In dire need of more power

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Brazil depends on hydro sources for over 90% of its power and low rainfall has seen water levels fall to less than 20% of normal. Coupled with growing demand and a lack of investment in its power infrastructure from the mid 1980s onwards, the country has been unable to meet demand. Power cuts have not happened yet, but all eyes are nervously on demand reduction schemes and the weather forecasts.

Two things were supposed to avert the power crisis: rain and a thermal electric priority expansion plan. The rains are not even on the horizon and the thermal plan is delayed. As a result, the government and its agencies, namely development bank BNDES, oil company Petrobras, electricity holding Eletrobras, the mines & energy ministry and electricity regulator Aneel, have spent much of this year doing what they can to increase supply and reduce demand.

According to mines and energy minister Jose Jorge, Brazil will have 19,670 MW additional power by the end of 2003, mainly through thermal and hydro development as well as increased interconnection, but also through alternative technologies such as wind and cogeneration. To meet these aims, Petrobras will establish power subsidiary Petrobras Energia by the end of the year. BNDES, too, will create a power division, and Eletrobras has pledged to sign power purchase agreements for small scale hydro and cogeneration. Furthermore, power plant plans will be fast-tracked through the administrative system.

The power shortage will last to at least 2003, increasing prices. Government thirst for new generation has seldom been higher and the new regulations it offers renewables are more than has been on offer in the past. There is also a range of national and international financing packages on the table.

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