7. ENERGY AND SOCIAL ISSUES
7.4. Energy production and job creation
7.4.2. Biodiesel production
Another proposed option for energy production combined with job creation is biodiesel.
In July 2003, the Ministry of Mines and Energy (MME) launched a biodiesel programme to gradually blend biodiesel, made from various indigenous vegetable species — mamona and palm oil, among others — with regular diesel fuel and increase its use in the transport sector. The principal objectives of the programme are environmental advantages and job creation. Among the products that can be obtained are B2, with 2% biodiesel content, B5, with 5% biodiesel content, and so on up to B100.
In December 2004, the Federal Government authorized the commercial use of B2. Using the 2002 Brazilian diesel consumption of 38 billion L as a reference, the equivalent use of B2 would require the production of 800 000 L of biodiesel, which would avoid US $160 million per year in diesel imports [7.37]. Under the biodiesel programme, biodiesel producers that buy mamona and palm oil
13 For a better understanding of PROALCOOL in Brazil, see Chapter 9.
14 In 1991, harvest workers made up 60% of the total workers in the sugar cane industry [7.33].
from small rural producers in the North and Northeast regions can apply for tax breaks.
It is estimated that in the first phase an area of 1.5 million ha can be cultivated for B2 production.
Each family producing 5 ha of mamona, with an average of 700–1200 kg/ha, can earn 2500–3500 Brazilian reals per year just selling the seeds (primary production with no additional aggregated value), which gives a range of 160–275 reals per month [7.38]. The upper value is slightly higher than the national minimum wage per month as of December 2004.
In the North region, palm oil is one of the best options for meeting biodiesel demand, with a potential of 3.2 Mt of production on 720 000 ha, sufficient for 140 000 families. The net income of a 5 ha family unit can reach six times the minimum wage. For soybeans, a well established agro-industrial sector in the country, the potential for B5 is around 1.8 billion L of oil, requiring the cultivation of an additional 3 million ha [7.39].
However, as there are environmental and economic arguments against the uncontrolled expansion of soybeans in Amazonia, biodiesel production from soybeans should be compared with the cultivation of other species that perhaps create more jobs with less impact on the environment.
If Brazil is to be successful in its biodiesel programme, appropriate plant species need to be cultivated in different regions in the coming years.
Rough estimates indicate that for a demand level of 1.85 billion L of B5 produced from mamona, dendê and soybeans, around 260 000 jobs can be created [7.40]. The figures are much higher for B20; even in this case, the cultivated area, almost 20 million ha, is some 25% of the estimated area for energy crops in the country (see Chapter 6). From the supply side, it is reasonable to point out that, considering the potential for mamona production in the Northeast region, some two million new jobs could be created.
In summary, biodiesel production presents many environmental and social benefits and can be a unique alternative for increasing the number and quality of rural jobs in Brazil.
7.5. MAIN ISSUES
This chapter is a first step towards a full quantitative description of the social dimensions of Brazil’s current energy situation in the context of sustainable development. The selected data also provide a qualitative summary picture of the social
dimension of Brazil’s energy situation as it stands today.
A general summary of the social goals discussed in this chapter is presented in Table 7.10.
Accessibility, affordability and acceptability are taken in a broader sense than described in the text, in order to include some features from each energy source. The main issues are the following:
●Social inequalities in Brazil regarding energy use are substantial and important. Energy use differences among income groups reflect typical and unacceptable Brazilian income disparity levels. There are also strong differences both among the regions of Brazil and between urban and rural areas. HDI differences occur within urban centres and between the cities and peripheries. Thus, the social differences between income groups can be greater than those between urban and rural populations. Access to modern energy services will be important for improving Brazil’s HDI, both by promoting economic activities and by providing safe water, better cooking systems and electrification.
●As demonstrated by comparing the energy and the income Gini indices, national energy inequalities are lower than income inequal-ities owing to energy cross-subsidies for lower income groups.
●Recent decades have seen improvements in energy accessibility, but much more needs to be done. Universalizing electricity services is a major Government priority, with Government established targets for distribution companies.
LPG is relatively well distributed throughout most of the country, but distribution com-panies could be stimulated to supply some remote areas still lacking modern energy services.
●There are many opportunities throughout the country for biomass energy projects to promote employment, particularly in the Northeast and North regions, where palm oil and mamona could be used for sustainable biodiesel production, resulting in positive environmental impacts.
●There is still a huge potential for hydropower expansion in Brazil. There is also some tragic history in connection with past projects. Even with the more democratic decision processes adopted in recent years, care must be taken to ensure that social demands are respected, that
TABLE 7.10. BRAZILIAN SOCIAL ISSUES RELATED TO ENERGY SOURCES Primary and
secondary energy sources
Past record Accessibility Affordability Acceptability
Sustainable
Fuelwood Main energy source in Brazil until the 1960s.
Largely available in native forests and becoming scarce in other areas. general and of consumption of wood from native forests by industrial sectors.
Replacement by LPG for cooking purposes. iron and steel industry.
Production from planted forests has increased in recent years, industry has very low labour costs. recent years in social and environmental issues but much more to be done.
Coal Small share in
the energy reserves of low quality coal in the South region.
Coal production is subsidized.
Coal is mainly consumed by coal power and cement plants. water and coal extraction for small thermal plants must be developed if coal is to have a place in the electricity sector. isolated areas for electricity generation.
Not subsidized but is taxed at lower rates; is mainly consumed in the transport sector for for low income groups. biodiesel for diesel.
Biodiesel Technology has been known for a long time. No significant production.
Plenty of options in Brazil from mamona, palm oil, soybeans and other plants.
Increasing scales can promote cost reduction. growth and job creation.
Natural gas Historically a small share in the energy grid systems in cities.
Higher prices for residential use diesel and other fuels. than gasoline and alcohol because of subsidies.
Mainly consumed by taxis, benefiting only the fraction of the population that uses this kind of transport. and cars, mainly in cities, prices for private transport.
LPG Used mostly for
cooking in the residential sector.
A good national distribution system is in place.
In 2000, prices were twice as services for the whole country, rural areas in particular. several regions in the country.
Production costs have seen strong reductions over security rights for workers.
Hydropower plants
Construction of large dams in the country has removed thousands of people from their original land over time.
Resettled people have not received fair the lowest costs per MW·h.
Large environmental and social impacts are no longer widely accepted.
Projects need to be exhaustively
Still the main power option in Brazil.
Democratic decision processes needed.
TABLE 7.10. BRAZILIAN SOCIAL ISSUES RELATED TO ENERGY SOURCES (cont.) Primary and
secondary energy sources
Past record Accessibility Affordability Acceptability
Sustainable
affected people receive fair compensation and that unjustifiable projects are halted early in the process.
●Ethanol production presents huge opportu-nities for job creation and environmental benefits, although if biomass is to play a major role in sustainable development in Brazil, Small
hydropower plants
Represents a tiny fraction of the Brazilian players to invest in the energy sector. Lower costs for regional supply due to the reduction in transmission costs.
Fewer social and environmental impacts than with large dams.
Possible problems at the Angra I plant.
Brazil has large uranium reserves from mining to uranium enrichment.
Among the power plants, it presents one of the highest costs per MW·h. waste stored at the plants.
Future role of nuclear power under discussion.
Vegetable oil power plants
Pilot plants in research can be collected from the forests by isolated communities.
Such plants can promote on oil imports;
reduction of
Electricity High and growing rates income (and low use level) access by 2008 is targeted. available for the residential
Best option for minimizing environmental impacts.
Establishing clear targets for energy efficiency improvement.
TABLE 7.10. BRAZILIAN SOCIAL ISSUES RELATED TO ENERGY SOURCES (cont.) Primary and
secondary energy sources
Past record Accessibility Affordability Acceptability
Sustainable
improving the quality of employment should be a major task. Rural workers in the sugar cane sector should receive the same kinds of social rights received by urban workers, such as acceptable health and safety conditions, social security, salaries above specified minimum levels, vacations and profit bonuses.
●Coal mining and power generation in the South region have created conflicts between social demands for jobs and pollution problems. Unless these environmental liabilities are solved, the coal industry’s future is limited.
●Incentives should be given for electricity generation in isolated systems to help it gain in scale, particularly for some energy options like PVs and vegetable oils. There are some insti-tutional, technical and economic barriers to the development of these options. Finally, emerging technologies still have to find a place on the basis of their future costs resulting from technological advances and organizational learning.
AKNOWLEDGEMENT
Financial support for this chapter was also provided by CNPq-MCT, Brazil, for Claude Cohen and Roberto Schaeffer.
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Chapter 8
ENERGY SECURITY
J.R. MOREIRA, R. ESPARTA
8.1. INTRODUCTION
Energy security aims at minimizing economic and other risks associated with different energy supply options. It has been variably defined to imply:
●A reliable, affordable and environmentally sound energy system [8.1];
●The continuous availability of energy in varied forms, in sufficient quantities and at rea-sonable prices [8.2];
●Security of energy supply, competitiveness and protection of the environment [8.3].
The risks that might compromise or threaten the reliable distribution of energy services include supply constraints, transport or transmission constraints, cost and financial limitations, natural disasters, poor planning and logistics, poor management or maintenance, market shifts, techno-logical changes, acts of nature, sabotage or interna-tional market fluctuations.
Brazil’s energy markets have experienced many of these risks. This chapter begins by highlighting some general points about the dimensions of energy security and then describes some of the more salient energy system security problems in Brazil’s recent history. It next explores present and continuing systemic vulnerabilities and finally reviews policies being considered to mitigate some of these risks.
8.1.1. General considerations and dimensions of security
The traditional approach to energy security has been to diversify energy supplies — both internally, by maximizing the use of domestic resources, preferably based on domestic technol-ogies, and externally, by selecting a variety of products from a diversity of supplies from different geographical regions. However, there is no uni-versal consensus on the level of energy import
dependence considered acceptable or sustainable, and this level varies from country to country.
Although predominantly viewed as a supply issue, an important measure to enhance energy security may well be using less energy to accomplish the same tasks or supply the same energy services
— in short, using energy more effectively and efficiently. The European Commission, in a 2000 Green Paper on energy security, stated that “only a policy that is also geared to control demand can lay the foundation for sound energy supply security policy” [8.4]. In addition, security encompasses the notions of vulnerability and reliability, that is, the idea of deriving more energy services from options that are inherently less vulnerable, being more diverse, dispersed or renewable.
An analysis of energy security requires a thorough systems approach, examining the com-plete chains from primary energy sources to the provision of energy services to the final consumer.
Existing energy systems are inherently vulnerable, especially given their centralization and complexity.
Energy security also encompasses different timescales, ranging from the immediate — a power station breakdown causing a nationwide blackout
— to the very long term — the risk that world oil production will peak within the next 10 years (a pessimistic and narrow scenario of oil occurrences [8.5]) or 40 years (an optimistic and broader oil occurrence scenario [8.6]), and extreme oil market price volatility. Then there is the risk of climate change, which may force the premature retirement of previous investments. A low carbon economy could also have long term security benefits compared with the current fossil fuel dependent system. Such an economy would be associated with a combination of end use technologies with high energy efficiencies (thus using fewer MJ per unit of service), the use of resources that are either renewable (and often local) or plentiful and the use of nuclear power.
But a low carbon economy does not protect against all risks. While energy efficiency and the use of renewable energy and nuclear power hedge