Energy and Development in South America

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Energy and Development in South America ( energy-and-development-south-america )

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42 | SERGIO C. TRINDADE DIVERSIFYING THE ENERGY MATRIX | 43 When visiting my paternal grandmother’s urban house in Ouro Preto, Minas Gerais, a warm bath was available only if the charcoal-fired stove was on, since the hot water pipe ran through the oven. Since Ouro Preto can be chilly in July, the oven had to be lit almost all day long to cope with warm baths for the whole family. I also remember how our fuel system arrived at the house–on a group of charcoal laden mules. A few years later, this same house had been converted to Liquefied Petroleum Gas, delivered in 13-liter containers on the back of a pickup. Today, these same areas that had such limited access to energy services—trans- portation, lighting, heating, cooling and rotary motion—are all grid-connected and served by a liquid fuels infrastructure. They are now generating a much higher GDP than in the past. It took vision, leadership, and political will to arrive at the place that we are today in Brazil. This was often achieved by using each and every energy devel- opment opportunity to absorb knowledge for future energy initiatives. In the 1950s, an assessment of hydropower resources—the so-called Canambra project—was carried out in part by Brazilian engineers.2 The knowledge and expert- ise they gained was disseminated and multiplied through education, training, and hands-on experience and coaching. This core group was behind the development of Centrais Elétricas de Minas Gerais (CEMIG), the electrical utility company of Minas Gerais, in many ways a model utility provider in Brazil. They were later responsible for the development of the Furnas power system, another model of well- run utilities in Brazil.3 Additionally, they and their disciples were critical to the imple- mentation of the Itaipu dam project and power generation system on the Brazilian- Paraguayan border, currently the largest hydropower complex in the world, though it will soon be overtaken by the Three Gorges system in China. Parallel developments took place in other parts of Brazil, resulting in a large and integrated electrical grid that today serves the majority of the population. Human capital developed to such a high degree that Brazilian companies have been engaged in electricity grid design and construction in a number of other countries. An elec- tricity research and development center—Centro de Pesquisas Elétricas (CEPEL)— was developed by the state power company Eletrobrás and has provided knowledge and services to equipment manufacturers and utilities in Brazil and elsewhere. Brazil has also progressed in the area of liquid fuels for transportation and indus- try. Five decades ago foreign geologists concluded that there was no economically recoverable oil in Brazil. Now the country is self-sufficient in oil and possesses the world’s top deep offshore oil exploration and exploitation technologies. Again, the country seized opportunities to learn and knowledge was generated via experience, research, development, and technology transfer. Petrobrás established a petroleum research and development center—Centro de Pesquisas e Desenvolvimento Leopoldo Américo Miguez de Mello (CENPES)—which played a crucial role in developing the technology that allowed the discovery of immense oil deposits off the Brazilian coast in 2007. Similarly, Brazil has become, together with the United States, a leader in the production and use of biofuels, especially ethanol. In Brazil, ethanol is made from sugarcane and is currently the cleanest commercially avail- able fuel. It has achieved the highest displacement level of gasoline of any biofuel in the world today (50 percent). Consequently, Brazilian ethanol mitigates green- house gas emissions and improves local air quality. Once again, a technology cen- ter—Centro de Tecnologia Canavieira (CTC)—was established by the private sec- tor to generate and disseminate knowledge via experience, research, development, and technology transfer that resulted in Brazil becoming the most cost-efficient bio-ethanol producer in the world. Brazilian companies are consulting for, design- ing, and building ethanol plants in Brazil and elsewhere. In Brazil, food and fuel crops are growing simultaneously, and sugar cane workers are the second best paid agricultural workers. Still, some 10–15 million Brazilians are off the grid in remote—and some not so remote—areas where the low population density does not justify extending the grid. This situation has allowed for creative solutions, such as public and private programs to provide modern energy services to settlers on land reform projects in the remote northern region of Mato Grosso. One type of arrangement, described as a Regional Market Management Organization (RMMO), served family plots of approximately 50 hectares. The RMMOs surveyed the areas and, together with the settlers 1) defined what energy services were needed to add value to local produc- tion; 2) established what local natural resources could provide energy (biomass, solar, wind, and small scale hydro); and 3) developed business plans that allowed suppliers of energy conversion equipment to see the disparate universe of potential buyers in a focused and aggregated way. The approach was fully integrated, guided by the demand for energy services and included financing schemes appropriate to the settlers’ ability to receive loans. BARRIERS TO THE AVAILABILITY AND USE OF ENERGY TO PROMOTE DEVELOPMENT Since governments play a role in development—either by creating an enabling environment for private capital to invest in energy development or by assuming such a role themselves—vision, leadership, and political will are all necessary to assign national priority to energy among the multitude of development goals a soci- ety may have.

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