Economy & Energy
No 39: August-September 2003 
ISSN 1518-2932

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Economical Forecasting

Brazil – Energy in 2002 Main Indexes

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BRAZIL – ENERGY IN 2002

MAIN INDEXES

June 2003

I –SECTORIAL APPROACH

ELECTRIC ENERGY

            Public and auto-producers generation in Brazil reached 344.6 TWh in 2002, a result 4.9% higher than that of 2001. These results include 278.7 TWh (+6.1%) from public hydraulic generation, 36.7 TWh (-5.2%) from public thermal generation and 29.3 TWh (+7,9%) from auto-producers.

     The import of 36.6 TWh added to the internal generation resulted in 381.2 TWh total energy supply, an amount 4.1% higher than that of 2001.

     Nuclear generation, that in 2001 had a large increase due to the full power of Angra II when it grew from 6.1 TWh to 14.3 TWh, decreased slightly in 2002, namely 13.8 TWh (-3.1%).

     In what concerns natural gas, it grew in the public and auto-producers generation. In the public generation it grew from 6.9 to 9.7 TWh (+41%) that represents 26% of thermal generation and 3.1% of the total public generation.

     The 7.9% increase of auto-producers generation concentrated on the steel, aluminum and sugar-alcohol sectors.
     The structure of electric energy supply in 2002 can be seen in the graphic below. When compared to the world structure it is noticeable that hydro-electricity in Brazil has a significant high weight.

Structure of Electricity Supply in Brazil
 

Structure of World Energy Supply   
 

(i) includes auto-producers
(ii) includes Paraguayan share

The final electricity consumption reached 321.6 TWh in 2002, an amount 3.4% higher than that of 2000 but still smaller than that of 2000 (-3%). In this context the 72.7 TWh residential consumption maintained a negative performance (-1.4%), the 45.8 TWh commercial consumption reversed the previous drop and grew 2.4% and the 148.6 TWh consumption of the industrial sector was the one that presented the largest recovery since it grew 6.6%.

The negative performance of the residential consumption for two consecutive years has in some way frustrated the expectations of the sector’s agents that expected a recovery after the 2001 rationing. However, the average adjustment of the worker’s salary, the increase of the residential electricity average tariff (16.3%, a rate higher than the IBGE Consumer Price Index -14.74%), the high interest rates and the economical retraction has restrained the access to durable consumer goods by the population, not to mention the conservation habits absorbed during the crisis.

In 2002, 6.2 GW has been added to the installed capacity in Brazil that reached 82.5 GW of which 76.8 are from the public service and 5.65 from the auto-producers. The main power plants that started operation are: UHE Machadinho RS – units 1, 2 and 3 (1140 MW), UTE Macaé Merchant RJ (900 MW), UHE Lajeado TO, units 3, 4 and 5 (542 MW), UTE Araucária PR (484 MW), UHE Cana Brava – GO (472 MW), UHE Porto Primavera – units 12 and 13 (220 MW) and UTE Termoceará – CE (200 MW).

            In 2002, electric energy maintained its participation of 13,6% in the Brazilian Energy Matrix.

PETROLEUM AND ITS PRODUCTS

     The petroleum and LNG (liquefied natural gas) production in 2002 was 1499 mill bbl/d (barrels per day) an amount 12.2 % higher than that of 2001. The petroleum products production, 1763 mil boe/d (includes refinery gas and FCC coke), decreased 2% and consumption also decreased 2.6%. With these results, external dependency on these products was significantly attenuated from 22.9% in 2001 to 10.0% in 2002 (data base in toe). Net petroleum imports added up to147 mill bbl/d in 2002 as compared to 320 in 2001 – a 54.1% reduction – and net imports added up to 53 mil bbl/d in 2002 as compared to 104 in 2001 – a 48.8% reduction.

 The production and consumption balance of petroleum products shows also deficits of diesel (14% of the demand), of LPG (26% of the demand) and of naphtha (27% of the demand) and surpluses of fuel oil (44% of the supply) and gasoline (17% of the supply).

            The largest use of diesel oil occurs in road transport (75%) followed by the agriculture and husbandry sector (16%) and electric energy generation (5%). In the road transport diesel has grown 2.5 % in 2002 while it grew 7% in agriculture.

The car gasoline still had in 2002 a negative growth rate (-4.4%) while in 2001 this rate was (-2.6%) and (-0,6%) in 2000.

Fuel oil continued to be substituted by petroleum green coke and by natural gas. In 2002 the decrease of industrial consumption was maintained (-14.2%).

The average price increase of residential LPG above 30% and in some states above 50% and the comments above concerning residential electric energy are the determining facts of the significant consumption decrease of this energy source for food cooking (-3.5%).

The demand structure of petroleum products in 2002 is shown in the following graphic.

The 9813 million barrels petroleum proved reserves are equivalent to about 18 years of the present production what guarantees a comfortable situation for the country. For the OECD countries the reserves are equivalent to 11.5 years of production while the world average is 40.3 years.

Petroleum and its products have a 43.1% participation in the Energy Matrix.

NATURAL GAS

            Natural gas production was 42.7 million m3/d in 2002, an amount 10.8% higher than that of 2001. Imports from Bolivia added up to 14.4 million m3/d, growing 14.4% relative to 2001.

            In 2002, the main use of natural gas was in the industrial segment - 17,6 million m3/d and 25,3% growth. It is followed by Petrobrás’ industrial activities - 6.7 million m3/d 1.3% growth.

It should be emphasized the 39.9% growth of natural gas consumption for public electric generation (5.9 million m3/d) and the large growth in car transport, about 71.5%, corresponding to a consumption of 2.7 million m3/d. In a smaller volume, the 7.9% growth of auto-producers (2.3 million m3/d) should also be noticed.

The structure of all natural gas uses in 2002 is shown in the following graphic.

            (i) Industrial (+) consumption in refineries and in petroleum exploration and production

The proved natural gas reserves - 236,6 billion m3, are equivalent to 15.2 years of the present production. For the OECD countries reserves are equivalent to 13.7 years of production, while the world average is 61.9 years.

            Natural gas has already a participation of 7.5% in the Brazilian Energy Matrix.

SUGARCANE PRODUCTS

            Alcohol production in 2002, namely 216,9 mill bbl/d, represented an increase of 9.8% relative to 2001, repeating the good performance of 7.2% in 2001 relative to 2000. Alcohol total consumption reverted the negative performance of the previous year, increasing 3.2% (206 mill bbl/d) in 2002 explained by the low hydrated alcohol price relative to gasoline and by the percent increase of anhydrous alcohol participation in the C gasoline. After large alcohol stock reduction in 1999 and 2000, 2001 and 2002 practically maintained a balance between supply and demand.

            Sugarcane bagasse consumption grew 11.8% reaching 87.2 million t resulting from the growth of alcohol production, specially the 14.6% growth of sugar production.

            About 75% of alcohol produced comes from sugarcane juice (yield close to 84l/t of sugarcane). The remaining 25% comes from sugar production (yield close to 330l/t of molasses).

            In 2002 total bagasse production was close to 94.4 million t, generating 7.2 million t of waste for non-energy uses.

            The energy products from sugarcane represent 12.8% of the Brazilian Energy Matrix.

MINERAL COAL

            The use of mineral coal in Brazil is divided in two types: national steam coal (energy use) of which 90% is used for electric generation and imported metallurgical coal, characterized by expansion when there is partial combustion, producing coke specially used in the steel industry.

            In this context the numbers presented in the following table represent both the performances of mineral coal electric generation and steel industry use (10.8% increase of steel production) in 2002

            Mineral coal represents 6.6% of the Brazilian Energy Matrix.

            The structure of mineral coal uses, calculated using data converted to toe, is shown in the following graphic.

Notes: (i) percent calculated in toe and (ii) other uses represent the energy

equivalent to coke plant gas and tar production and losses in the coke plants.

FIREWOOD

            The numbers of the following table show that firewood use in Brazil is still significant mainly in the charcoal plants for producing charcoal and for cooking food in residences.

The residential sector consumed about 25 million t of firewood in 2002, equivalent to 33% of production and 11.9% higher than 2001. This increase complements the low performance of the residential consumption of LPG. In the production of charcoal about 29 million t (about 38% of production) were consumed. The remaining 29% represent consumption in agriculture and husbandry and in industry.     

            In 2002, charcoal consumption grew 4.5% and the main use was for pig iron production.

            Firewood and charcoal represent 11.9% of the Brazilian Energy Matrix.

(i)                   Includes consumption in electry energy generation and commercial consumption

II –2002 ENERGY MATRIX

NOTES ON METHODOLOGY

            Total Primary Energy Supply - TPES represents the energy available to be transformed (refineries, charcoal plants, etc.) distributed and consumed in the productive processes of the country. Except for statistical adjustments, the sum of final consumption in the economical sectors, losses in distribution and storage and losses in the transformation processes is equal to the TPES.

            The accounting of the different forms of energy is carried out using conversion factors that take into account the capacity of liberating heat, in calories, of each energy source when it is totally burned (calorific value concept). According to the first principle of Thermodynamics, 1kWh=860 kcal for electricity, however it is common the use of thermal equivalent criteria that evaluate hydraulic generation as if it was produced by thermoelectric plants, incorporating the thermal losses. This criterion has the purpose of harmonizing comparisons of TPES among countries with distinct hydraulic and thermal generation structures. Therefore, for thermal power plants with 27.5% average efficiency, 1kWh=860/0.275=3132 kcal (criterion used by the Brazilian Energy Balance – BEN, until 2001) and for 38% average efficiency, 1kWh=2263 kcal (criterion used by the BP Statistical Review – this BP bulletin does not consider biomass and in the case of Brazil it does not consider electricity imports). The International Energy Agency – IEA, the World Energy Council – WEC and the United States Department of Energy – DOE use the theoretical factor 1kWh=860 kcal.

            Whenever one wants the results in toe – ton oil equivalent, the conversion factors are calculated by the ratio between the calorific value of each energy source and the calorific value of petroleum adopted as reference.

            The analysis of the present document considers 1kWh = 860 kcal, considers the lower calorific value  - LCV and the petroleum reference with LCV = 10000 kcal/kg. These criteria are those of IEA, WEC and DOE and reflect the reality of losses in transformation, do not cause distortions when analyzing the TPES and permit direct comparisons with values from other countries, published in the annual publications of the respective organizations. In the next table it can be noticed that the previous BEN criterion yields a much higher TPES value due to the 0.29 toe/MWh (3132/10800) factor used for hydraulic power and electricity. The conversion factor of the present analysis is 0.086 toe/MWh (860/10000).

Note: the Brazilian Energy Balance of 2003, base year 2002, will adopt the same criteria of the present document for all temporal series of the tables in toe and for the Annexes F.

ENERGY AND SOCIAL-ECONOMY

            Brazil had a 1.13 toe TPES per capita in 2002, much below the world average value (1,65 toe/inhab), below Argentina (1,73) and well below USA (8,11). In what concerns TPES/GDP – Gross Domestic Product, the value of 0,33 toe/mill US$(90) is higher when compared with those of Argentina (0,27), USA (0,31) and Japan (0,15). This last index shows that Japan must invest in energy half of the Brazilian investment per unit of the GDP. In the condition of exporter of steel, aluminum, ferroalloys and other products with low aggregated value, Brazil presents a productive structure that is energy-and-capital-intensive and low labor-intensive, a fact that in part explains the inequalities regarding income distribution. It should be also mentioned that these sectors are buying a good part of the Brazilian hydroelectric power plants.

Preliminary data from IBGE indicate that the GDP grew 1.52% in 2002, due to the performances of industry - 2.1% growth, of commerce – 1.41% growth and agriculture – (-) 0.1% (negative) growth.

Influenced by the energy-intensive sectors, the TPES presented a growth higher than that of the GDP reverting the situation verified in the two previous years. In 2000 it was 1% as compared to 4.36% of the GDP and in 2001, 0.8% as compared to 1.42% of the GDP.

In 2002 natural gas continued to increase its participation in the TPES, growing from 6.6% in 2001 to 7.5%, a result of its growing use in industry, in transport and electric generation. After loosing a significant share in 2001 hydraulic power, decreasing from 15.7% to 13.6%, maintained its participation in 2002.

            The reduction of electricity imports from Paraguay/Itaipu and a good performance of the petroleum sector permitted a significant reduction of the external energy dependency from 20.5% in 2001 to 13.7% in 2002.

             Brazil is following the direction of the world energy matrix where there is a larger participation of natural gas and a lower participation of hydraulic power, however it still presents a privileged situation in what concerns renewable energy sources. About 41% of the TPES in the country is renewable while the world average is 14% and in the OECD countries, 6%.

Renováveis=Renewable; Não Renováveis=Non-Renewable

     Countries with large thermal generation have between 25 and 30% of the TPES losses in transformation and distribution. In Brazil these losses are only 8% due to the large participation of the hydraulic power. This advantage added to the large use of biomass results in a low rate of CO2 emission – 1.7 t of CO2/toe due to fuel use as compared to the world average value, 2.36 t CO2/toe.

Oferta Interna de Energia = Total Primary Energy Supply

Mundo=World

ENERGY SECTORIAL CONSUMPTION AND PHYSICAL PRODUCTION

            Final energy consumption in 2002 was 177.4 million toe and it presented a growth rate of 3.0% relative to 2001, a value slightly higher than that of the TPES - 2.7%, mainly due to reduction of losses in transformation resulting from a lower participation in the energy matrix of thermal generation.

Except for individual transportation (Otto cycle) and the cement industry that presented negative performances, the other sectors had a positive performance in what regards energy consumption, specially the energy-intensive sectors, namely ferroalloys, steel, aluminum, cellulose and sugar.

The negative performances in the consumption of the Otto cycle transportation sector (– 0.9%) and the cement industry (- 4.6%) indicate that the purchasing power of the population has excessively decreased in the last years. The low performance of LPG and residential electricity and the vehicle production decrease corroborate this statement.

The energy-intensive sectors, after strong retraction in 2001, recovered production in 2002, steel (10.8%), aluminum (16.2%), ferroalloys (19.3%). The negative rates of cement and vehicle production reflect the low performance of the economy in 2002.

Graphic Edition/Edição Gráfica:
MAK
Editoração Eletrônica

Revised/Revisado:
Tuesday, 11 November 2008.