / inhabitant for 1980, 1990 and 2004.
(Figure 4.2 continues on next page)
The correlation between the values of the two ratios for about 200 countries (198 in 2004) is rather good. It should be also noted that the straight line adjusted for 1990 is very close to that corresponding to 2004. The values for Brazil were highlighted in the graphics and it can be seen that for 1990 and 2004 the Brazilian values are close to the fitting curve.
When the set is limited to countries with more than 10 million inhabitants, the fitting is better as can be observed in Figure 4.3. The fitting straight line maintains practically the same inclination.
It should be pointed out that for each country the curve energy / inhabitant and GDP / inhabitant is only a representation (in different scale) of the energy X GDP curve. However, when different countries are represented one has the advantage of comparing data taking into account the economic growth level of each country.
Figure 4.3: Electric Energy /GDP for countries with population higher than 10 million inhabitants with the indication of some countries.
Figure 4.4 shows the same type of presentation considering the world regions; values for Brazil and the World are also indicated.
Figure 4.4 Electric Energy/GDP for some world regions compared with that of Brazil. It should be noted that regarding both GDP/inhabitants Note-and energy consumption Brazil is below the world average.
The energy/inhabitant ratio behavior, as far as the GDP/inhabitants also varies, can be seen for a country or set of countries. As Figures 4.2a, 4.2b and 4.2chave shown, the behavior for a set of countries has not varied much in the examined years, notably between 1990 and 2004. The dynamic behavior of the two variables intensity studied (electricity per GDP and per inhabitant) can be put in a graphic. The projected data are also shown. The extrapolated values would continue to be below the world trend in 2004 (that coincides with that of 1990). In Figure 4.5 are presented the two scales (GDP real in US$ of 2000)and in purchase power price . The correspondence of the two scales is not exact, but the approximation between the values read in the upper scale and the observed ones is rather good.
Figure 4.5: Evolution of the electric energy/inhabitants ratio and GDP/inhabitants of the e&e projections. The values corresponding to real values of the GDP given in US$ 2000 are just good approximations.
The good adjustment in Figures 4.2 to 4.4 using a straight line for countries with very different incomes makes it possible that the electric energy intensity regarding GDP generation will not be very dependent on the income. However, the negative value of the linear coefficient in all adjustments indicates that for very low income levels (where electric energy is not even available) it should be expected that the electric energy / GDP ratio will grow with time in countries that now have a very low income.
This can be observed in Figure 4.6 that shows for 2004 the electric energy intensity for different countries in increasing order or per capita income. The graphic was made using data from the set available in the EIA/DOE portal. It is also compared the electric energy consumption / GDP ratio in purchase power price in Brazil with the corresponding values of this ratio for different world regions (Figure 4.7).
Figure 4.6: The intensity behavior for different countries shows that for countries with low income the intensity in electric energy use is lower (corresponding to the zone close to the origin in Figures 4.2 to 4.4); however from Brazil’s income level on the energy intensity depends on the social and economic characteristics of the country and of its energy options.
Figure 4.7: Electric intensity behavior for world regions (2004 data) shows that electric energy intensity in Brazil is close to that of Europe .
In the region grouping, besides the behavior already observed for the countries, some interesting characteristics become evident: the Far East countries present a high energy intensity (whose cause was not identified), Eurasia, where countries from the former Soviet Union are predominant, presents a high energy intensity that can be due to the economical inefficiency of the previous regime. However, it should be remembered that the economical openness has brought to those countries a sharp drop of the denominator (GDP) with the consequent increase of the represented ratio. It is well known that production decrease does not lead to a corresponding reduction of energy consumption due to the resulting inefficiencies of the low use rate and the consumption enertia itself. Europe is a rich region but has an electric energy coefficient/GDP much lower than that of North America and lower than the world average. The intensity of electric energy use in Brazil is almost at the European level.
For projecting the electric consumption in Brazil it is important to know the behavior of this parameter along time, mainly in developed countries. In effect, Figures 4.6 and 4.7 shown the intensities of electricity use for different development levels but for only one year.
In Brazil the electric energy growth has exceeded that of the GDP as shown in Figure 4.8 (increase of the electricity consumption / GDP). This figure is one of those that have the purpose of orienting the choice of projection parameters in the program used in the present study. The projection options suggest (by comparison with other countries) a trend to saturation of this growth as indicated in the figure below.
Figure 4.8: Evolution of electric intensity per product and per inhabitant and the considered extrapolations.
It should be observed that the projections assume saturation of energy per GDP unit; however the energy/inhabitant intensity would be far from saturation. This behavior (unexpected in some way) is coherent as shown in Figure 4.3 where it is not observed the exhaustion of electricity consumption per inhabitant worldwide.
In Figure 4.9, also using the EIA/DOE data set, it is shown the evolution of the electric intensity in the economy for different world regions.
Figure 4.9: Electric Energy/ GDP ratio of different regions and of Brazil that is practically constant along the period considered for the world (descending slightly)
Figure 4.9 shows a certain convergence of the different regions: North America and Eurasia have been reducing their electric intensity while South and Central America (including Brazil) have increased this intensity and the Middle East has exceeded the world average. Africa, Asia and Oceania have maintained their intensities and Europe has slightly decreased its value following the world average. The actual behavior reinforces the hypothesis that energy intensity tends to be approximately constant along time in the next years.
5 - Comparison with EPE and WWF Projections
It is interesting to notice that the reference scenarios of EPE and e&e are very similar, but not identical, as ca be observed in Figure 5.1. In particular, the growth of the first years (resulting from the 2015 Plan) is higher, in the case of EPE, than the 2015 to 2020 period. The values of e&e are practically identical to those of EPE for the year 2000and higher from this year on.
Figure 5.1: Comparison between the reference economical
The base hypothesis and the methodology of the two evaluations are rather similar. Therefore, the present study is a consistent test for the EPE projections and to quickly consider other hypothesis. Projections in the 2030 Plan explicitly consider a conservation share that has been regarded as viable by the staff that made the study.
The GDP values for the reference scenarios of the two studies have already been graphically shown and are summarized in Table 5.1. The results of electric energy demand are also similar can be seen in Figure 5.2. The difference observed is fundamentally due to the conservation hypothesis recently added to the EPE study and to the different evolution of the GDP. It should also be noted that the corresponding value of that study does not include the energy sector consumption that in 2005 was 6% of the total one.
Figure 5.2: Results of electric energy demand (final consumption level) of the EPE and e&e basic scenarios projections.
In the present study, conservation is taken into account when in the future projections it is considered as paradigm developed countries where there is a strong concern regarding energy conservation (Western Europe and Japan).Therefore, conservation was implicitly considered both in total energy and in electricity, no other adjustments being necessary.
The referred study, sponsored by WWF, that had the participation of several respected entities connected with energy conservation or alternative energies presents results that are rather discrepant regarding the other two studies and it has caused some debate between the authors of EPE and the WWF study.
The behavior of the electric energy consumption/GDP value (given in PPP) as a function of the GDP/inhabitant ratio is shown in Figure 5.3 for the e&e, EPE and WWF projections..
Figure 5.3: Electric energy/inhabitant projections compared with the world trend.
It should be pointed out that the projection horizons are different: in the present study it is 2035, that of EPE, 2030 and that of WWW, 2020.The e&e projection is lower than the present world value and it gradually deviates from it, that of EPE differs a little from this value while that of WWF diverges completely from it by assuming that an important increase of the GDP/inhabitant ratio will be practically attained and the electricity consumption per capita will be maintained.
It is also interesting to compare the behavior of the electric energy/product variable for the referred studies as shown in Figure 5.4..
Figure 5.4: Electric energy/GDP consumption in the three considered studies
The comparison shows that the EPE projection fundamentally maintains the electric energy/GDP ratio observed in the last years while that of e&e admits a continuation of the trend, namely a moderate increase of electric energy use tending to saturation after 2035. In 2020 the WWF value is 14% lower than the value observed during the 2001 blackout.
The result shown in Figure 5.5 is due to a limit of 33% of electricity participation. Regarding the WWF results it is difficult to reproduce them in the program because it takes into account the system’s inertia.
Table 5.1 compares the projection values of the GDP and electric energy consumption considering the intensity of electricity use corresponding to 33% share of electric energy in the total equivalent energy (revised values) and the previous ones. It should be noted that the intermediate values were not supplied by EPE so they were deduced from the graphics and growth rate (once the 2000 and 2030 extreme are given). For the WWF study the 2020 value of electricity consumption was used and the intermediate values for the graphics were interpolated. The electricity growth rate of WWF would be 1.7% p.a. for a GDP growth (the same of EPE) of 3.8% p.a.
Figure 5.5: Simulation of electric energy consumption of EPE using the e&e program and that of WWF by changing the parameter of future electric energy participation in the total consumption. This approximation produced the revised values of Table 5.1
Table 5.1: Comparison of e&e, EPE and WWF results (originals and revised)
e&e1 – Original Values; e&er Revised Values
6 - Conclusion
The e&e and EPE projections are in agreement within the incertitude in this kind of study but they are quite different from the WWF study. The e&e alternative hypothesis shown in Table 5.1 has practically the same premises as those of EPE but are slightly different in what concerns the economic scenario.
Reduction of electric energy waste and the change in the Brazilian industrial and agricultural profile, excessively focused on exports of basic and intermediary products, is desirable from all points of view. The inertia observed in the behavior of energy consumption/product parameters in other countries indicates that sudden changes regarding this ratio are unlikely. Furthermore, Brazil is far from being a modern country, accessibility to electricity is limited and in some places inexistent. It should also be considered that, due to the scarcity of fossil fuels, the use of electric energy in many activities such as, for example, transport of load and passengers would be intensified.
The study sponsored by WWF presents conclusions that are coherent with the objectives of the associated institution and represents an important contribution to the assessment of the existent energy economy potential. However, the speed of changes suggested seems to be very unlikely in the studied horizon. It is enough to remember that it is assumed the reduction of the intensity of electric energy use by coefficients close to that of Europe (0,27 kWh/US$) and of Africa (0,20 kWh/US$) in the next fifteen years and that the GDP will grow about 4% p.a.
If electricity supply will be planned as a function of energy economies that are difficult or of long-duration, the result can be a serious setback to the growth capacity of the country.
Furthermore, as opposed to previous forecasts, the growth rate considered in the EPE studies (and of e&e) is much lower than the that desired by the Government and it seems that in present planning there is no safety margin to reduced the installed power without risk of electricity shortage in the next years.
 Form of expressing energy considering the relative efficiency of the several energy sources in each sector of the economy
 The share of electricity in equivalent energy is much higher than when it is expressed in final energy, since its higher efficiency is taken into account.
 Real values of the GDP expressed by the 2003 exchange rate.
 It should be also observed that we mean final consumption and not gross demand that includes losses.
 The GDP values in PPP from 1980 to 2004, for which the purchase power parity evaluation is available, has practically the same relative behavior of the annual GDP values in real terms. This permits to extend the purchase power parity for the 1970 - 1979 period and for the projection in the subsequent years.
 The disparity among exchange rates relative to purchase power prices is a reality that persists in many countries, in spite of the large economical openness of the last times. However it is hoped that this difference will vanish if the economical internationalization process is not reversed.. Anyway, it is the real GDP that should be observed.
 Electricity energy essentially the form of energy adequate to urban agglomerations since the local pollution is almost zero. Piped natural gas (also an urban fuel) has emerged in the last decades as a competitor to electricity in some of its local applications, or associated to it in cogeneration. In the future, with the expected exhaustion of petroleum and of natural gas itself, electricity is the natural vector of nuclear, eolic, geothermal and biomass energies as well as an eventual resuming of mineral coal. This can open new spaces for the expansion of electric energy use .
 The coincidence is due to the similar premises; regarding the e&e scenario which is fundamentally the previous study published in our e&e No 49 and precedes that of EPE.
 The EPE electricity values correspond to consumption without the energy sector and they would be about 6% higher than those of the table (final consumption of 1110 TWh in 2030).
Graphic Edition/Edição Gráfica:
Thursday, 26 April 2012.