A report on the Third Conference on Energy inRural Areas in Brazil

The Third Conference on En-ergy in Rural Areas in Brazil(AGRENER 2000) was held

September 12-15, 2000 at the StateUniversity of Campinas (UNI-CAMP), located in Campinas, SP,Brazil. It was organized by the Inter-disciplinary Center for Energy Plan-ning (NIPE), UNICAMP, andco-sponsored by a variety of publicand private organizations[1].

The first meeting on energy in ruralareas took place in 1986 in Itajubá,State of Minas Gerais, Brazil, and thesecond meeting took place at UNI-CAMP in 1988.

Since the second meeting, the en-ergy scenario in Brazil in general, andin the rural areas in particular, hasseen very significant changes, manyof which are also being seen in othercountries. Some examples:l The large-scale use of natural gas

has entered the Brazilian energymatrix.

l Privatization of the energy sector ishaving profound implications forall energy industries, the electricityutilities in particular. Goodexamples are the creation of newregulatory agencies like ANEELfor electricity, and ANP forpetroleum and gas.

l The creation of new ruralelectrification programs, e.g., ‘‘Luzno Campo’’ to connect remoteareas, is being implemented by theMinistry of Mines and Energy andEletrobras, the Brazilianstate-owned electricity utility.

Such changes have created manydoubts among producers, consumers,and investors about how to plan andexecute energy programs in rural ar-eas in Brazil. Many questions are be-ing asked. For example, underprivatization who will make theneeded investments in rural areas?What are the implications of new leg-islation and regulations on decision-making and future contracts? Whatare the financial implications?

In addition, interest in and aware-

ness of a more environmentally sus-tainable agriculture is increasing inBrazil. This has been particularly soafter the 1992 Rio World Environ-mental Summit.

AGRENER 2000 aimed to addresssuch questions. The conferencebrought together representatives fromthe scientific community, the privatesector, federal and state governments,and NGOs to promote broad discus-sion of the current situation in theBrazilian rural energy sector. Its aimswere to identify and discuss new al-ternatives by analyzing the differentaspects involved, to try to create afertile environment to discuss and ad-dress the implications for the provi-

sion of energy (electrification) to ru-ral areas, and more specifically, to as-sess such implications for ruraldevelopment in Brazil.

The topics discussed ranged fromconventional electrification tochanges in rural electrification andthe implications of the new Brazilianenergy policy. There is a growingconcern in Brazil for universal accessto electricity in rural areas. This con-cern is epitomized by the program‘‘Luz no Campo’’, widely discussedby ANEEL during this conference.Other aspects included the introduc-tion of new markets for biomass en-ergy (e.g., burning wood andagricultural residues), changes andimplications in the sugar and alcohol

sector; alcohol fuels, cogeneration,new technologies for decreasing en-vironmental impacts, etc. Broader is-sues were also discussed, e.g., theimpact of rapid population increase,the globalization process, and induc-tion of Brazilian society into the newworld economic order.

Approximately 300 people partici-pated in AGRENER 2000, with 120oral presentations, plus 15 conferencepapers presented by invited speakersfrom Brazil and abroad.

The main technical subjects ad-dressed at the conference were:l rural electrification;l financing and investment;l renewable energies, e.g., biomass,

hydro, solar;l non-renewable energies, e.g.,

petroleum and gas;l sustainable agriculture and

environment;l appropriate technology, new

technologies, energy conservationand efficiency;

l energy planning; andl regulation in the energy sector.Within these eight subject areas, spe-cific sessions focused on:1. utilization of biomass energy;2. refrigeration of agricultural prod-

ucts;3. evaluation of electrification in the

rural areas in Brazil;4. use of PV in isolated rural com-

munities;5. production, harvesting, and baling

of elephant grass;6. evaluation of electrification in the

state of Sao Paulo;7. use of PV in the electrification

process in Brazil;8. refrigeration and rural develop-

ment;9. energy use of elephant grass;10. environment and sustainable de-

velopment;11. energy and economic planning;12.gasification and pyrolysis of

biomass;13. technical aspects of the electricity

sector in rural areas;

Many questions are beingasked. For example, underprivatization who will makethe needed investments in ru-ral areas? What are the impli-cations of new legislation andregulations on decision-mak-ing and future contracts?What are the financial impli-cations?

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14. energy generation and use in theAmazon region;

15.production and use of vegetableoils; and

16. rural electrification.An important outcome of AGRENER2000 was the discussion promoted byANEEL (the Brazilian FederalAgency for Electricity) of how bestto provide universal access to elec-tricity in the rural sector in Brazilwithin the next 5 years. The recom-mendation was made of seeking thisambitious goal, but achieving it willbe difficult since technical and eco-nomic obstacles are likely to be en-countered along the way.

AGRENER 2000 tried to addressthis problem by setting up a specificpanel to address these issues in detail.During the debate that followed, bothofficial government and electricityutility representatives discussed vari-ous ways of how best the utilitiescould achieve such targets, consider-ing the high costs involved in remoterural areas. ANEEL’s representativesregarded this as an excellent opportu-nity for the further expansion of re-newable energies in Brazil. Apossible alternative to the highercosts involved in remote communitiescould be the creation of a compensa-tion scheme either through introduc-tion of a special tax, or by increasingthe existing tax, on fossil fuel powerplants.

AGRENER also addressed finan-cial and investment problems facingBrazil. In the early 1990s Brazilstarted a debate about the role of thestate in the economy in general, andin the energy sector in particular. Aprivatisation process began in whichenergy, and in particular the electric-ity utilities, were earmarked for spe-cial attention, given theirmonopolistic structures and perceivedlow productivity and inefficiency. Asa result the Brazilian energy industry,particularly the electricity sector, hasbeen undergoing profound transfor-mations since the mid-1990s. Thishas led to a series of regulatorychanges. For example, laws havebeen introduced to establish regula-tory bodies such as ANEEL and ANP,to enable independent power produc-ers to be established and have access

to transmission and distribution grids,choice of suppliers, access to thewholesale market, etc.

The monopoly structure of theelectric industry poses serious ques-tions with regard to the economic andfinancial viability of modernizing theindustry. However, the new energypolicy thinking is driven by the needto find answers to increasingly diffi-cult economic and financial chal-lenges, rather than the desire tomodernize the electricity industry.

There are still many uncertaintiessurrounding the privatization of theenergy sector in Brazil. Private inves-tors, particularly foreign investors,still consider Brazil a medium- tohigh-risk economy. A major concernis the risk of currency devaluation,which has led to calls by some to tieelectricity prices to the dollar, ratherthan the current situation where elec-tricity transactions are denominatedin local currency. Such pricing would

reflect dollar rather than national-cur-rency fluctuations, and would not bea true reflection of Brazilian eco-nomic realities. This might then pro-vide unwanted fuel to high inflationrates.

Another important debate wasabout the role of government in theenergy sector and Brazil’s potential tobecome an exporter of biomass en-ergy, particularly ethanol fuel. Thereare many problems, often politicalrather than technical or economical.In the particular case of Brazil, it wasagreed that a major obstacle is the

lack of a well organized domestic fuelethanol market, although PROAL-COOL (the national ethanol program)is more than 25 years old. This hasclearly been demonstrated by themany crises this program has con-fronted in its short history. This hasoften undermined consumers’ confi-dence in ethanol fuel, particularlyneat ethanol fuel vehicles. The pro-gram’s many ups and downs havebeen mostly the consequence of Bra-zil’s political and economic instabili-ties over this period.

The ethanol fuel market is expand-ing as more countries are consideringusing ethanol fuel, mostly for envi-ronmental reasons, and this repre-sents an excellent economicopportunity for Brazil. For example,the USA has a large ethanol fuel pro-gram which currently supplies about12% of the country’s fuel market; thisis a rapidly growing market for fuelethanol. Other countries or regions,e.g., the EU, have plans to increaseethanol fuel use, while Colombia,Mexico, and other countries are alsoplanning to set up ethanol fuel pro-grams. The feeling was that Brazil ismissing good commercial opportuni-ties.

Brazil needs to put its ethanol mar-ket in order. With the recent deregu-lation process, the sugar and ethanolmarkets, which are intertwined, oftenresult in conflicting interests. Thefluctuation and unbalanced supplyand demand of ethanol fuel is oftencaused by fluctuating sugar prices.For example, if sugar prices go up,sugarcane producers tend to producemore sugar and less ethanol fuel,often leading to ethanol fuel short-ages. This tendency is reversed whenthe price of sugar goes down.

Thus some kind of interventionfrom the federal government wouldbe desirable to exert some marketcontrol through regulatory mecha-nisms. This could help to create amore stable ethanol market in Brazil,creating the basis for ethanol to be-come an important export commod-ity.

The main contributions ofAGRENER 2000 could be summa-rized as follows:l promotion of serious debate on

The USA has a large ethanolfuel program which currentlysupplies about 12% of thecountry’s fuel market. Othercountries or regions, e.g., theEU, have plans to increaseethanol fuel use, while someothers are also planning toset up ethanol fuel programs.The feeling was that Brazil ismissing good commercial op-portunities.

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how best to ensure that allBrazilians, particularly in remoteareas, have access to electricity;

l promotion of public discussion ofhow regulatory agencies aredealing with rural development andthe difficulties associated with it;and

l assessment and evaluation of ruralelectrification, the state-of-the-artof renewable and non-renewableenergy technologies, energyplanning, regulatory issues, etc.

Energy supply and demand is becom-ing a heated issue in Brazil. Higheroil prices, the privatization process,the introduction of natural gas in theBrazilian energy matrix for electricityproduction, unsolved regulatory is-

sues, etc., are all issues in the debate.There seems to be an emerging con-sensus that proper energy planning isessential to sustainable social andeconomic development in Brazil.

The 4th meeting on energy in ruralareas in Brazil -- AGRENER 2002 --will be organized by the Rural Elec-trification Research Group (GEPEA),based at University of São Paulo.GEPEA is a leading academic centeron energy and rural development. Wewish them all the best of luck in theirendeavor.Luís Cortez, Interdisciplinary Centerfor Energy Studies - NIPE, State Uni-versity of Campinas -- UNICAMP, Ci-dade Universitária "Zeferino Vaz" --Barão Geraldo, CEP 13083-970 --

Campinas, SP -- Brazil, e-mail:cortez@agr.unicamp.brFrank Rosillo-Calle, Division of LifeSciences, King’s College, Universityof London, London, W8 7AH, UnitedKingdom, e-mail: frank.rosillo-calle@kcl.ac.uk

Note

1. The sponsoring organizations, which the authorsthank on behalf of the AGRENER 2000 OrganizingCommission, were the São Paulo Research Foun-dation (FAPESP), the Brazilian National Scienceand Research Council (CNPq), High Education Co-ordination (CAPES), the Brazilian Electricity Na-tional Agency (ANEEL), the Brazilian PetroleumNational Agency (ANP), the Brazilian NationalElectricity Utility (ELETROBRAS), the ElectricityCompany of Sao Paulo (CPFL), Energia Pura,SOLETROL, the São Paulo Sugar and Ethanol Pro-ducers Cooperative (COPERSUCAR), and San Ra-fael.

A report on the International Seminar onEnergy and the Sugarcane Industry held inHavana, Cuba1. IntroductionThe International Seminar on Energyand the Sugarcane Industry was heldin Havana, Cuba, during 7-9 Novem-ber 2000. It was co-sponsored by theNational Forum on Science and Tech-nology and five government minis-tries: Sugar; Science, Technology andEnvironment; Higher Education;Economy and Planning; and Basic In-dustry. Specialists, managers and re-searchers from 15 countriesparticipated in seven sessions,wherein a total of 95 oral and posterpapers were discussed. In this report,we provide a synopsis of the threesessions of the seminar that focusedon topics relating to the use ofbiomass as an energy source. The top-ics of these sessions, which ac-counted for 74 of the paperspresented at the seminar, included co-generation with sugarcane biomass asfuel, new cogeneration technologies,and financing of biomass energy pro-jects in Cuba. The four other sessionsof the seminar focused on energy ef-ficiency in the production of sugarand sugarcane by-products, alterna-

tive fuels from sugarcane, integratedenergy management and informaticsin the sugarcane industry, and train-ing of technicians for the sugar indus-try.

2. Cogeneration with sugarcanebiomass as fuel

The session on cogeneration withsugarcane biomass as fuel attractedthe greatest participation among allthe sessions, illustrating the impor-tance that the sugar industry in Cubaand elsewhere places on this subject.A total of 62 papers were presentedin this session on biomass as fuel, onsteam generation, on cogenerationand generation of electric energy, andon condensate systems. Some high-lights of the presentations are re-ported here.

The papers on biomass as fuel in-cluded one by Felix Perez (SugarMinistry, Cuba) on the realities of theuse of sugarcane crop residuals(RAC) in Cuba. RAC, representing15 to 20% (dry basis) of the weightof the millable cane stalks, is sepa-rated from cane at dry cleaning cen-

ters (DCC), of which there are 920 inCuba, serving 155 sugar mills. In thelast 7 years an average of 120,000tonnes (t) RAC per year have beenused for energy in more than 50 sugarmills. Another paper on the use ofbiomass from agricultural processingwas presented by Salvador OsorioRamírez (Spain). This paper de-scribed the characteristics of the firstinstallation in Europe burning theresidues remaining after oil extractionfrom olives.

A comprehensive paper on thetopic of steam generation frombiomass in Cuban sugar mills waspresented by Luis Pérez Garay(Cuba). The paper showed how steamgeneration in the Cuban sugar indus-try has developed over the last 40years. It presented the current struc-ture of actual boilers and discussedpossibilities for increasing the capac-ity and efficiency in those units withremaining useful life, as well as theprospective results of a nationalboiler replacement program.

On the theme of electric powergeneration a paper was presented by

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