Debate marks the launch of Escolhas Institute energy study.

In order to qualify the debate on the viability of new renewables increase in Brazilian electric matrix, Escolhas Institute launched this Friday (October 19th) the study “What are the real costs and benefits of energy generation sources in Brazil?”, which shows that the expansion of these sources would not increase costs or affect the competitiveness of the power sector.https://escolhas.org/expansao-de-fontes-renovaveis-nao-aumentaria-custos-ou-afetaria-competitividade-do-setor-eletrico-no-brasil-diz-estudo

The research was presented at the Seminar on Safety and Sustainability of the Brazilian Electric Matrix, with debates generated from the content of the research. The event took place in the auditorium of Folha de S.Paulo newspaper.

“It’s a job that focuses on helping to think. It brings several important results, including those renewable energies, such as wind, solar and biomass, have come to stay”, says Mário Veiga, president of PSR Consultoria and responsible for presenting the main contributions of the research. The PSR team developed the methodology applied in the work.

“I do not know how many of you know the country’s energy policy goals, but if you look at the 9,478 bills, there are 18 goals. We need to use a study of this kind to understand what we really want in the country”, says Lavinia Holland, executive director of Escopo Energia.

According to the consultant, one of the main contributions of the work is to open a new research agenda in Brazil. “We have shown in the debate that the way energy is being contracted is no longer sufficient today. It may have been in the past, but not anymore”, said the executive.

The real world simulations that the model generated by the study allow to do, may help Brazilian society to discuss with more technical basis some current dilemmas of the sector, according to Elena Landau, a lawyer of Sergio Bermudes Advogados.

The decision to build the run-of-the-river hydroelectric plant was taken without such a model. No discussion of run-of-the-river attributes or reservoirs, or the start-up of thermals, was done when the decision was made. It had an idea that for sustainability, the important thing was the run-of-the-river, but nobody crossed with the other attributes”, said the specialist.

The importance of calculating the price of different sources of electricity, the main result of the recently launched study, also revealed some aspects on how subsidies work in Brazil. “The study shows something very interesting. There are renewable sources that are earning more subsidies than others. But they, regardless of the benefits, are super competitive. What makes us enter into the super important concept of the benefits leak”, says Bernard Appy, director of the Centro de Cidadania Fiscal (CCiF).

According to him, it is always necessary to know if the social cost of that benefit, that is, how much is lost from the collection or paid for benefits, compensates the gain in terms of environmental impact improvements. “What the study shows is that probably this compensation is not happening. A benefit leak is happening. That is, it is not necessary for the activity to be feasible, which means that you are giving profit margin to those who do not need it. It’s the government wasting money”, says the expert.

In the short term, the issue of tax incentives given for renewable energy is also worrying Zeina Latif, the chief economist at XP Investments. “The data help to reinforce the idea that we need to review the entire structure of renewable energy protection”, he says. According to Latif, the national power sector is not facing many supply-demand problems, mainly because the country is not growing enough.

 

Unsustainable model

From a strategic point of view, energy experts present in the debate promoted by Escolhas Institute have no doubt that changes in the Brazilian system need to occur. “The survey results show a picture of what the industry does not want to see”, said Paulo Pedrosa, former executive secretary of the Ministry of Mines and Energy. For him, the Brazilian energy model worked, but today it is exhausted. “Change is inevitable”.

For Pedrosa, there is no doubt that the country needs to change the way it does things in the energy field. According to him, on one hand, we have more planning, more government action. And, on the other hand, we choice strategic decisions spraying, represented by a greater presence of market agents. “There will be a kind of disruptive transformation”, he said.

Line of reasoning similar to the president of the Power Sector Forum Associations, Mario Menel. For him, “change is inevitable because Brazil’s energy matrix is not sustainable.” He also urged the energy community to “disagree” with the work presented by the Escolhas Institute during the event. “For it not to be static. And to improve the discussion”, said the power sector representative.

Bernardo Bezerra, technical director at PSR, suggested the idea that between the two ways mentioned by Pedrosa there may be a kind of halfway. In this way, state planning could ally itself with market decisions.

And, about the research results, he reminded. “Any number presented in the study can only be analyzed considering the whole.”

 

Check the study in our HUB.