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Brazil cools on nuclear power plans; favors wind

Source: Reuters - Sun, 15 Sep 2013 11:00 GMT
Author: Reuters
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Greenpeace activists hold a demonstration against nuclear energy in front of Planalto Palace in Brasilia on March 18, 2011. The poster reads, "The energy that kills. Dilma, no Nuclear." REUTERS/Ueslei Marcelino
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By Brian Winter

RIO DE JANEIRO, Sept 15 (Reuters) - Brazil will probably scale down its plans for new nuclear plants due to safety concerns following the 2011 radiation leak in Japan and pick up some of the slack with a "revolution" in wind power, the head of the government's energy planning agency said.

Mauricio Tolmasquim, chief of the Energy Research Company, told Reuters it was "unlikely" the government would stick to its plans to build four new nuclear plants by 2030 to meet rising demand for electricity.

He declined to specify how many might be built instead.

Tolmasquim's comments, part of a broad assessment of Brazil's long-term strategic plans for electricity generation, highlighted continued global doubts regarding nuclear power more than two years after an earthquake and tsunami led to an accident at the Fukushima nuclear power plant in Japan.

"After Japan, things got put on standby," Tolmasquim said in an interview last week. "We haven't abandoned (the plans) ... but they haven't been resumed yet either. It's not a priority for us right now."

Brazil has not begun the tender process for the facilities projected to be finished by 2030. The nuclear facility currently under construction, known as Angra 3, is being built with technology from Germany's Siemens-KWU.

Brazil remains a relatively attractive venue for nuclear power, Tolmasquim said, since it is one of just a few handful of countries that possess all the natural elements needed for its production. The country already has two working nuclear plants in Rio de Janeiro, and is currently building a third, due to come online in 2018.

After robust economic growth last decade, Brazil is in the market for new sources of reliable, clean, cheap electricity. Its power grid currently relies on hydroelectric dams for about 75 percent of its needs. That has clear environmental benefits but has also left Brazil vulnerable to occasional droughts.

As recently as January, dry weather in the northeast prompted fears of an energy shortage, pushing financial markets lower and causing a major headache for President Dilma Rousseff. The last major crisis was in 2001, when electricity shortages lopped about a percentage point off of Brazil's economic growth and led millions of people to spend their nights by candlelight.

WIND POWER'S MOMENT

At present, nuclear power accounts for a little more than 1 percent of electricity generation in Brazil, about the same as wind turbines. Thermoelectric generation powered by natural gas accounts for most of the rest.

Despite a slowdown in the economy since 2011, electricity demand has continued to grow at a healthy pace as many Brazilians join the middle class and buy refrigerators, TVs and other power-consuming goods for the first time. Electricity consumption expanded 3.5 percent in 2012, compared to just 0.9 percent growth in the overall economy.

Tolmasquim, who was the top aide for Rousseff when she was Brazil's energy minister in the early 2000s and is still close to the left-leaning leader, said he sees particular potential for wind power expansion thanks to growing competition and technological advances that lowered prices.

Average wind power prices in Brazil have declined from 148 reais ($64) per megawatt-hour at the end of 2009 to 110 reais per megawatt hour this year.

"This is wind power's moment," he said. "There's been a revolution in terms of cost."

Several foreign companies are investing in Brazil's wind sector, including Italy's Enel Green Power, General Electric Co., France's Alstom SA and Spain's Gamesa Corporacion Tecnologica SA.

Wind's success is in practice crowding out ambition for an expansion in solar energy, at least for the moment, Tolmasquim said. He said wind power is currently about a quarter as expensive as solar in Brazil, although technological advances will likely change that.

"It's a question of time," Tolmasquim said. "Solar is coming, sooner or later."

Anything that can bring down electricity prices will help. Despite an abundance of sun and wind and other sources of clean energy, Brazil still has some of the world's most expensive electricity prices, mostly because of high taxes.

($1 = 2.28 reais) (Reporting by Brian Winter; Editing by Kieran Murray and Andrew Hay)

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