SAO PAULO, (Reuters Point Carbon) – Brazil has long boasted about having one of the world’s cleanest energy grids due to its heavy use of hydro power, but a recent threat to its water supply is sending the country to the brink of energy rationing, raising concerns that Brazil will turn to more carbon-intensive energy sources to fuel its growing thirst for energy.
Below-normal rains since November have depleted reservoirs at hydroelectric facilities to critical levels while consumption hits its seasonal peak.
The current situation has brought back memories of Brazil’s 2001 energy crisis, when factories and residences were forced to slash consumption amid country-wide blackouts.
But more than a decade later Brazil’s situation has become more complex, with energy consumption over 40 percent higher and Brasilia under pressure to sustain its fast, but low-carbon economic growth.
Energy use jumped 40 percent during the eight years of President Luiz Inacio Lula da Silva’s government due to more inclusive social policies that lifted 30 million people out of poverty. Brazil’s energy demand is expected to grow another 50 percent by 2020.
New air conditioning equipment, for example, can easily be seen today at Rio slums, as people take advantage of easier credit lines to cool off the harsh summers.
Brazil has a voluntary target to reduce greenhouse gas emissions by at least 36 percent by 2020. With almost 70 percent of its electricity coming from hydro generation, the country has pledged to keep its energy matrix as clean as possible, but that is increasingly looking like a difficult task.
Current President Dilma Rousseff introduced new mechanisms to Brazil’s electric sector when she served as energy minister during Lula’s first term, seeking to avoid a repetition of the 2001 crisis.
A system of auctions for future delivery of electricity was introduced, as well as a network of emergency thermoelectric plants.