Paulo Rebêlo
Wired News
April 2001

A few months ago, Brazilians were astonished to read about the electricity crisis in California. They couldn’t quite understand how the richest and most developed nation in the world could face that kind of basic –- almost absurd –- problem.

That feeling has changed. A Brazilian power crisis is on its way and blackouts appear imminent. It’s now an in-country issue which may affect the entire population, with blackouts possibly beginning before the end of April.

The problem is water, or rather, lack of water.

Brazil has two nuclear and 16 thermoelectric power plants. They’re operating at maximum capacity, but that accounts for less than 5 percent of the country’s needs.

The rest of the country’s energy comes from hydroelectric plants — four main plants and numerous smaller ones. A lack of rainfall and, as a result, drying up of rivers, has caused a significant drop in production.

Last year, 95 percent of Brazil’s power came from water, according to Ilumina, a non-governmental organization in the field of electric energy consulting. Other government estimates run as low as 80 percent. But even the lower figure illustrates just how critical the lack of rainfall is to the overall energy situation.

Brazilian authorities are preparing themselves with an intensive power-rationing plan. The first initiative is to cut so-called “superfluous illumination.”

That means transferring the less-important soccer games from night to day, turning off the lights in streets where the violence rate is low, changing the illumination system at public institutions and so on.

Companies willing to ration power would receive technological and financial support in order to upgrade equipment.

The water shortage is not a recent problem. The Brazilian Society of Energy Planning said that since 1981 production has been below consumption. But last year marked a significant drop in production, and it appears worse this year (though no official numbers have been released). It’s become a serious question requiring urgent solutions.

Research done by the Association of São Paulo (state) Engineers showed the country needs to double power production in the next 14 years.

The Brazilian government said it would cost almost US$4.5 billion a year to double production. While some have called for the privatization of power, the government has resisted the idea.

However, the government has made some moves. There’s been some privatization of some power distributors -– not generators -– during the past few years. Critics say the government should figure out a way for private companies to deliver about 20 percent of the load.

Even with its modest attempts at privatization, the transition from state to private is taking too long, according to the BNDES (National Bank of Social and Economic Development).

José Jorge, the new Mines and Power Minister, said the government is developing a plan to ration energy, if and when the time comes. In addition, states throughout Brazil are preparing models for rationing the power supply.

“Rationing would be a worst-situation, but maybe it just won’t happen at all,” said Jorge, who believes that financial incentives for consumers who conserve would create a situation where the public would ration energy by themselves and avoid waste.

Others aren’t so optimistic.

“The crisis is worse than the government describes it,” said Congressman Fernando Ferro, from the Workers Party (PT).

The government is studying proposals aimed at charging higher taxes to companies and citizens who keep up with the high consumption, while giving awards to those who conserve.

Power distributors are in favor of charging different rates for higher and lower consumption, according to Manoel Negrisoli, superintendent of Aneel — the National Agency of Electric Energy.

Reports from the ONS (National Operator of the Electric System) say the main reason for the power problem is the lack of rain, since about 80 percent of the power comes from hydroelectric plants.

The richest region of Brazil (southeast), for example, is facing the worst drought of its rivers in 40 years. The ONS says that if there is not a significant amount of rain through the end of April, there will be blackouts.

“The government hasn’t been investing in the field for years, although the state power plants have money,” said Maurício Tolmasquim, president of the Brazilian Society of Energy Planning.

Tolmasquim agrees that the dependence on nature is a clear signal of the lack of planning and the continuous mistakes made during the last two decades by the government.

The Mines and Power Ministry promises not only an acceleration toward privatization of power-generation centers, but also heavy investment in the construction of new power plants.

“Privatized power plants could lead to the privatization of hydroelectric systems, rivers, the water itself,” says engineer and electric specialist João Paulo Aguiar.

“If the privatization model doesn’t get revised on that, energy dealers — in a traffic where people would have to buy power at a very higher cost — will appear.”