Energy Transition in Brazil 3031210328, 9783031210327

Table of contents :
Foreword
Introduction
Contents
1 Energy Transition: Changing the Brazilian Landscape Over Time
Introduction
The Demand and Exploration of Brazilian Energy Resources
We Need Energy!
The Transformation of the Landscape: Opening Roads and Building Hydroelectric
Brazil After the Oil Crisis: Moving Away from Oil Dependence?
Final Remarks: What Does the Energy Transition from the Past Teach Us?
References
2 Knowledge Mapping: A Review of the Energy Transition Applied to Brazil
Introduction
Mapping Brazilian Energy Transition Knowledge
Brazilian Energy Transition for Whom, Where and When
Knowledge Growth of Energy Transition Applied to Brazil
An Analysis of the Research Area and Main Journals of ET
Content Producing Regions and Countries
Institutions, Funding Agencies, and Authors
Keywords Clustering
Energy Transition Knowledge Evolution in the Brazilian Scenario
Final Remarks
References
3 Geopolitical Losses and Gains from the Pathways of the Energy Transition in Brazil
Introduction
Energy Geopolitics: A Brief Overview
Energy as a Source of Power and Conflict
Oil Hegemon and Slow Decline
Energy Transition as a Soft Power Instrument
Brazil’s Role in Energy Geopolitics
Internal Scenario: The Brazilian Energy Supply Mix
Energy’s Role in Brazil’s International Relations
Brazil’s Main Geopolitical Assets and Structural Gaps
Will Brazil Gain or Lose with the Energy Transition?
Possible Scenarios for Brazil
What Will Be the Next Scenario?
Conclusion
References
4 Democracy and Energy Justice: A Look at the Brazilian Electricity Sector
Introduction
An Introduction About the Concept of Energy Democracy and Related Terms
Understanding the Concept of Energy Justice
Democracy and Electricity in Brazil
Is the Brazilian Electrical Supply Mix Sustainable?
Access and Electricity Cost in Brazil
The Power Blackout in the State of Amapá—A Case Study
Conclusion
References
5 Social Acceptance and Perceptions of Energy Transition Technologies in Brazil
Introduction
Case Studies Selection
Wind Power Case Studies in Brazil
Solar Power Case Studies in Brazil
Carbon Capture and Storage Case Studies in Brazil
Discussion and Final Remarks
References
6 Digitalization in the Brazilian Electricity Sector
Introduction
Digitalization and Energy Transition
Digitalization Technologies
Digitalization and the Energy Transition to a Low-Carbon System
Digitalization Initiatives for the Electricity Sector in Brazil
Governmental Initiatives
Research and Development Initiatives
Conclusion
References
7 Regulatory Pathways for the Decentralisation of the Brazilian Electricity System
Introduction
The Brazilian Electricity System and the Relevance of Decentralisation
Decentralised Energy Systems
Distributed Generation as a Decentralisation Vector
Distributed Generation Development in Brazil
The Future of DG in the Brazilian Electricity Grid
Conclusion
References
8 Brazilian Natural Gas as a Low-Carbon Energy Transition Resource
Introduction
Brief Remarks on Natural Gas Development in Brazil
Supply and Demand for Natural Gas in Brazil
The Future of Natural Gas in Brazil
Energy Transition in Brazil and the Role of Natural Gas
Conclusions
References
9 Possibilities for Carbon Capture, Utilization, and Storage in Brazil
Introduction
An Overview of Carbon Capture and Storage Technologies
Emissions and Possibilities for CCUS and BECCUS in Brazil
Capture
Transport
Utilization
Storage
Legal, Economic, and Political Aspects
Final Remarks
References
10 Hydrogen: A Brazilian Outlook
Introduction
Bases of Hydrogen Strategy in Brazil
Brazilian Power Sector and Perspectives of Green Hydrogen Production and Storage
Challenges and Opportunities of Power-to-Hydrogen
Potential Power-to-X Solutions Using Green Hydrogen
Conclusion
References
11 The Future of Diesel: Paths and New Alternatives to Energy Security and Sustainability
Introduction
The Diesel Oil Scenario
The Development of the Diesel Regime in Brazil
Dependence on Diesel Oil Imports
New Oil Fuels Pricing Policy and Truckers’ Strike
Biodiesel Adoption in Brazil
Biodiesel Characterization and First Adoption in Brazil
Addition of Biodiesel to Diesel
Production, Commercialization, and Distribution of Biodiesel
New Potential Fuels
Liquefied Natural Gas (LNG)
Electric and Hybrid Vehicles
Hydrogen
Green Diesel
The Potential Fuel Supply Mix
Conclusion
References
12 Trends and Prospects for Transport Fuel Consumption in Brazil
Introduction
The Fuel Consumption in Brazilian Road Transport
Vehicle Pollution Control Measures
Energy Sources for Transport
Structure of Emission and Predictive Model Calculation
Study Design
National Energy Balance—BEN
Emissions Analysis
Regression
Predictive Model
Limitations
Emissions Values for 1970–2030 and Perspectives for Energy Consumption for 2020–2030
Carbon Dioxide Equivalent Emissions from 1970 to 2019
Predict Energy Consumption and Emissions from 2020 to 2030
Paths to Zero Emission in Brazilian Road Transport
Conclusions
References
13 How Can Renewable Natural Gas Boost Sustainable Energy in Brazil?
Introduction
Literature Review
How Can Renewable Natural Gas Boost Sustainable Energy in Brazil?
Policy Implications
Conclusions
References
14 The Main Challenges of the Brazilian Energy Governance for the Mitigation and Adaptation to Climate Change
Introduction
Climate Action and Sustainable Development
International Context
Brazilian Context
Methodology
SWOT Analysis
GUT Analysis: Priority Analysis
The Strengths, Weaknesses, Opportunities, and Threats of the Brazilian Energy Planning
The Important Challenges
Final Remarks
References
15 Effect of the COVID-19 Pandemic on the Brazilian Energy Sector
Introduction
COVID-19 and the Energy Sector in Brazil
Social Distancing Data
Emission Data
Income Data
Power Sector Consumption
Reflections on the Effects of the COVID-19 Pandemic
Final Considerations
References

Citation preview

The Latin American Studies Book Series

Drielli Peyerl Stefania Relva Vinícius Da Silva   Editors

Energy Transition in Brazil

The Latin American Studies Book Series Series Editors Eustógio W. Correia Dantas, Departamento de Geografia, Centro de Ciências, Universidade Federal do Ceará, Fortaleza, Ceará, Brazil Jorge Rabassa, Laboratorio de Geomorfología y Cuaternario, CADIC-CONICET, Ushuaia, Tierra del Fuego, Argentina

The Latin American Studies Book Series promotes quality scientific research focusing on Latin American countries. The series accepts disciplinary and interdisciplinary titles related to geographical, environmental, cultural, economic, political and urban research dedicated to Latin America. The series publishes comprehensive monographs, edited volumes and textbooks refereed by a region or country expert specialized in Latin American studies. The series aims to raise the profile of Latin American studies, showcasing important works developed focusing on the region. It is aimed at researchers, students, and everyone interested in Latin American topics. Submit a proposal: Proposals for the series will be considered by the Series Advisory Board. A book proposal form can be obtained from the Publisher, Juliana Pitanguy ([email protected]).

Drielli Peyerl · Stefania Relva · Vinícius Da Silva Editors

Energy Transition in Brazil

Editors Drielli Peyerl Institute of Energy and Environment University of São Paulo São Paulo, Brazil University of Amsterdam Amsterdam, The Netherlands

Stefania Relva Energy Group of Department of Energy and Electrical Automation Engineering Polytechnic School University of São Paulo São Paulo, Brazil

Vinícius Da Silva Energy Group of Department of Energy and Electrical Automation Engineering Polytechnic School University of São Paulo São Paulo, Brazil

ISSN 2366-3421 ISSN 2366-343X (electronic) The Latin American Studies Book Series ISBN 978-3-031-21032-7 ISBN 978-3-031-21033-4 (eBook) https://doi.org/10.1007/978-3-031-21033-4 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

To all the researchers that work toward a sustainable future

Foreword

The 2021 United Nations Climate Conference held in Glasgow, Scotland, known as COP26, shed light on new global challenges to be surpassed and the urgent and irremediable need to adopt commitments that reduce greenhouse gas emissions and limit climate change. During COP26, Brazil assumed a bolder responsibility to contribute to these goals. Thus, the country intends to mitigate about 50% of its greenhouse gas by 2030. Hereupon, the present book is presented in a vital moment of discussion and learning about how the energy transition to a low-carbon future is directly connected to our past, present and future and how we can contribute to making this happen in an affordable, reliable, and sustainable way. The 15 book chapters cover a range of subjects which varies from history and geopolitics to new technologies and energy carriers such as carbon capture and storage and hydrogen and even the effects of the measures adopted as a result of the COVID-19 pandemic in the energy sector. In addition, the book is one of the first results of the Brazil Energy Transition (BET) group formed by researchers from the most diverse areas of knowledge and focuses on the 5Ds of the energy transition (Decarbonization, Decentralization, Decreasing Consumption, Democratization and Digitalization). The collaboration of international researchers in the book has demonstrated the group’s interdisciplinarity and internationalization. Finally, the book presents innovative research that Brazil can follow to achieve the goals outlined at COP26. I wish you all an enjoyable read and that it brings excellent reflections and inputs to the discussions on the energy transition pathways to a low-carbon future in the country. June 2022

Prof. Dr. Julio Romano Meneghini Director of the Researcher Centre for Greenhouse Gas Innovation University of São Paulo São Paulo, Brazil

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In January 2019, a project aimed at studying energy transition in Brazil was approved through the Young Researcher modality (Proc. 2017/18208-8), funded by São Paulo Research Foundation (FAPESP). One of the objectives of this modality is to implant new study lines. Since then, one of the main results of this project has been the formation of a research group made up of researchers who are not only interested in the topic of energy transition but also believe in a sustainable future. This group was also consolidated as a research group on Energy Transition studies in Brazil via the Scientific Division of Environmental Management, Science and Technology at the Institute of Energy and Environment of the University of São Paulo and in partnership with the Research Center for Greenhouse Gas Innovation. Today, this group called Brazil Energy Transition (BET) is made up of 25 researchers and students (15 women and 10 men) from different areas (biologists, lawyers, economists, engineers, historians, geographers, environmental managers, geologists, meteorologists, among others). This multidisciplinary has allowed the construction of a solid book on the energy transition process in Brazil. Over a year and a half of research, we editors and authors worked hard to deliver original content to readers interested in the topic that could offer the most varied and detailed information about the past, present and future of the energy transition in Brazil. The book’s objective is to present the energy transition process in Brazil over time and offer new perspectives to achieve a sustainable future. The book unfolds over 15 chapters covering historical, geopolitical, technical, and economical aspects and elements conceptually familiar to the energy transition, such as social acceptance, low-carbon technologies, digitalization, Sustainable Development Goals, and even recent topics such as the pandemic of COVID-19. The Brazilian electricity and transport sectors and climate change governance are also one of this book’s main focuses. The first three chapters provide a theoretical-conceptual basis on the past, present and future of the energy transition in Brazil, answering how the past energy transition aspects have shaped the current Brazilian energy landscape; how the theme is little explored and quoted in the Brazilian context when compared to the international scope; and what are the possible impacts for Brazil’s energy geopolitics in a scenario ix

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of successful global energy transition toward low-carbon future. Chapters 4 and 5 discuss how the concepts of energy democracy, energy justice and social acceptance are being addressed and incorporated into the Brazilian reality. Chapters 6 and 7 innovate and align with two central D’s of the energy transition by focusing on the digitalization and decentralization of the Brazilian electricity sector. Chapters 8–10 discuss if natural gas has behaved as an energy transition element in the Brazilian context; what are the possibilities for carbon capture, storage and utilization and how Brazil can become a major hydrogen economy player and driver in the world. Chapters 11 and 12 focus on the transport sector, offering new perspectives on one of the sectors that most emit greenhouse gas in Brazil. Finally, the last three chapters reflect on the paths Brazil has been taking in search of an energy transition that aims at the potential of renewable natural gas, the main challenges of Brazilian energy governance to mitigate and adapt to climate change, and what are the main lessons we can learn from the effects of the COVID-19 pandemic restrictions on the energy sector. Thus, this book is the result of the hard work of the researchers of this group, who work with a team spirit and with the same ideal of believing in free and quality education, which has changed the lives of many of them, especially in the context of difficulties characteristic of developing countries. Behind all these 15 chapters, we have the story and dream of each researcher to do quality research, believe in science and make a difference around them. The paths taken throughout this book demonstrate the particularities of Brazil and present this country in a unique and differentiated way in terms of the various approaches to the energy transition. Finally, it is a book that brings a multidisciplinary, innovative vision and information published for the first time. We wish you a pleasant reading. Drielli Peyerl Stefania Relva Vinícius Da Silva

Contents

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Energy Transition: Changing the Brazilian Landscape Over Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Drielli Peyerl, Stefania Gomes Relva, and Vinícius Oliveira da Silva Knowledge Mapping: A Review of the Energy Transition Applied to Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vinicius Oliveira da Silva, André dos Santos Alonso Pereira, Stefania Gomes Relva, and Drielli Peyerl Geopolitical Losses and Gains from the Pathways of the Energy Transition in Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . André dos Santos Alonso Pereira, Vinicius Oliveira da Silva, Edmilson Moutinho dos Santos, and Drielli Peyerl Democracy and Energy Justice: A Look at the Brazilian Electricity Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Alex Azevedo dos Santos, Rodolfo Pereira Medeiros, Milena Megrè, and Drielli Peyerl Social Acceptance and Perceptions of Energy Transition Technologies in Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Anna Luisa Abreu Netto, Pedro Roberto Jacobi, and Drielli Peyerl

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Digitalization in the Brazilian Electricity Sector . . . . . . . . . . . . . . . . . . Stefania Gomes Relva, Maria Rogieri Pelissari, Vinicius Oliveira da Silva, and Drielli Peyerl

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Regulatory Pathways for the Decentralisation of the Brazilian Electricity System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Marcella Mondragon and Drielli Peyerl

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Brazilian Natural Gas as a Low-Carbon Energy Transition Resource . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Lauron Arend, Yuri Freitas Marcondes da Silva, Stefania Gomes Relva, and Drielli Peyerl

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Possibilities for Carbon Capture, Utilization, and Storage in Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 Maria Rogieri Pelissari, Stefania Gomes Relva, and Drielli Peyerl

10 Hydrogen: A Brazilian Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 Sabrina Macedo and Drielli Peyerl 11 The Future of Diesel: Paths and New Alternatives to Energy Security and Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173 Luis Guilherme Larizzatti Zacharias, Luiza Di Beo Oliveira, Victor Harano Alves, Xavier Guichet, and Drielli Peyerl 12 Trends and Prospects for Transport Fuel Consumption in Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 Celso da Silveira Cachola, Ana Clara Antunes Costa de Andrade, Letícia Schneid Lopes, Evandro Matheus Moretto, and Drielli Peyerl 13 How Can Renewable Natural Gas Boost Sustainable Energy in Brazil? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 Saulo Vieira da Silva Filho, Mariana Oliveira Barbosa, and Drielli Peyerl 14 The Main Challenges of the Brazilian Energy Governance for the Mitigation and Adaptation to Climate Change . . . . . . . . . . . . 227 Leonardo Yoshiaki Kamigauti, Ana Luiza Fontenelle, Felipe Coutinho, Ana Maria Heuminski de Ávila, and Drielli Peyerl 15 Effect of the COVID-19 Pandemic on the Brazilian Energy Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245 Mariana Ciotta, Drielli Peyerl, and Luis Guilherme Larizzatti Zacharias

Chapter 1

Energy Transition: Changing the Brazilian Landscape Over Time Drielli Peyerl, Stefania Gomes Relva, and Vinícius Oliveira da Silva

Abstract The energy transition associated with historical context requires us to rethink the type of energy source and the methods we should use to generate energy. Throughout history, the use and choice of energy sources determined and shaped the dynamic of the cities and countries, urbanistic process, environment, landscapes, social, economic, and political factors. Understanding the historical process helps us discuss the possibilities and urgencies, such as global warming and reduction of greenhouse gas emissions, to a sustainable energy transition in a world reinventing itself at incredible speed, searching for clean and renewable energy sources. The book chapter plots a historical panorama, through literature review, from the past energy transition aspects that shaped the current Brazilian scenario, describing the main drivers and local singularities that led to the building of the current national energy mix. The book chapter brings some lessons on how (i) the appropriation of energy resources changes according to the context of the period; (ii) the design of a consistent and long-term public policy is fundamental for the development and insertion of new technologies and energy sources in the different sectors of the economy and (iii) the global economy shapes different realities. Lastly, understanding the historical context contributes directly to the present and future perspective of the energy transition going in the country presented throughout this book. Keywords Energy transition · History · Natural resources · Brazil D. Peyerl (B) Institute of Energy and Environment, University of São Paulo, Av. Professor Luciano Gualberto, n° 1289, São Paulo, Brazil e-mail: [email protected]; [email protected] University of Amsterdam, Science Park 904, 1098 Amsterdam, The Netherlands S. G. Relva · V. O. da Silva Energy Group of Department of Energy and Electrical Automation Engineering of the Polytechnic School, University of São Paulo (GEPEA/EPUSP), Av. Professor Luciano Gualberto, Travessa 3, n° 158, Prédio da Engenharia Elétrica, São Paulo, Brazil e-mail: [email protected] V. O. da Silva e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Peyerl et al. (eds.), Energy Transition in Brazil, The Latin American Studies Book Series, https://doi.org/10.1007/978-3-031-21033-4_1

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Introduction Large-scale energy transitions have occurred over the decades or even centuries (Smil 2010) mainly due to the different technology development steps and the presence of fossil fuels in all the economic aspects and lifestyles (IRENA 2017). However, understanding the technological trajectories, the regional particularities, and the availability of natural resources in the past energy transitions of each nation help us identify features that may be useful for outlook at the local and global level (Fouquet 2010; Fouquet and Pearson 2012; Markard et al. 2015). Lessons from historical experiences imply understanding these transitions’ temporal dynamics (Fouquet 2016; Sovacool 2016). Full energy transition involves multi-sectors and services and has taken much longer, whereas the fastest transitions occurred in a specific sector, local and short periods (Fouquet 2016; Sovacool 2016). Several processes can determine this time scale as technological innovation to the niche market and transformation in energy or economic systems (Fouquet and Pearson 2012; Myhrvold and Calderia 2012; Smil 2010; Sovacool 2016). In addition, past energy transitions were driven by the successful scale-up of technologies and industries (Grubler 2012). The past transition occurred at the territorial scale level, following individual, local, regional, national, and, at last, international levels, boosted by exploitation and scarcity of natural resources and technology. Currently, the drives for an energy transition from fossil fuels to a sustainable future are more related to agreements at international levels (e.g., Paris Agreement), emerging technologies (e.g., Carbon Capture and Storage), and global actions (e.g., climate change). In contrast, the gap between developed and developing countries, energy security, and natural resource availability are key factors in building and maintaining a sustainable energy transition (Chen et al. 2019; Kim 2019). Thus, the actual transition has a global scale first, then regional, national, and sectoral scales. Historically, the demand for natural resources and their uses shaped the countries’ dynamics, economies, and, posteriorly, worldwide. Thinking about it, what lessons can we draw from past energetic transitions? How have large-scale transitions impacted the energy course at the national level? How can the particularities of each country respond to the courses of an ongoing energy transition? The case study analyzed in this work is the Brazilian energy sector to answer these questions. Brazil has a particular context of the past transition energy. A country known for its diversity of biomes and natural resources has depended heavily on fossil fuel imports throughout its history, mainly in the transport sector, and bet on hydroelectric power plants in the electricity sector (Leite 2014; Magalhães 2018; Peyerl et al. 2018). The Brazilian energy sector is internationally known mainly for its renewable electricity mix, the use of alcohol in flex-fuel cars, and the oil and natural gas fields in the offshore area (Goldemberg and Lucon 2007; Moretto et al. 2012; Zhang et al. 2019). However, the Brazilian energy background was boosted mainly by the availability of natural resources and technologies. Recognizing this, the book chapter plots a historical panorama from the past energy transition aspects that shaped the

1 Energy Transition: Changing the Brazilian Landscape Over Time

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current Brazilian scenario, describing the main drivers and punctual singularities that led to the building of the current national supply energy mix.

The Demand and Exploration of Brazilian Energy Resources In Brazil, after a long period of Colonial (1500–1822), the transition to the Imperial period resulted in commercial and industrial ventures that were slow and without government interference. The country continued to depend on agricultural activities, which did not require large amounts of energy (Leite 2014). However, the First Industrial Revolution triggered coal as one of the primary sources of power in the eighteenth and nineteenth centuries. Therefore, the Imperial government investment in searching for mineral coal was predominant in the first decades of the nineteenth century but unsuccessfully. The analysis of the samples collected, mainly in the south of the country, indicated that coal was of such low quality, hampering its use as an energy source and resulting in one of the first energy challenges faced by the country (Leite 2014; Peyerl et al. 2018). The use of coal in the country as an energy source was intended for industry and steam engines (Peyerl et al. 2018). From 1840 onward, industrial diversification was a subtle movement in the country. The use of steam machines, supplied by boilers, depended on burning firewood, and in particular situations, water wheels were also used (Leite 2014). In addition, mineral coal became an indispensable energy source for the country in the period mentioned (Leite 2014; Magalhães 2018; Peyerl et al. 2018). Small foundries, construction of steam-powered ships, and equipment with boilers where coal was burned began to make up the industrial landscape in Brazil (Leite 2014). Also, gas lighting started to be produced with coal to supply the central part of Rio de Janeiro state, and the first steam locomotive began to operate in the territory in 1854 (Borges 2011; Leite 2014). In the mid-nineteenth century, the construction of railroads and growth in the use of locomotives resulted in the dependence on coal imports from England (Magalhães 2018). Nevertheless, the price of imported coal from England became very high and uncertain, primarily until World War I (1914–1918). The high cost of coal led to the search for technological alternatives such as briquette. However, the briquetting method was unsuitable and economically feasible to apply to Brazilian coal (Peyerl et al. 2018). Consequently, the Brazilian government started to import coal from the USA; however, the coal quality was lower than England’s (Lisboa 1916). Thus, the government needed to find solutions to meet the domestic supply of fossil fuels (Peyerl et al. 2018). At the end of the nineteenth century, a new source, known as petroleum or black gold, arose on the world energy scene (Peyerl et al. 2016). The Universal Exposition of Paris (1889) contributed to the development and expansion of petroleum globally by describing its uses and applications in industry (Heizer 2009). The advent of internal combustion engines and replacing old steam engines with diesel engines provided growth in the oil industry (Peyerl et al. 2019). However, the search for

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petroleum in Brazil remained secondary in the period mentioned for several reasons, such as (i) the coal as the leading domestic fuel to the transport and industry in the country (Lisboa 1916); (ii) incomplete knowledge about the geology of the territory (Peyerl et al. 2019); and (iii) dependence on specialized workforce, knowledge, and technology from other countries (Peyerl et al. 2019). The Brazilian government began to invest in building thermoelectric plants in the electricity sector. The first thermoelectric was constructed in Rio de Janeiro state in 1883 with an installed capacity of 52 kW (Ackerman 1955). Then, investments focused on the country’s hydraulic potential, building the first hydroelectric plant for public supply with a capacity of 1475 kW in Minas Gerais state in 1889 (Ackerman 1955; Paixão 2000). According to Ferrari (2006), the hydroelectric development in the country started with small exploitations. These small power plants, generating hundreds of kW, were built and operated mainly by municipalities or private companies. This initial use took place in the center-south region of Brazil, especially in the southeast region, due to the local geography, favorable to hydroelectric use and the history of greater occupation and socioeconomic development. In 1901, the installed capacity of hydraulics surpassed the total of thermoelectric plants, remaining the primary source of the electricity sector to the present day. Therefore, we can consider that the energy transition of the Brazilian electricity sector from replacing fossil fuels with renewable ones occurred at the beginning of the twentieth century, see Fig. 1.1. This transition occurred mainly due to the construction of the first large hydroelectric power plant in São Paulo state in 1901, with a power that quickly grew to 27,379 kW (Ackerman 1955).

Fig. 1.1 First landmark of the energy transition from fossil fuels to renewable sources in the Brazilian electricity sector

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It is noteworthy that, in parallel with the search for coal and oil in the territory, and investments in hydroelectric plants, firewood was the main alternative to make up for the lack of fossil fuel sources. In the first decades of the twentieth century, some Brazilian studies still endorsed the idea that coal was the solution to the Brazilian energy issue, mainly due to the opening of several railways where could traces of coal come to light and the development of new technologies (Lisboa 1916; Magalhães 2018; Pires 1916). Besides, opposite and diverse opinions occurred during this period in the political environment. On one side, several Brazilian nationalist politicians began to create stricter laws regarding exploiting natural resources found in the territory; in contrast, others affirmed that the Brazilian land was poor in fossil fuels and the investments were not economically viable (Calógeras 1905; Lisboa 1916; Pires 1916). On the other hand, the technical development resulted in a profound transformation in the international landscape, for example, in the developing of liquid fuels for the transport sector. By distilling crude oil until 1910, gasoline was obtained, which provided a low octane rating (Dias and Quaglino 1993). During this period, cracking processes began to be developed, producing gasoline with higher octane levels and a greater economy of crude oil (Dias and Quaglino 1993). This technical development expanded the world’s car fleet (Dias and Quaglino 1993). In a nutshell, Brazil adapted and built its energy supply mix according to the agricultural, economic, and demographic growth, without planning for the long term, dependent on the technology and availability of the energy resource in its territory. Initially, the lack of available fossil fuel resources was the ghost of the country’s economy but analysing the history; however, this lack boosted the development of new and own techniques and the use of other energy resources, as we will see in the next section.

We Need Energy! In Brazil, during the first two decades of the twentieth century, the government invested mainly in surveys to search for coal reserves, while foreign companies unsuccessfully invested in oil exploration (Peyerl et al. 2019). In 1922, the First Brazilian Congress of Coal and other National Fuels’ holding brought new perspectives about energy sources and their uses. Among the topics discussed at the Congress, it stands out the economic exploitation of coal, the value of bituminous shale, the use of alcohol as fuel, and the possibility of prospecting for oil in Brazil (Lopes 2019). In the same year, in a search for coal reserves, a new energy source was found in the country: natural gas (Peyerl et al. 2019). However, the lack of technology and the uses of this resource were not in line with the energy reality in Brazil (Peyerl et al. 2018). Thus, the investments in new energy resources did not focus on this resource in the period. In the electricity sector, the investment still concentrated on the hydroelectric potential; however, the energy and water crises due to the drought in the state of São

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Paulo presented a series of consequences to the sector between 1924 and 1925 (Hunt et al. 2018). The main measures adopted by the municipal government resulted in: (i) the absolute and complete suspension of trams transporting regional cargo; (ii) increased restrictions on electricity-powered public lighting; (iii) break of passenger trams from 10:00 p.m. to 5:00 a.m., as well as during the day on lines with lower passenger flows; (iv) suspension of private lighting during the day; and (v) closing of nightclubs, restaurants, and bars after 10:00 p.m. (Prefeitura de São Paulo 1925). By replacing public transport powered by animal traction and public gas lighting with electric energy, both for moving trams and electric lighting, the Brazilian government indicated the first steps in the modernization of the energy sector, considering the changes taking place abroad (Curi and Saes 2014). However, the government faced several problems related to this expansion, such as the lack of fossil resources, technology, appropriation of natural resources, economical and political issues. From 1930, the Brazilian political scenario gradually transformed from an agrarian-exporting economy to an urban-industrial economy. This political change directly impacted the national energy sector for the following decades, see Table 1.1. Table 1.1 Main actions that impacted the national energy sector in the 1930s Name

Category

Creation

Highlights

Nº 19.717

Decree

1931

It is mandatory to mix 5% of alcohol with imported gasoline and the use by vehicles belonging to public bodies of fuel containing at least 10% alcohol (Brazil 1931)

National Department of Mineral Production

Institution

1934

Assess energy reserves represented by hydraulic potential and investment in search of petroleum in the territory (Ministério da Agricultura 1939)

Nº 24.642, known as Mines Code Decree

1934

Remove obstacles related to subsoil richness and exploration, that is, to make the subsoil property independent of that one of the soils (Brazil 1934a)

Nº. 24.643, known as Water Code

Decree

1934

It established the dissociation between land ownership and ownership of waterfalls and other hydraulic energy sources and defined the regime for authorizations and concessions for hydroelectric projects (Brazil 1934b)

National Petroleum Council (CNP)

Decree

1938

CNP became responsible for the entire oil industry in the country and nationalized the oil even before its discovery in the territory (Peyerl et al. 2019)

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From the 1930s, the first regulations of the energy sector occurred, including mainly in the electricity sector, with emphasis on implementing the Water Code, which highlights water as a public domain good, of common interest, whose conservation is essential (Brazil 1934b; Gomes and Vieira 2009). The political changes of the period also occasioned the acceleration of Brazilian economic development and, at the same time, the increase in energy demand (Gomes and Vieira 2009). In 1939, through the Ministry of Agriculture, the Brazilian government emphasized the excessive use of firewood as fuel in various sectors, stating that this source should only be a subsidiary in large industries (Ministério da Agricultura 1939). Furthermore, it is pointed out that this excessive use of firewood should come together with rigorous reforestation, which in fact, did not happen (Ministério da Agricultura 1939). Therefore, concern for the environment directly related to an energy source emerges in government speeches. In addition, the potential of wind as a new energy source to be explored, mainly in the country’s northeast region, began to be discussed in the Brazilian government agenda. However, the world energy economy of the period turned to petroleum. After discovering petroleum in the state of Bahia in the same year, this discovery brought a new political, energy, and economic scenario to the country for decades to come (Peyerl et al. 2019), which will be discussed throughout this chapter. In the 1940s, Brazil underwent intense political revision of economic nationalism linked mainly to petroleum issues, as the oil industry had not developed yet (Peyerl et al. 2019). In addition, the Brazilian energy supply mix was still dependent on firewood; the amount of coal available did not supply the demand for large-scale development of the industrial sector; fuel oil and diesel were still imported, which affected the country’s exchange rate balance; and the bets for the electricity sector were focused on the country’s rich hydroelectric potential (Ackerman 1955). It is highlighted that, from 1930 to 1940, the installed power of hydroelectric plants almost doubled in the country, going from 630 MW to 1009 MW of electricity generation (Ackerman 1955). From 1940 to 1951, electricity consumption rose from 62.4 kWh/inhabitant/year to 166 kWh/inhabitant/year, and the installed capacity, which was 1.2 GW, rose to 2 GW (Oniga 1955). Despite investments, these increases were still considered low according to the country’s electricity needs. In 1950, through another example, the per capita consumption of petroleum products in the country was 110 L per population, while in the USA, this consumption reached 2340 L (Ackerman 1955). At the beginning of the 1950s, the developmental policy came stronger in Brazil, searching for the necessary technologies and precise actions to achieve the energy and transport goals to supply all the sectors (Vargas 1994). The lack of energy resources to supply the growing national demand, mainly fossil fuels, and the technologies available for their use made the Brazilian government look for alternative resources and technologies even more little-explored both internationally and nationally. The Brazilian government invested in developing the industry and technologies based on these plans.

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In 1953, for example, the investment in petroleum led to the creation of Petrobras (Brazilian Petroleum Industry), through Law 2.004, monopolized the research, mining, refining, trading, and transportation of oil from wells or shale from its derivatives and any related or similar activities (Brasil 1953). From 1955, the potential of other resources was being discussed in Brazil: ● Solar energy: Use of energy in a thermal way; economically unviable in countries like Brazil with energy supply problems; technological development and innovation still in progress; and the uncertainties about an adequate government policy for the exploration of the source (Nunes 1955). ● Natural gas: The possibility of using gas turbines. This is widely used in other countries in Latin America, which was still incipient in Brazil (Yépez-García et al. 2011). ● Thermal energy of the seas: Favorable geographic conditions to explore this type of source. The main technical difficulty was placing the tube to draw water from the bottom of the sea. It is noteworthy that, in 1934, some experiences had already taken place in the world, including in Brazil, in which a plant installed on a freighter had problems with the ballast placed at the end of the tube vertically submerged in the ocean, which caused oscillations that displaced it and lost it at sea. The possibility of installing floating plants could occur mainly in Northeastern regions (Casal 1955). ● Wind Energy: Instability and insecurity of the supply offered and the impossibility of direct storage for regularization. And as far as technology goes, growing knowledge of aerodynamics, electrotechnics, and structural engineering could produce economically viable technologies in the future (Oniga 1955). Despite the interest and attempts to invest in other sources, energy density (consumption) did not correspond to demographic density in Brazil. Due to the industrial and urban process, states like Rio de Janeiro and São Paulo lacked energy much more than regions like the northeast (Oniga 1955). Therefore, the wind potential, which could obtain investments in the northeast region, was not a priority due to precarious infrastructure and the other problems already mentioned above. In addition, the necessity of energy boosted the geopolitics of energy interconnection between South American countries intensified in the 1950s to 1960s (da Silva 2022; da Silva et al. 2018). Following the flow of developed countries, the country’s investments focused on the oil industry and fixed on the potential hydraulics for the electricity sector.

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The Transformation of the Landscape: Opening Roads and Building Hydroelectric From 1926 onward, the first road plans were drawn up, and the motto of the government in the period was to open roads, becoming one of the first initiatives to prioritize the road modal (de Paula 2010). It is highlighted that road construction was intensified from the middle of the 1940s, with road layouts parallel to the rails. This contributed to boosting competition between modes instead of stimulating the intermodal integration of transport (de Paula 2010). The diagnosis of the economy in the early 1950s pointed to the need for investments in infrastructure (for example, electricity generation and transport facilities) to boost the industrial sector (de Paula 2010). Followed later by the developmental policy of Juscelino Kubitschek’s government in the middle of the 1950s with the motto 50 years in five (Vargas 1994). This policy accelerated investments in technologies to achieve the long-awaited targets for the energy and transport sectors, including integrating the Brazilian states through the road system (Vargas 1994). Due to the investments in building roads, the prices and the availability of diesel imports and production, the Brazilian government invests massively in using this fuel for heavy vehicles, mainly after 1955. In addition, Petrobras invested in onshore fields exploration and building and operation of refineries (e.g., Landulpho Alves Refinery began its operations in 1950); Presidente Bernardes refinery (started its operations in 1955); Duque de Caxias refinery (beginning of construction in 1957); Gabriel Passos refinery (beginning of development in 1962) what fostered the use of diesel in Brazil during the 1950s and 1960s (Peyerl et al. 2018; dos Santos and Peyerl 2019). These investments caused a replacement or transition from gasoline and alcohol to diesel in trucks in the 1960s (see Chap. 11), and gasoline became the primary fuel for light cars. Also, in 1964, Brazil stopped exporting diesel from other countries representing further great landscape transformation due to the increased number of trucks moved by diesel, see Fig. 1.2. This landscape transformation in the Brazilian scenario also made part of the electricity sector, but in a different way. From the 1940s, the electricity sector was affected by: (i) the difficulty in importing equipment due to World War II (1939– 1945) (Hunt et al. 2018), demonstrating the country’s fragility as an importer of technology for the sector and; (ii) the growing increase in demand about generation capacity, linked to the processes of urbanization, industrialization, and the use of electrical household appliances (de Oliveira 2018). The accelerated economic growth from the Plano de Metas (Target Plan) of Kubitschek’s government prioritized projects for the electricity sector and invested 43% of the government budget between 1957 and 1961, including building hydroelectric plants (Gomes and Vieira 2009). The creation of the Ministry of Mines and Energy in 1961 and Centrais Elétricas Brasileiras S.A. (Eletrobras—national electricity company) in 1962 boosted the process of restructuring the institutional model of the electricity sector (Gomes and Vieira 2009; Paixão 2000). In this period, the hydroelectric resources came under

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Diesel exported (Liters)

7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970

Fig. 1.2 Brazilian importation and exportation of diesel between 1954 and 1960 (IBGE 1987)

state control, enabling the project to integrate the energy resources of the same basins. It was also in this decade that many projects for large hydroelectric plants were started; the small hydroelectric plants, from that moment on, ceased to be a priority for the generation of hydroelectricity in Brazil. Eletrobras became a company inducing the nationalization process of the electricity sector, where the government, through federal and state public companies, assumed the investments both in the construction of plants and in the interconnection of the systems (Gomes and Vieira 2009; Sasse and Saes 2016). From 1951 until 1962, 58 dams were built in the country, increasing the production of electricity from the hydraulic source by 138% (de Oliveira 2018). In sum, the formation of the know-how of the oil industry (Peyerl et al. 2019) and the great acceleration of hydroelectric construction (de Oliveira and Florentin 2019) in the period mentioned above contributed to the shape of the landscape throughout Brazil. For instance, both cases led to the opening of roads, the rapid population and urban growth, the investments in the infrastructure of the electricity sector, the creation of jobs, and increased consumption through household appliances (de Oliveira and Florentin 2019; Peyerl et al. 2021a). It is highlighted that the country’s energy supply mix was still dependent on wood and charcoal in the period mentioned (Fainzilber 1980).

Brazil After the Oil Crisis: Moving Away from Oil Dependence? The economic effects of the oil crisis in 1973 impacted the energy sector worldwide, forcing the countries to review their energy policies and mainly the dependency on oil imports (Balassa 1979; Potter 2008; Yergin 2010). In the case of Brazil, the

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country was highly dependent on imported oil supplies to fuel an industrialization process (Barrera 2018). In addition, the price of oil imports quadrupled (Balassa 1979). Consequently, new strategies for the energy sector had to be adopted (Potter 2008). In the transport sector, the creation of the Proálcool program in 1975 aimed to develop techniques and improve inputs to produce ethyl alcohol (de Andrade et al. 2009). In the first years, the production of anhydrous ethyl alcohol to be added to gasoline, posteriorly, the first cars powered entirely by hydrated ethyl alcohol began to circulate in 1978 (de Andrade et al. 2009). It is highlighted that Proálcool is one of the most public policy programs developed by the Brazilian government (Andersen 2015). In 1981, around 90% of cars sold could be fueled, demonstrating the program’s success and a quick transition (Sovacool 2016). In the 1980s, the Brazilian government started to invest in natural gas as a fuel. In 1987, the National Plan for Natural Gas (Plano Nacional do Gás Natural), known as PLANGÁS, was launched, aiming the use natural gas as a substitute for diesel in the collective transportation of passengers and heavy transport (União 1989). In the case of the electricity sector, 90% of the total electricity generated arose from hydroelectric plants; in addition, 40 large dams were under construction in the country in 1974 (de Oliveira and Florentin 2019). In 1979, the second oil crisis also strongly affected the upward investment curve in the Brazilian electricity sector (Gomes and Vieira 2009). Despite the low investments in the sector in the 1980s, three large projects were carried out: Itaipu and Tucuruí hydroelectric and the nuclear plants in Angra dos Reis (de Oliveira and Florentin 2019). The growing economic crisis of the 1980s and the search for energy security in the electricity sector led to the government investing in thermoelectric plants, increasing by 140% in installed capacity (IBGE 1987). From the 1990s onward, electricity generation was surrounded by numerous regulatory problems throughout history (Peyerl et al. 2021b). Then, the Brazilian government acted to privatize and restructure the electricity sector, initiating, in 1996, the Restructuring Energy Sector Project (RE-SEB) (Paixão 2000). Important institutions/agencies were created during this period: National Electric Energy Agency (ANEEL) in 1996, National Energy Policy Council (CNPE) in 1997, National Electric System Operator (ONS) in 1998, and National Water Agency (ANA), in 2020. After that, the problem of sector regulation Brazilian electricity sector began to organize itself; however, the insufficient supply of electricity, the occurrence of energy rationing in 2001 due to droughts, and the negative impact on the economy still forced the government to act quickly (Bermann 2007), defining the New Model of the Electricity sector in 2004, when the Regulated Contracting Environment and Free Contracting Environment were determined, and the creation of bodies such as the Electric Energy Commercialization Chamber (CCEE) and the Energy Research Company (EPE) illustrate the growing participation of private capital in the energy sector, making the commercialization of energy and growing planning of the national energy sector, both in the generation, transmission, and distribution. Other events related to the energy sector marked the beginning of the century in the country related to the electricity and transport sector:

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● The creation of the Programa de Incentivo às Fontes Alternativas de Energia Elétrica (Incentive Program for Alternative Sources of Electric Energy— PROINFA) by the federal government in 2002 to increase the participation of renewable sources such as wind and solar in the Interconnected National System (SIN) (Dutra and Szklo 2006). Also, this public policy resulted in the addition of renewable sources in the electricity sector (York and Bell 2019). Since the authors consider that the energy transition from fossils to renewables took place in the early twentieth century, as demonstrated in the first section of this chapter; and ● There was a rapid energy transition in the Brazilian transport sector between 2004 and 2009 when the government incentivized flex-fuel vehicles. In this case, the new automobile sales of flex-fuel vehicles surpassed other types of vehicles powered by other fuels (Sovacool 2016). In a nutshell, the country was heading toward what we questioned in the title of this section: moving away from oil dependence. Brazil created and developed alternatives to guarantee energy security, industrialization, and fuel consumption. While all this government investment and a possible non-dependence on fossil fuels were observed, this was far from our reality for two reasons: (i) the largest percentage of the Brazilian energy supply mix belonged to petroleum; and (ii) investments records and highs in finding oil in the country, specifically in the offshore area. In other words, the unexpected happened, the pre-salt discovery was announced in 2006, and it reached its self-sufficiency in 2010 (dos Santos and Peyerl 2019). The long-awaited self-sufficiency sought throughout the history of oil in the country (Peyerl et al. 2019). And not only that, but also a way to increase the country’s revenue by exporting hydrocarbons. What could Brazil expect then? The Paris agreement and its goals, the search for an energy transition from fossil fuels to renewables, a distant world of fossil fuels which we have been looking for since the mid-nineteenth century in the territory.

Final Remarks: What Does the Energy Transition from the Past Teach Us? The energy transition associated with historical context requires us to rethink the type of energy source and the methods/technologies we should use to generate energy. However, this book chapter intended to go further, not only demonstrating the energy transition processes observed throughout history, bringing lessons on how: (i) the appropriation of energy resources changes according to the context of the period; (ii) the design of a consistent and long-term public policy is fundamental for the development and insertion of new technologies and energy sources in the different sectors of the economy (e.g., Proálcool, PROINFA, Eletrobras); (iii) the presence and investments of the state are decisive for accelerating the process of building the energy sector; (iv) the global economy shapes different realities; and (v) each country

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needs to have a bit of luck about the energy potential available in the territory (i.e., currently, Brazil has one of the cleanest electrical matrices in the world). Finally, we can observe that large-scale transitions have a much more significant impact factor on countries through international agreements. But, in fact, quick and alternative energy transitions occur according to regional characteristics and internal needs. Therefore, Brazil faces the challenge of remodeling its energy sector, contributing to a low-carbon energy transition, which will be seen in subsequent chapters of this book. Acknowledgements All the authors gratefully acknowledge support from SHELL Brazil and São Paulo Research Foundation (FAPESP) through the Research Centre for Greenhouse Gas Innovation (RCGI) (FAPESP Proc. 2014/50279-4 and 2020/15230-5), hosted by the University of São Paulo, and the strategic importance of the support given by ANP through the Research & Development levy regulation. Peyerl thanks the current financial support of grant Process 2017/18208-8, 2018/26388-9, FAPESP. Stefania Relva and Vinícius Silva thank especially Conselho Nacional de Desenvolvimento Científico e Tecnológico, for the scholarship. This work was partially financed by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior.

References Ackerman AJ (1955) Planning of the electric power industry in Brazil. In: Anais Da Reunião Parcial Do Rio de Janeiro. Conferência Mundial de Energia, Rio de Janeiro, pp 1–136 Andersen AD (2015) A functions approach to innovation system building in the south: the PreProálcool evolution of the sugarcane and biofuel sector in Brazil. Innov Develop 1:1–21 Balassa B (1979) Incentive policies in Brazil. World Dev 7(11–12):1023–1042 Barrera LPD (2018) Energy revolution: ideas, policy entrepreneurs, and institutional change in Brazil following the 1973 oil crisis. Johns Hopkins University Bermann C (2007) Impasses e Controvérsias Da Hidreletricidade. Estudos Avancados Borges BG (2011) Ferrovia e Modernidade. Revista UFG XIII(11):27–36 Brasil (1953) Lei N° 2.004, de 03 de Outubro de 1953. http://www.planalto.gov.br/ccivil_03/leis/ L2004.htm Brazil (1931) Decree 19.717. http://www.planalto.gov.br/ccivil_03/decreto/1930-1949/D19 717.htm#:~:text=DECRETONo19.717%2CDE20DEFEVEREIRODE 1931.&text=Estabelece a aquisição obrigatória de,importada%2Cedáoutrasprovidências Brazil (1934a) Decree n. 24.642. https://www2.camara.leg.br/legin/fed/decret/1930-1939/decreto24642-10-julho-1934-526357-publicacaooriginal-79587-pe.html Brazil (1934b) Decree n 24.643. http://www.planalto.gov.br/ccivil_03/decreto/d24643compilado. htm Calógeras JP (1905) As Minas Do Brazil e Sua Legislação. Imprensa Nacional, Rio de Janeiro Casal P (1955) Energia Térmica Dos Mares. In: Conferência Mundial Da Energia, pp 101–109 Chen B et al (2019) Pathways for sustainable energy transition. J Cleaner Prod Curi LFB, Saes AM (2014) Roberto Simonsen e a Modernização Do Brasil Na Primeira República. História econômica & história de empresas 17(2):313–352 da Silva VO (2022) Como Inserir Recursos Energéticos Importados No Planejamento Energético Nacional? Modelo de Determinação de Recursos Energéticos Para a Integração Energética Transnacional. Escola Politécnica da Universidade de São Paulo

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Moretto EM, Gomes CS, Roquetti DR, De Oliveira Jordáo C (2012) Histórico, Tendências e Perspectivas No Planejamento Espacial de Usinas Hidrelétricas Brasileiras: A Antiga e Atual Fronteira Amazônica. Ambiente e Sociedade 15(3):141–164 Myhrvold NP, Calderia K (2012) Greenhouse gases, climate change and the transition from coal to low-carbon electricitynhouse gases, climate change and the transition from coal to low-carbon electricity. Environ Res Lett 7:014019 Nunes AJC (1955) Energia solar. In: Conferência Mundial Da Energia, pp 3–8 Oniga T (1955) Características Brasileiras Para o Aproveitamento Da Energia Eólica. In: Conferência Mundial Da Energia, pp 498–508 Paixão LE (2000) Memórias Do Projeto RE-SEB. Massao Ohno Editor. Peyerl D, de Silvia F, Figueirôa M (2016) Black gold: discussions on the origin, exploratory techniques, and uses of petroleum in Brazil. Oil-Industry History 17:98–109 Peyerl D et al (2018) Brazil and the problem of domestic supply of fossil fuels. Oil-Industry History 19(1):97–106 Peyerl D et al (2019) The oil of Brazil. Springer, Berlin Peyerl D et al (2021a) Building Brazil’s petroleumscape on land and sea. In: Hein C (ed) Oil space—exploring the global petroleumscape. Routledge, London, pp 145–158 Peyerl D et al (2021b) Tecnologias Disponíveis Para Mitigação Dos Efeitos Adversos Sobre o Meio Ambiente: Das Primeiras Renováveis à Economia Do Hidrogênio. In: Pimental C, Rolim MJCP (eds) Caminhos Jurídicos e Regulatórios Para a Descarbonização Do Brasil. Fórum, Belo Horizonte, pp 119–131 Pires J (1916) Combustível Na Economia Universal. José Olympio, Rio de Janeiro Potter NI (2008) How Brazil achieved energy independence and the lessons the United States should learn from Brazil’s experience. Washington Univ Global Stud Law Rev 7(2):331–352 Prefeitura de São Paulo (1925) A Crise Da Energia Electrica. Correio Paulistano 3 Sasse CM, Saes AM (2016) A Eletrobras e as Empresas Fornecedoras de Equipamentos Para o Setor Elétrico Brasileiro (1960–1980). Rev Hist 74:199–234 Smil V (2010) Energy transitions: history, requirements, prospect. ABC-CLIO Sovacool BK (2016) How long will it take? Conceptualizing the temporal dynamics of energy transitions. Energy Res Social Sci 13 Vargas M (1994) O Início Da Pesquisa Tecnológica No Brasil. In: Vargas M (ed) HIstória Da Técnica e Da Tecnologia No Brasil. Universidade Estadual Paulista, São Paulo, pp 211–224 Yépez-García RA, Johnson TM, Andrés LA (2011) Meeting the balance of electricity supply and demand in Latin America and the Caribbean. World Bank Publications. Yergin D (2010) O Petróleo: Uma História Mundial de Conquistas, Poder e Dinheiro. Paz & Terra York R, Bell SE (2019) Energy transitions or additions? Why a transition from fossil fuels requires more than the growth of renewable energy. Energy Res Social Sci 51:40–43 Zhang G et al (2019) Giant discoveries of oil and gas fields in global deepwaters in the past 40 years and the prospect of exploration. J Nat Gas Geosci 4(1):1–28

Chapter 2

Knowledge Mapping: A Review of the Energy Transition Applied to Brazil Vinicius Oliveira da Silva, André dos Santos Alonso Pereira, Stefania Gomes Relva, and Drielli Peyerl Abstract This book chapter aims to map the knowledge on the theme of energy transition applied to Brazil. The methodology applied is the bibliometric review, which uses as input the keywords of this book’s chapters to obtain in the indexed journals portal—Web of Science—published records. Then, they were analyzed and discussed to result in the current map of knowledge on the theme. The results demonstrate that: (i) international exploration in the energy transition is not recent, but the first record identified about energy transition applied to Brazil is from 2007; (ii) the evolution of the number of annual publications can be divided into three periods, the last one (2021–2022), more intense—20 publications against 22 publications in the first two periods; (iii) the number of published records, 42, is scarce, when compared to records that are not specific to Brazil (6191); (iv) the main institutes linked to the records are Brazilian and public; (v) funding is almost exclusively public, 97% of the total; (vi) there are no authors with an evident number of records, maximum of two records for the same author; and (vii) the main keywords are related to energy transition assessment data and indicators and environmental issues. It is concluded that the theme inserted in the Brazilian context is little explored and quoted compared to the theme in the international scope. Thus, expanding funding sources and enabling the formation of new research are needed. Therefore, this chapter was intended to V. O. da Silva (B) · S. G. Relva Energy Group of Department of Energy and Electrical Automation Engineering of the Polytechnic School, University of São Paulo (GEPEA/EPUSP), Av. Professor Luciano Gualberto, Travessa 3, N° 158, Prédio da Engenharia Elétrica, São Paulo, Brazil e-mail: [email protected] S. G. Relva e-mail: [email protected] A. S. A. Pereira · D. Peyerl Institute of Energy and Environment, University of São Paulo, Av. Professor Luciano Gualberto, N° 1289, São Paulo, Brazil e-mail: [email protected] D. Peyerl e-mail: [email protected]; [email protected] D. Peyerl University of Amsterdam, Science Park 904, Amsterdam, Netherlands © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Peyerl et al. (eds.), Energy Transition in Brazil, The Latin American Studies Book Series, https://doi.org/10.1007/978-3-031-21033-4_2

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improve the research environment and strengthen the debate with fundamentals, data, information widely discussed and validated, nationally and internationally. Keywords Energy transition · Bibliometric review · Knowledge mapping · Brazil

Introduction Energy transition (ET), as a prominent theme, is in vogue in global discussions (Pastukhova and Westphal 2020) and has been explored and debated over the years (Leach 1992; Smil 2010; Solomon and Krishna 2011; Taylor and Tainter 2016; Selvakkumaran and Ahlgren 2020), mainly about the types of energy sources (Daioglou et al. 2012; Coelho et al. 2018; de Vieira and Carpio 2020; Campos and Viglio 2021) and its relevance on decarbonization and climate change (Solomon and Krishna 2011; Lap et al. 2022; Vatalis et al. 2022). This debate, as Peyerl et al. (2022) points out, must be carried out on common bases—time, impulse, and scale of the ET; keeping in mind that the ET can incorporate different concepts—fair ET, sustainable ET, low-carbon ET, green ET, and energy addition -; and e actions—short (Sovacool 2016; Xiong et al. 2020; Dong et al. 2021) and long term (Kumar et al. 2019; Doh et al. 2021); the last one is more common. However, regardless of the bases and concepts applied, the actual ETs encompass a common goal, which is to achieve a low or zero-carbon society (see Chap. 1). This chapter explores ET in a broad way, dissecting the knowledge developed and accumulated over the years. To achieve this knowledge mapping of ET, it is essential to understand the concepts that are directly or indirectly related to it. Mapping this concept is important to be able to differentiate the methodologies of analysis (Power et al. 2016; Geels et al. 2018; Wieczorek 2018) and to standardize and direct the debate about ET—be it local, regional, national, or international (da Silva 2022) (see Chaps. 3 and 7). Though this is not a trivial task since only on the Web of Science (WOS), there are more than six thousand indexed publications on the theme (WOS 2020b) and on the Dimensions are more than 89.5 thousand, considering only records of type articles (Digital Science and Research Solutions 2022). Nonetheless, when ET is analyzed under the lens of its discussion and application in Brazil, there is a lack of indexed records of bibliographic review. This type of record is important because they map the knowledge, reflect the limitations and advances, and demonstrate this production’s temporal and locational landscape. They are common in some countries and regions (Marvuglia et al. 2020; Elie et al. 2021; Omrany et al. 2022; Qin et al. 2022), including in developing countries (Nalule 2021; Todd and McCauley 2021; Zhang et al. 2021; Revez et al. 2022). In this sense, the objective of this chapter is to conduct a bibliometric review on the theme of energy transition applied to Brazil (ETB), aiming at knowledge mapping. Given this, a guiding question, “Is there a consistent production of records being published on ETB?” is used as a starting point for constructing the content review. Based on the analysis and results of the methodological review stage, we propose to

2 Knowledge Mapping: A Review of the Energy Transition Applied to Brazil

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answer a second question: “What is the amplitude of the results found in the analysis of the specialized literature on the theme? And through the response, it is possible to analyze and systematize information, assumptions, risks, procedures, obstacles, and bottlenecks in the existing ETB research answered in the following sections.

Mapping Brazilian Energy Transition Knowledge The bibliometric review is adopted in this book chapter, which consists of mapping the knowledge (Zhou et al. 2018; Jiang and Ashworth 2021; Silva 2022) about the evaluated theme—TEB. The bibliometric review is organized in three phases: (i) identification, (ii) sorting (research algorithm and screening process), and (iii) visualization of the knowledge domain, see the schematic arrangement in Fig. 2.1. The phases of the identification process consist of: (1) selection of the information source; (2) stipulated period of publications; (3) idiom; (4) record type; and (5) keywords and grouping and classification of keywords. The records survey conducted on the WOS portal considered the types: article and review, published in all years and available idioms. The keywords used for the bibliometric survey are the keywords utilized in all the chapters of this book—apart from this chapter—see Fig. 2.1. Thus, all keywords used are in the English idiom. These keywords were adopted to focus the bibliometric review of ET in the themes developed in this book. To better organize the research, these keywords were grouped into five main themes: resources; technical–economic; sector; environmental; social and political. These groupings define the structure of the bibliometric review. The keywords from the same group were combined using the Boolean operator OR to retrieve records that contain at least one of the searched keywords (WOS 2020a). In the sorting phase, three surveys were conducted: Research #1 resulted in the number of records related to energy transition; Research #2 resulted in the number of records that are related to energy transition and considered at least one of the keywords of Group 1 to 5; and Research #3 resulted in the records of Research #2 that are related to Brazil. In this last research, an operator is used to find word variations: the operator “?” is used (Bra?il), to identify and return all possible word variations and expand the search results. This was made because Brazil in Portuguese is written with s instead of z. After the survey, the records of the published journals are collected from the WOS portal in a format compatible with .xls files and the screening step is performed, which consists of (i) exclusion of records with missing information; in this case, records without title, keywords, and abstract are excluded; (ii) verification and deletion of duplicated records; and (iii) verification of adherence of records to the theme, e.g., Do the records address issues correlated to TEB? If they do not, they are excluded; and (iv) consolidation of the records to form the final analysis sample. Finally, from the final records, the domain visualization is performed in two phases: (i) statistical analysis of records (Chen 2006); e (ii) co-occurrence analysis (Zhou et al. 2018; Jiang and Ashworth 2021) using the software VOSViewer.

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Fig. 2.1 Schematic arrangement of the bibliometric review based on da Silva (2022)

Brazilian Energy Transition for Whom, Where and When The bibliographic survey from Research #1 identified 6,191 records, of which 92 have Brazilian researchers and institutions. Germany (1104), the USA (801), China (720), and the Netherlands (501) are the countries with the highest number of records attributed to their researchers and institutions. The analysis of Research #1’s international collaboration network (see Fig. 2.2) demonstrates that this collaboration is greater with researchers from European countries, mainly Germany, Austria, Finland, Portugal, and Italy. The thicker the network of nodes line, the greater the interaction of researchers from different countries. This network of nodes has seven clusters, of which Brazil is present in cluster

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03, containing ten countries. That is, it is a country with medium participation of researchers who work in an international network on the theme of ET. After applying the keyword groping filter (Research #2) and the geographic filter (i.e., limiting results related to Brazil in Research #3), 45 records are identified. Thus, 0.7% of the records on ET are applied to Brazil. To start the manual screening phase, these complete records are exported from the WOS portal in .xls format. Three records with missing information were excluded, resulting in 42 pre-selected records. After applying this filter to analyze the network of nodes, the result corroborates that Brazil has become the main regional cluster (largest circle) because of the emphasis on ETB research (See Fig. 2.3). This network shows four sets, of which Brazil is inserted in only one—indicating that the ETB is addressed in international research without necessarily the participation of Brazilian researchers and institutes.

Fig. 2.2 Network of international collaboration nodes of researchers

Fig. 2.3 Network of nodes after the application of geographic screening

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Still, in the screening phase, the idiom and types of documents in the records are verified. Regarding the idiom of the 42 records, 39 are in English, two in French and one in Portuguese. Besides that, all have titles, keywords, and abstracts in English. As for the type of document, the article type represents 93% of the total (39); while review represents 5% (02), of which one is classified in both review and early access (Lewis 2021); and one in article and proceedings paper; in this case, the article was initially published at a conference and later selected and published in an indexed and peer-reviewed journal (Breyer et al. 2018). In this type of classification, it is normal for the sum of the distribution of records to be greater than 100%, as records can be classified simultaneously in more than one type of document (Dechy et al. 2004; Babrauskas 2017). Finally, the bibliometric analysis is performed based on the 42 identified, screened, and selected records. The results and discussions are presented in the following subsections.

Knowledge Growth of Energy Transition Applied to Brazil The analysis of data from the 42 records found that the first record published on the topic ETB was from 2007. This record discusses fusion technology—experimental reactor ITER—characterizing it as a promising source due to the almost unlimited fuel reserves, which allows environmental sustainability. This project is developed by a network of institutes distributed in European Union countries, Japan, Russia, the USA, China, and Brazil. However, the record demonstrates that other physical structures must be developed to design this type of energy production (Janeschitz and Bahm 2007). Therefore, considering the research methodology established in this chapter, this record opens the theme of ETB. After a three-year hiatus, a second record was published in 2010, which discusses the increase in global energy demand, directly impacting countries’ energy security and climate change, requiring a reduction in greenhouse gas (GHG) emissions. The author argues that there is a need for an ET to move away from fossil fuels to the detriment of low-carbon alternatives, advocating the use of renewable and nuclear energy and the technology transfer from developed countries to emerging and developing countries (Bradshaw 2010). It is noted in this article the introduction of topics near to the ET, such as the use of low-carbon alternatives, the substitution of fossil fuels, and technology transfer between developed and developing countries (Relva et al. 2021). Following Jiang and Ashworth (2021) and da Silva’s (2022) suggestion to understand the evolution of the theme, the period of records published annually is divided into three phases: (i) limited interest phase (2007–2016); (ii) initial interest phase (2017–2020); and (iii) rapid growth phase (2021–2022), where it is observed that there is an increasing trend in the number of records published annually (see Fig. 2.4). In the limited interest phase (2007–2016): a single record is published annually, with an interval of up to three years between successive publications; only

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23 45

18

Annual publications

16

Accumulated publications

40 35

14

30

12

25

10 20

8

15

6 4

10

2

5

0

2007

2010

2011

2012

2015

2017

2018

2019

2020

2021

2022

Number of acumulated publicatins

Number of annual publications

20

0

Fig. 2.4 Evolution of the number of records published annually

between 2010 and 2012 was one record published annually; in total, five records were published in ten years; the most cited record, with 147 citations, explores long-term scenarios for changes in residential energy use in developing countries, demonstrating that climate policies can delay the ET from traditional fuels to modern fuels for low-income populations (Daioglou et al. 2012); and the second most cited record, with 141 citations, analyzes the ETs that took place in the past, one of them being the transition from fossil fuels to sugarcane ethanol that took place in the Brazilian transport sector, identifying which political instruments can accelerate the energy transition of countries or some sectors (Solomon and Krishna 2011). In the initial interest phase (2017–2020), there was a substantial increase in the number of records published annually compared to the previous period. In this period of four full years, 17 records were published, more than four per year, with a peak in 2020, when six were published, of which one has 114 citations and models the power sector with 100% renewable energy, among them, the Brazilian power sector, concluding that solar photovoltaic (PV) generation can play a leading role in this transition (Breyer et al. 2018). In addition to this record, there is one with 47 citations (Dong et al. 2018), one with 29 (Kumar et al. 2019) and one with 28 (dos Carstens and da Cunha 2019). In the rapid growth phase (2021–2022), although it has only one full year (2021) and the first quarter of 2022 (the survey is considered until the end of March 2022), research on ETB has become mainstream, as 18 records were published in one year (2021), more than the total of records published during the initial interest phase and almost all published in the first two phases, 22 against 20 published in the last one. Some of these records, although published recently, have a considerable number of citations, such as (i) one with 36 citations, which addresses low national emission scenarios for some countries, such as Brazil (Fragkos et al. 2021); (ii) one with 28

24 Table 2.1 Main research areas of the analyzed records

V. O. da Silva et al. Categories

Number

%

Energy fuels

19

45.2

Environmental sciences ecology

16

38.1

Science technology other topics

9

21.4

Business economics

8

19.0

Engineering

6

14.3

Thermodynamics

3

7.1

Development studies

2

4.8

Geography

2

4.8

citations, investigating, from the sociotechnical point of view, the emergence of PV technology in Brazil, identifying its challenges and opportunities (dos Carstens and da Cunha 2019); and (iii) one with 26 citations, which applies the Environmental Kuznets Curve (EKC1 ) model in emerging countries, like Brazil, suggesting that the policymakers should commit to the environment and the ET from fossil fuels to clean and modern energy sources (Bekun et al. 2021). Considering these three periods, there are 15 whole years. The records, in general, were cited on average 16 times, but with a median equal to two. Three received more than 100 citations, 14 had no citations; 14 were cited less than twice; and 10 had below-average citations. The most cited records explore the construction of energy demand scenarios in economic sectors or technological niches in developing countries or on a global scale (Breyer et al. 2018; Daioglou et al. 2012) and carry out a bibliographic review with systematization and characterization of bottlenecks and long-term projections for an ET, considering sustainable development (Solomon and Krishna 2011). In addition, the two most cited records belong to the phase of limited interest; that is, they were published at the beginning of the historical series constructed in this review.

An Analysis of the Research Area and Main Journals of ET Since the same record can be classified in more than one area, the 42 records are classified into 20 different areas on the WOS portal, of which 45% are in energy fuels, followed by environmental sciences ecology 38%, science technology other topics 21%, business economics 19%, and engineering 14%, see Table 2.1.

1

The environmental Kuznets curve (EKC) is a hypothesized relationship between various indicators of environmental degradation and per capita income. In the early stages of economic growth, pollution emissions increase and environmental quality declines, but beyond some level of per capita income (which will vary for different indicators) the trend reverses, so that at high income levels, economic growth leads to environmental improvement (Stern, 2018).

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Table 2.2 Main journal of the analyzed records Journal

Number

%

IF

Energy policy

5

12

5.042

Energy research and social science

5

12

6.834

Energy

3

7

7.147

Journal of cleaner production

3

7

9.297

MRS energy sustainability

2

5

–

Renewable energy

2

5

8.001

Renewable and sustainable energy reviews

2

5

14.982

This evaluation demonstrates that the records are produced mainly by researchers linked to the area of the exact sciences and, more specifically, to engineering, that is, the records have a technical and environmental bias on the engineering lens. This is evident in the two principal areas of research, energy fuels and environmental sciences ecology, where research focuses on the use of energy resources, whether they are renewable or not, and their relationship to the environment. This same characteristic was found by da Silva (2022), who evaluates the models and tools applied to energy planning in specific countries. Regarding journals, 42 records are published in 27 peer-reviewed journals. 39 of these journals are in English, two in French, and one in Portuguese. The journal Energy Policy (Impact Factor IF = 5.042) and Energy Research and Social Science (IF = 6.834) have five records (12% of the total) each, followed by the journals Energy (IF = 7147) and Journal of Cleaner Production (IF = 9297), with three publications each. The other journals have two to one published records (see Table 2.2). Two important features: (i) publishers have offices in European cities (Oxford and Elsevier are the most frequent), which demonstrates the European hegemony in the publishing market of articles related to this theme; and (ii) 60% of the records were published in journals by publisher Elsevier (25 records), and 19% were published by MDPi, Springer Nature, Taylor & Francis, and Wiley—two records each, other nine publishers have one records, see Table 2.3. These results demonstrate that the Elsevier publisher has the largest number of articles published on this theme, and the other publishers have secondary participation in the discussions and on the research theme.

Content Producing Regions and Countries The 42 records are produced by researchers from institutions allocated in 24 countries on five continents. Of these countries, twelve are in Europe, seven in Asia, two in North America (NA), one in South America (SA), one in Africa, and one in Oceania.

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Table 2.3 Main publishers of the analyzed records Publishers

Number

%

Elsevier

25

60

MDPi

2

5

Springer Nature

2

5

Taylor & Francis

2

5

Wiley

2

5

Table 2.4 Regions of the institutions linked to the records Region

Number

SA

23

EU

31

NA

6

Asia

11

Oceania

2

Africa

1

European institutions are presented in the highest number of records (31), followed SA institutions (23), all developed by researchers linked to Brazilian institutes, see Table 2.4. It is important to highlight that the same record can have more than one institution linked. When analyzing the production by countries individually and not by region, Brazilian institutes have the highest number of records—expected value, given the geographic scope applied to Brazil—followed by England with six, Italy and USA, with five records each, see Table 2.5. It is important to note that no other SA country beyond Brazil appears on the list. After Brazil, the NA and European institutions are linked to the highest number of records. This characteristic demonstrates that there is a collaboration between the authors and institutions of these two regions with the Brazilian ones, an expected fact, as they are the main destinations for technicalscientific exchange of Brazilian researchers (CAPES 2021), and there is a tendency to adapt solutions and models from these regions to the SA region, by technological and technical transfer (Kahen 1998; Liu and Liang 2011; Urban 2018).

Institutions, Funding Agencies, and Authors As for the institutions, there are 107 different institutions linked to the production of the 42 records. These institutions include universities, research institutes, public companies, private companies, and non-governmental organizations. The number of institutions is 255% higher than the total number of records, reinforcing the strong

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Table 2.5 Countries of the institutions linked to more than two published records Country

Number

Brazil

23

England

6

Italy

5

USA

5

Netherlands

4

China

4

Austria

3

Russia

3

Australia

2

France

2

Germany

2

India

2

Turkey

2

collaboration of researchers from different institutions to produce research and subsequent publication. This also suggests that research on Energy Transition and Brazil is inseparable from international institutions since of the 107 institutions, 20 are Brazilian or 19% of the total. Regarding the number of records, the two leading institutions are the Universidade Federal do Rio de Janeiro (UFRJ) and the Universidade Estadual de Campinas (UNICAMP), with 17% and 7%, respectively, of the total number of records. The institutions outside Brazil that contribute the most are English and Dutch universities, such as Durham University and Utrecht University. However, in absolute terms, 96 institutions participated in producing a single record (see Table 2.6). About the other Brazilian institutions, only the Instituto Federal do Rio Grande do Norte, the Universidade de São Paulo (USP), and the Universidade Federal Fluminense (UFF) participated in the production of two records each. The other 15 Brazilian institutions participated in the production of a single record each. As for the funding agencies, 26 were found, with 24 records. The other records do not contain data for this field. These data show that more than one agency is funding researchers from a single registry. Of the 26 agencies, 10 are Brazilian. The two main, Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES) and Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPQ), with five records each (see Table 2.7). Regarding the types of agencies, there is clear evidence that state agencies are the main funders of research, and if added to non-governmental agencies (foundation type), this number is higher than 97%, that is, on the total records with evident funding, only one was financed by a private institution, Volvo Group, which evaluates the wind profile to determine the potential of the wind resource as an option to

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Table 2.6 Main institutions Institutions

Number

%

Universidade Federal do Rio de Janeiro (UFRJ)

7

17

Universidade Estadual de Campinas (UNICAMP)

3

7

Durham University

2

5

Fed. Inst. Educ. Sci. Technol. Rio Grande do Norte I

2

5

Institut de Recherche Pour le Developpment IRD

2

5

Int Virtual Inst. Global Change Ivig

2

5

Istanbul Gelisim University

2

5

PBL Netherlands Environmental Assessment Agency

2

5

Universidade de São Paulo

2

5

Universidade Federal Fluminense

2

5

Utrecht University

2

5

Table 2.7 Main funding agencies Funding agencies

Number

%

Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq)

5

11.9

Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (Capes)

5

11.9

Fundação de Amparo à Pesquisa do Estado de São Paulo (Fapesp)

3

7.1

National Natural Science Foundation of China (NSFC)

2

4.8

replace coal-fired thermoelectric plants, as a decarburization solution for the electricity sector. However, even in this article, a state agency has funding (Dong et al. 2018). This result demonstrates that the participation of funding agencies, not only in Brazil but in all regions of the world, is essential for developing and producing scientific knowledge. This same finding has already been determined by da Silva (2022). Regarding authorship, the data show that there are 167 authors for the 42 records, approximately four authors for each record, with only two having a single author, 13 having two authors and one having 17 authors. Four authors, two of whom are Brazilians, are represented in two records, while the remaining 163 authors are represented in a single record (see Table 2.8). The two Brazilian authors, da Silva N.F. e Pereira M.G., are co-authors of the same records. They belong to research institutes in Rio de Janeiro (UFRJ and CEPEL) and approach the ET (i) in the light of the insertion of wind power as a renewable and decarburization resource, and (ii) the nexus between energy poverty and CO2 emissions in Brazil (de Azevedo Dantas et al. 2019; Pereira et al. 2019). Another expressive characteristic is that almost all the authors are men and conduct research in collaboration with other male authors. In the case of authors from Brazilian institutions, the records show that the collaborations are mostly between

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Table 2.8 Main authors Authors

Number

%

Da Silva, N. F

2

5

Daioglou, V

2

5

Pereira, M. G

2

5

Viglio, J. E

2

5

researchers from the same institution. In contrast, for authors from other regions, the records show an intense collaboration between different regions, demonstrating that no networks of international organizations are linked to the analyzed topic.

Keywords Clustering The keywords with the highest number of occurrences are energy transition (17), followed by Brazil (07), renewable energy (05), energy poverty (03), natural gas (03). These terms are the network’s main nodes (see Fig. 2.5) and have a high centrality value. In the case of energy transition, the centrality is 81, more than double the second keyword, Brazil (37), and more than three times that of the third, renewable energy (25). At the center of the network are the main terms used in research on ET. As one moves to the periphery of the network of nodes, the terms become more specific, like carbon reduction, smart grid, and electric motors, which are possibly related to case studies for particular regions and energy end-uses. This network of nodes is formed by 176 keywords and 15 clusters—median of 08, maximum of 13 and minimum of three items per co-citation cluster. The two largest clusters, items 13 and 12, respectively, demonstrate that: for the first, the main keywords are related to data and evaluation indicators, mainly linked to the composition and quality of these data, such as interval data, composite indicators, interval-based composite indicators, see Fig. 2.6a; the second, the keywords are related to environmental issues, mainly linked to climate change, such as GHG emissions, land-use change, and climate change mitigation, see Fig. 2.6b.

Energy Transition Knowledge Evolution in the Brazilian Scenario Based on the results of the BR, it is possible to explore the amplitude of research on the ETB and answer the guiding question “Is there a consistent production of records being published on ETB?” and the second question, “What is the amplitude of the results found in the analysis of the specialized literature on the theme?”.

30

Fig. 2.5 Keywords node network

Fig. 2.6 Map of the two largest keyword co-citation clusters

V. O. da Silva et al.

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The results show that the theme, compared to international literature, is underdeveloped and underexplored, given the limited number of records published by national and international indexed publishers. There are 42 in total, while Germany, the USA, China, and the Netherlands have more than five hundred each. Additionally, these 42 records have a low citation rate: 14 were never cited; another 14 were cited less than twice (equal to the median of citations); and 10 were below average. However, three have more than one hundred citations, being linked to international discussions on the ET but using Brazil as an analysis subject for a case study. As for the evolution of the theme, there is an initial period with mono and intermittent annual publications (2007–2016). As of 2017, there is a consistent increase in the number of annual publications until 2021, when the annual number of publications intensifies, signaling a growth trend and focus on the theme. These research and publications are conducted mainly through public universities, with resources from public research funds. In the case of the records produced exclusively by SA institutions, and more specifically in Brazil, funding is 100% public and research is conducted mainly in public institutes or universities, with links between them or with foreign institutions, mainly European. Another characteristic is that the surveys are carried out in countries undergoing incisive changes in their energy and power sectors, such as Germany, China, Italy, and the Netherlands. (BP 2014, 2021, 2022; IEA 2020). Perhaps, the need to conduct a rapid and sustainable ET using modern sources and technologies will expand the scope and amount of available funding, arousing the interest of researchers and institutes, given the predictability of research maintenance in the medium and long term. One factor that may have favored the growth of academic production on ET was the Paris Agreements in 2015 (UN 2015) since the increase occurred just after that date. Given the greater importance of climate change in state agendas, the incentive for research on the topic naturally increases. A notable exception is the USA, which was absent from these agreements between 2017 and 2021 (US Department of State 2019) but officially returned in early 2021 after a change in the management of executive power (US Department of State 2021). This demonstrates the importance of joint action between national governments and research institutions to expand knowledge production. As for the authors, of the total of 167, only four are in more than one registry, and of these, two are Brazilian, allocated in Brazilian institutions, and two are foreigners, assigned in European institutions, who research the theme ET addressing Brazil, as a case study. These numbers demonstrate that, although TEB is rarely published in indexed journals, it is explored by more than a hundred Brazilian and foreign researchers, presenting a vast network of collaboration between researchers from institutions in different countries. This network has four clusters, of which only one has research in Brazilian institutions, reaffirming the importance of Brazil as an element of discussion and analysis in the debate on the global ET.

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Final Remarks In order to improve the institutional environment for Brazilian Energy Transition research and strengthen the debate with data and information widely discussed and validated among peers and stakeholders (Udaeta 2012; Galvão 2015; de Bernal 2018), this book chapter points out some recommendations from an academic and public policy scope: ● The focus of publications: There is evident international and national research published in indexed journals. This number is below the number of records linked to other countries. Perhaps, the topic is widely explored by researchers located in Brazil. Still, the lack of standardization and categorization of the theme (e.g., not using keywords such as energy transition in the title, abstract or even as a keyword) may have made the search and access to the published records unfeasible. Relva et al. (2021) faced the same challenge in evaluating ET in developing countries. Another predominant factor may be the difficulty of researchers working in Brazil publishing articles in English or indexed journals. This weakness separates such publications from journal portals, trivially used in bibliographic surveys, making access, appreciation, and citation of these articles by peers difficult; ● Expansion of financing: It is evident that research funding is carried out by public funds, with a focus on science and technology, but, perhaps, access to these resources is scarce, or they are directed to other lines of research in Brazil, although the theme ET is in vogue globally, due to the current reality of climate change linked to the current paradigm of the energy sector—expand access to energy sustainably and cleanly—access to resources—financial and non-financial—and the construction of a multilateral program, which must be grounded and mandatory in all research and public policies aimed at the energy sector. If, on the one hand, this seems to limit, from the point of view of scientific freedom, on the other hand, it can direct and consolidate several fronts of research and development in the countries, and at the same time, it can increase the impact and performance of Brazilian research on the global scenario; ● Formation of new research networks: Brazilian researchers from Brazilian institutes work in an evident network with researchers allocated to the same institution. When there is international cooperation, this is mainly with Western European countries. These cooperation results from partnerships promoted by public funding, from the training of Masters and Doctors in international institutions, implying research related to the use of methodologies, models and solutions developed by European institutions. This network profile limits the debate on the theme since the locational and cultural bias tends to impact and direct the research. In this sense, it is essential to encourage the expansion of research networks with countries in other regions, mainly in Africa and Asia, since most are developing countries—low- and middle-income populations, with restrained demand and technological and regulatory bottlenecks. Among researchers from other regions, joint work allows the exchange of experiences, fosters critical mass and solutions for local problems, and avoids importing methodologies, solutions, and practices

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applied to locations with different socioeconomic and environmental profiles in developing countries. However, it is worth mentioning that existing partnerships must be maintained and expanded while encouraging and building new and various forms of a research network. Acknowledgements All the authors gratefully acknowledge support from SHELL Brazil and São Paulo Research Foundation (FAPESP) through the Research Centre for Greenhouse Gas Innovation (RCGI) (FAPESP Proc. 2014/50279-4 and 2020/15230-5), hosted by the University of São Paulo, and the strategic importance of the support given by ANP through the Research & Development levy regulation. Peyerl thanks the current financial support of grant Process 2017/18208-8, 2018/26388-9, FAPESP. Stefania Relva and Vinícius Silva thank especially Conselho Nacional de Desenvolvimento Científico e Tecnológico, for the scholarship. This work was partially financed by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior.

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Chapter 3

Geopolitical Losses and Gains from the Pathways of the Energy Transition in Brazil André dos Santos Alonso Pereira, Vinicius Oliveira da Silva, Edmilson Moutinho dos Santos, and Drielli Peyerl Abstract The energy transition toward a new reality where fossil fuels are less consumed and renewables become predominating is a tendency for some countries, notably developed ones. As this situation unfolds, the balance of power in energy geopolitics will shift from oil-exporting countries to those with an energy supply system focused on renewables. Amidst this, Brazil faces challenges and dilemmas in its energy sector, particularly on which pathway should follow in this context. This work aims to identify and analyze possible impacts on Brazil’s energy geopolitics, where energy transition toward low carbon should be successful globally. Based on a qualitative approach, energy geopolitics concepts and the creation of scenarios, we discuss the outcomes Brazil’s energy geopolitics might take in a post-carbon world. The results demonstrated that: (i) energy transition sources are not yet in a position to replace or supplant fossil fuels; (ii) fossil fuels will hold sway over energy geopolitics for the foreseeable future; (iii) fossil fuels will continue to be an important component of Brazilian energy planning; and (iv) during the energy transition, Brazil’s main geopolitical benefit will be linked to its power to influence the South American region. In conclusion, the ability of countries to adapt to the new paradigm, in which renewables sources and carbon-free drive technologies have replaced the era of oil and natural gas, will determine their strengths and relevance A. S. A. Pereira (B) · E. M. dos Santos · D. Peyerl Institute of Energy and Environment, University of São Paulo, Av. Professor Luciano Gualberto, N° 1289, São Paulo, Brazil e-mail: [email protected] E. M. dos Santos e-mail: [email protected] D. Peyerl e-mail: [email protected]; [email protected] V. O. da Silva Energy Group of Department of Energy and Electrical Automation Engineering of the Polytechnic School, University of São Paulo (GEPEA/EPUSP), Av. Professor Luciano Gualberto, Travessa 3, N° 158, Prédio da Engenharia Elétrica, São Paulo, Brazil e-mail: [email protected] D. Peyerl University of Amsterdam, Science Park 904, 1098 Amsterdam, Netherlands © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Peyerl et al. (eds.), Energy Transition in Brazil, The Latin American Studies Book Series, https://doi.org/10.1007/978-3-031-21033-4_3

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in energy geopolitics. Concerning Brazil, the four scenarios suggest that the country should not seek short-term profits from the sale of its oil reserves due to the difficulty of entering a market with established powerful sellers. Keywords Energy transition · Geopolitics · Brazil · Hydrocarbons · Renewables

Introduction The present work aims to identify and analyze the possible impacts on Brazil’s energy geopolitics, where energy transition toward low carbon should be successful globally. Previous results in the literature regarding this subject (Overland et al. 2019) discuss which countries would benefit or lose the most in this situation by establishing criteria based on socioeconomic and energy factors. Would Brazil be a winner or a loser in such a scenario? The country has a vast potential for renewable energy. Still, since major discoveries in the offshore oil basin in its maritime territory in the middle 2000s, Brazil has been consolidating as an oil producer and exporter. Those reserves are estimated at around 12 billion barrels (ANP 2020), but a study from Jones and Chaves (2015) claims they could reach 176 billion barrels. In 2018, oil became the second most exported commodity of the country (only behind soy), with exportations worth more than USD 25 billion, mainly to China (Brazil 2019). It could be presumed the country would suffer an economic downturn as oil demand falls in the international market if the low-carbon energy transition should be successful. Although this might be true, Brazil possesses the strengths to deal with this scenario and come out as a winner. It is of the few countries in the world where renewable energy are the majority in its electricity supply mix, particularly hydropower (with more than two-thirds of its output) and biomass (ANP 2020). The last one is also responsible for a useful technology in reducing carbon emissions: cars fueled by a flex engine that runs on both oil-derived gasoline and sugarcane-based ethanol, a most reliable biofuel (Sovacool 2016). Therefore, we can observe that Brazil has a foothold to better capitalize on a less oil-dependent economy but is still interested in high oil demand. As such, Brazil is an exciting case of analysis in energy geopolitics. Some factors indicated the country could benefit from the presumed scenario, but others point to the opposite. For this reason, the discussion brought up in this chapter is synthesized into four scenarios that consider policy-making decisions from the Brazilian government to deal with a post-carbon world and how it affects its energy security. Will energy transition affect Brazilian planning for its energy sector? This book chapter is divided into three sections. The first section presents a brief literature review about the dynamics of energy geopolitics and how it is one of the key elements in the power of nations and companies while focusing on oil as its main driver, energy security and use as a power tool between nations. Then, a context of Brazil’s energy mix is given to contextualize further its strengths and weaknesses and how energies sources are relevant to the country’s infrastructure, logistics, and

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general well-being. At last, a discussion is made to instigate and contribute to a debate on low-carbon energy transition, making Brazil a winner or a loser in energy geopolitics. As a result, we proposed four scenarios, based on methodologies found in other studies (Overland et al. 2019; Muñoz et al. 2015; Brand and Missaoui 2014) and reports from institutions, for example, the International Energy Agency (IEA) and the World Energy Council (IEA 2021b; WEC 2021)

Energy Geopolitics: A Brief Overview The field of energy geopolitics analyzes how energy themes impact national security on a geographic scale and disputes among nations. Its epistemology is historically determined by oil involvement in strategic struggles between countries, and so we focus this section on the influence of oil, whose hegemon has shaped the capitalist economy as no other commodity did in the last 150 years. Scarcity was a constant worry of great nations, motivating long-term strategies to secure continued access to oil in their territory (Conant and Gold 1981). Nevertheless, its decline may be closer than expected, mostly because of the aforementioned energy transition, which in turn will remake the current energy global chain into a new order, with new energy potencies emerging thanks to widespread use of renewable sources, while oil becomes abundant, as new reserves are discovered, and its consumption ceases to increase (Escribano 2021; Valkuchuk et al. 2020).

Energy as a Source of Power and Conflict Since energy is essential to human survival and lifestyle, it has been a cause of war and attrition between civilizations throughout history. Those who controlled the energy sources most frequently held political and military power as well. Therefore, access and control of these energy sources are at the center of many Causus Belli military conflicts, justifications for colonial expansion and crises that caused civil wars (Yergin 2006). This situation escalated after the nineteenth century with the second industrial revolution. Increased demand for energy emerged, since then, on a continuous rise, as countries worldwide enter their different stages of industrialization and urbanization (Balmaceda 2018). During the period mentioned above, oil consolidated as an inductor for the power struggle around energy control and access, especially after naval vessels and military equipment started using oil as their main fuel. For many scholars, the 1st World War and later the 2nd Second World War were essentially a dispute for control over oil reserves, better exemplified by the fronts in the Middle East and treaties after the war, such as the Sykes-Picot agreement (Engdahl 2007). However, energy geopolitics is not restricted to oil, as nuclear power rose to prominence during the Cold War. The

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threat of mutually assured destruction impacted relations between great powers and determined much of its diplomatic direction to avoid further proliferation (Wilson 2019). However, energy geopolitics is not limited to non-renewable sources. Subsidies for biomass sources, such as corn in the USA, are targeted by World Trade Organization penalties due to what is perceived as an unfair commercial practice (Condon 2006). The best modern-day example of conflicts involving renewables is the Egypt-Sudan coalition against the Ethiopian Renaissance Dam’s project, where conflict is brewing among these countries over the control of the Nile river’s flow—essential to supply their population—and to which Ethiopia intends to use for power generation. Its main intention is, not by chance, to reduce its dependence on oil (Chen and Swain 2014). Perhaps the most relevant concept to measure and grasp energy’s role in nation stability is energy security. In simpler terms, the idea summarizes a country’s need and ability to attend to its own energy demand daily, at a continuous flow from its sources (domestic and foreign) and at a small price, so its whole economy is not compromised (Conant and Gold 1981). Based on historical events, Yergin (2006) defines energy security as primordial to national strategy, being one of the main priorities of a country stability and assuring its population well-being. Also, this paradigm highlights how energy geopolitics involves conflicts among nations (Sébille-Lopez 2006). Recently, newer definitions emerged to consider environmental issues, as climate change imposed a threat to all countries’ stability. Thus, energy security nowadays encompasses the notion that economic development, which needs an increase in energy consumption, must be accompanied by environmental sustainability (IEA 2021b).

Oil Hegemon and Slow Decline At the beginning of the 1970s, oil surpassed coal to become the world most consumed energy source (Hinrichs 2014). Even the oil crises from the same period did little to change this scenario. Indeed, before reaching this pinnacle, oil was already dominating energy geopolitics since the second industrial revolution, further amplified with both world wars and the nationalization processes of the fifties and the subsequent formation of the Organization of the Petroleum Exporting Countries (OPEC). Oil has dominated the literature concerning energy geopolitics in the post-war world (Overland et al. 2019). Still, its debate is focused on the asymmetry between producers and consumers countries, economic dependence, the resource curse, and oil as a diplomatic (and literally) weapon (Sébille-Lopez 2006). However, the age of fossil fuels will be remarked, not only from the many wars and conflicts caused but primarily by the environmental impact on a global scale, bringing up climate change. Reports from the Intergovernmental Panel on Climate Change estimated that emissions from the burning and combustion of fossil fuels as one of the main causes of global warming, whose consequences could be drastic

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(Mbow et al. 2017; IPCC 2019). To minimize these effects, multilateral organizations and treaties are establishing goals of zero carbon emissions until 2050 (IEA 2021b). New technologies and an increase in the output from renewables are essential to achieve those ambitious goals (Cash 2018). Nevertheless, oil trends toward keeping relevance for the next decades. Many circumstances explain this, but we must emphasize how energy transitions are a slow-paced process that does not culminate in the extinction of the previous dominant source once it falls from dominance (Sovacool 2016). In fact, oil has yet to reach its peak demand, and after that, its consumption is expected to remain high (EIA 2021). Not every country will be graced with new technologies like electric-moved cars with the same intensity the developed ones will. To many, oil will remain the best energy-efficient commodity and, most of all, the cheapest energy source. Therefore, one must be cautious in projecting its downfall, even with all the sociotechnical changes currently happening.

Energy Transition as a Soft Power Instrument For decades, countries like Germany have highly depended on importing natural gas, mainly from Russia. The two countries do not share a trustful relationship due to what Germany perceives as aggressive interventions from Russia in regions like Crimea and Donbass, both in Ukraine. However, energy security compels Germany to sign treaties and build more pipelines that connect them to Russian reserves, showcasing the power of the so-called gas weapon (Busygina 2017). But, if a decarbonization energy transition process occurs successfully, Germany would gain the upper hand against Russia, altering their current diplomatic relation (Quitzow et al. 2020). As Russia’s invasion on Ukraine unfolded in 2022, Germany and the rest of UE countries applied sanctions against them. Energy transition was already a necessity, now it became a strategic imperative. As Overland et al. (2019) points out, this new scenario will create a situation with countries becoming winners or losers. If we consider the aforementioned RussoGerman relation, it is possible to conclude that Germany would be the winner, whereas Russia would be the loser. Not only that, but this could happen without any coercive means being utilized by either side. Griffiths (2019) argues that energy transition can be used as a soft power tool, much like hydrocarbons have been used by producer’s countries as an strategic instrument. The concept of soft power was conceived by Nye (2004) to describe a nation’s ability to induce other countries to follow its policies without coercion, in other words, without military intervention or economic sanctions, which represents its opposite concept—hard power. Renewables can reshape the main characteristics of energy geopolitics, shifting from conflicts between hydrocarbon exporters and importing countries to a situation where the formers will inevitably suffer significant losses in revenue. This could compromise their abilities to exert power and influence, obligating them to change their economies and adapt their geopolitical ambitions to accommodate a

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new dynamic that would not favor it (Wigell and Vihma 2016). International organizations, like OPEC, might very well have no reason to exist at all, unless they adapt their strategies and promote coordination among their members to better deal with a post-oil world (Van der Graaf 2016). There is speculation among scholars about how energy geopolitics will be once renewables become dominant in the global energy mix. Vakuchulk et al. (2020) point out difficulties in establishing parameters for this kind of analysis but conclude that while renewables may face some challenges like cybersecurity, they can improve the current energy world order thanks to the need for cooperation on environmental issues and mostly due to a tendency of fewer conflicts between nations. This would mean, as Quitzow et al. (2020) defended, that energy transition can become a soft power instrument, reducing the potential of conflict as oil-exporters lose power and influence but implying that more regional integration will be needed as electricity demand rise. Escribano (2021) argue that new emerging sources, like hydrogen, rare earths or even renewables ones such as solar power, will overlap with hydrocarbons as energy transition goes on as the main causes of energy disputes, following historical patterns, until it slowly replaces it. Therefore, a low-carbon energy transition would not alter energy geopolitics disputes among nations. However, its spatial configuration will be remodeled, grids networks replacing pipelines as the main drivers of energy integration. He also warns that while renewables are rising in the global energy mix, oil and natural gas will still have a high demand for decades.

Brazil’s Role in Energy Geopolitics Although major energy geopolitics tensions occur far from Brazil’s territory and regional zone of influence, economic interdependence among nations and international supply chain integration make any country susceptible to any disturbance in the energy world order, including Brazil (Moutinho dos Santos and Peyerl 2019). However, this does not imply that Brazil is a passive actor in energy geopolitics, especially on a regional scale. Moreover, its offshore oil reserves and vast potential in renewables might turn the country into an energy powerhouse with the capacity to self-sustain and export massive quantities of energy sources (Sauer and Rodrigues 2016). To better understand this context, we will briefly describe Brazil’s energy sector, going from its energy supply mix profile to its importance to the country’s bilateral relations, particularly with its regional neighbors, and sum it up with a balance between strongest points and main weaknesses.

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Internal Scenario: The Brazilian Energy Supply Mix Unlike most countries, Brazil possesses a relatively clean energy mix, with renewable making up more than 40% of its total, a goal that several countries want to achieve by 2050 (IEA 2021a). According to Energy Research Company (EPE), in 2019, 83% of electric energy generated in Brazil came from renewable sources, with hydropower being the leader with approximately 63.4% (EPE 2020). Owning the second-largest hydropower structure in the world in generation capacity, the Itaipu Dam (alongside Paraguay), Brazil is an exponent of this source, exploiting its vast hydric potential to reach 260 GW (Eletrobras 2018). When considering all energy supply throughout the country, non-renewables, especially oil, still have a large predominance in its energy supply mix, with 34.4% in total being the biggest one (Table 3.1). Since transportation and logistics mostly depend on trucks, oil derives like diesel and gasoline have huge demand and annual consumption. Brazil consumed more than 130 million m3 of oil-derived fuel in 2020 (ANP 2021). Even though the country has been considered self-sustained in oil production since at least 2006, there is still a need to import some derives (or export crude oil to be processed in refineries abroad and bring back the production). One of the reasons is the lack of investment in refineries and Brazilian oil characteristics, considered too heavy, which explains why even the Pre-Salt offshore reserves did not change that scenario (Gomes 2020). However, thanks to sugarcane-produced ethanol and automobiles engines— known as “flex”—this situation is partly mitigated in automobile transportation, and biofuel also helps to minimize the dependency on diesel for freights. Therefore, Brazil is also an exponent in biomass, being a pioneer in many technologies and advances in this sector (Sovacool 2016). Apart from hydrocarbons and biomass, the energy sector in Brazil has a lot of potentials to be untapped and fully explored yet (see Chap. 13). With low-carbon energy transition looming on the horizon, some will gain more incentive and investment, while others will fall behind. Table 3.1 Brazil energy domestic supply

Energy source

Participation (%)

Petroleum and oil products

34.4

Sugarcane products

18.0

Hydropower

12.4

NG

12.2

Firewood

8.7

Other renewables

7.0

Coal

5.3

Uranium

1.4

Other non-renewables

0.6

Source EPE (2020)

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For instance, coal, an energy source frequently considered to be fading out, has been in relative decline in Brazil, although its southern states still utilize it in industrial activities (Evangelista and Dias 2021), making 5.3% of the country’s total. Nuclear power never really got into full traction in Brazil, with only two power stations built to this day and a third being a long-time project, even with the country possessing prominent uranium reserves (Leite 2014). This table also shows a still relevant use of firewood in Brazil, mostly for cooking in poor areas of rural zones and urban peripheries. This end-use is considered detrimental, as it can provoke respiratory diseases. Besides, it shows socioeconomic inequalities and technological gaps, as its use by the Brazilian population increases when the price of natural gas soars (Gioda 2018). Oil and natural gas are important components of the Brazilian energy matrix, particularly after the nineties. With the recent discoveries in the Pre-Salt layer, internal production increased in the past years, but the country still lacks an adequate infrastructure to deal with this addition (Moutinho dos Santos and Peyerl 2019). Brazil’s energy sector has passed through privatization phases for the past three decades, but state-owned enterprises still have a strategic role (Silva 2020). The biggest one is Petrobras, essential to Brazil’s energy sector and a significant player in the international oil market. Recent governments have been steadily promoting openness to the market, and new legislation, such as the New Gas Market (Law nº 14.134/2021), has been approved by Congress. This aims to amplify the options for consumers, while Petrobras must prioritize oil extraction from offshore reserves (Brazil 2021; Petrobras 2020).

Energy’s Role in Brazil’s International Relations As a commodity exporter country, Brazil surprisingly does not rely much on energy sources exports, unlike its neighbor Venezuela, whose gross domestic product (GDP) has been dominated by the oil industry with more than 90% of all economic activities (Pereira 2019) or even Paraguay, that sells his energy output share from Itaipu to Brazil (Neto 2021). In part, this relates to Brazil’s industrialization process being more evolved than its regional partners. Still, development never reached its full potential since the country remains essentially an agro exporter to more powerful markets like China and the USA, especially soy and iron ore (Brazil 2019). Thanks to Pre-Salt production, Brazil is slowly becoming an oil exporter, reinforcing its status as a primary exporter in the international trade chain. Consequentially, if this export becomes a reliable revenue source for Brazil, combined with practices like sovereign funds, it will be more interconnected for the Brazilian economy (Machado e Silva and Costa 2019). On a regional scale, energy is the main link between a couple of Brazilians’ bilateral relations. First, with Paraguay, Brazil has a tense situation concerning the Itaipu dam, whose ownership is shared between the two. Still, since Paraguay’s half is more than enough to supply itself domestically, the surplus is, by contract, sold to

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Brazil. More than once in the past decades, Paraguayans governments complained about this subject, alleging that Brazil pays less than it should (Neto 2021). In 2006, Bolivia made a similar allegation about its natural gas exports to Brazil, whose main infrastructure was created by Petrobras. This provoked a crisis that eventually was settled with all former Petrobras’s assets in the country being nationalized. However, as natural gas productions rise in Brazil, it is possible to mitigate imports from Bolivia, which might not benefit either of the two since keeping Bolivia as a strategic partner is a long strategic goal of Brazil diplomacy, and Bolivia would lose its main buyer (Pereira 2019). As we can observe, energy has two main roles in Brazil’s trade and diplomatic relations: as a source of income and a tool for attracting its neighbors under its economic and geopolitical influence. This is a small example of Brazil’s main general goal of using its natural resources to carve itself a place among the world’s most powerful and influential nations by projecting its strength from a leadership position in Latin America (Martin 2018; Pereira 2019). So far, it is unclear if the energy transition toward decarbonization can help Brazil achieve those goals. It can be an obstacle to overcome, as dependence on new materials, like lithium from other South American (SA) countries, became more relevant to developed countries’ energy security (Sauer et al. 2015). This would attract major powers and multinational enterprises to compete with Brazil’s state and companies for market shares and regional influence. On the other hand, it could open new opportunities and pathways for regional energy integration by building new corridors and infrastructure based on new technologies for renewables.

Brazil’s Main Geopolitical Assets and Structural Gaps Apart from the offshore oil reserves and its untapped potential in renewables, Brazil has other geopolitical assets to take advantage of energy geopolitics that other countries do not possess. First, it is in a relatively stable region of the world, despite its socioeconomic problems, to be sure. Still, no military conflict per se is going on, like the Syrian and Yemini Civil Wars in the Middle East, which affect major players. A stable country is a factor that attracts investments, and, at least in that regard, Brazil is a safe option. Also, the government has no sanctions due to external policies that threaten other nations, like the Iranian nuclear program. Another strong geopolitical point is its territory, looming over the western South Atlantic region, an important route to oil ships, significantly since oil exportations in African countries located around the Gulf of Guinea have increased in the past decade. Those countries have good commercial and diplomatic relations with Brazil, thanks to international organizations such as G-20 and Petrobras’s regional investments (Ricupero 2017). However, those are in decline due to the current company strategy of de-investment. The last strategic planning of the company, which defines its strategy for 2040, estimated that it could obtain about US$ 26.1 billion by selling

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its downstream’s assets so that it could focus solely on upstream, particularly offshore fields (Pereira et al. 2021). Policymaking and legislation often hamper advances in Brazil’s energy sector, constantly shifting from a more state-centered view to a more open market one but rarely entirely focused on one agenda, which shows how the sector is affected by internal political decisions (Pereira 2019). Some workers’ categories, such as truck drivers, exhibited the great capacity to organize themselves to interfere with the government decision-making process, as they did in 2018 when a nationwide organized strike forced the government to pull back from a fuel price rise. The subsequent crisis even provoked the dismissal of the president of Petrobras (Reis Filho 2021). Besides that, SA as a whole lacks a better-integrated infrastructure to supply all the countries and promote energy integration among them, a long-term goal proposed by SA multilateral institutes, but far from being built on, displaying a fragile local capacity, relying almost on foreign investment. In general, it is believed that SA integration is fundamental to the subcontinent’s independence from foreign powers and socioeconomic development (Martin 2018). Da Silva and da Costa Feres (2021) defends that this could be enabled by Brazilian leadership. Still, regional institutions, like Unasur or Mercosur, which have, in theory, the necessary tools to stimulate this process, have been weakened due to a lack of cooperation and construction of unified objectives, resulting in each SA country prioritizing their own agenda. Arroyo (2010) argues that ideological differences between SA’s executive leaders constantly sabotage any evolution in the integration process, including the energy sector. Could new energy demand from a net-zero carbon emissions world change this landscape? Whatever the answer, it will certainly change Brazil’s energy geopolitics. Unknown yet, it is if this will be a benefice or a hindrance.

Will Brazil Gain or Lose with the Energy Transition? The debate around energy transition has gained momentum in developed countries, as most recent reports from IEA are showing (IEA 2021b). Considered to be an emergent country and not a member of OCDE (as most associate members of IEA usually are), Brazil does not have an official policy regarding energy transition yet, but it does have some guidelines in its “Plano Nacional de Energia 2050” (National Energy Plan 2050), a report from EPE. According to it, energy transition is the main concern of Brazil’s strategy regarding the long planning of the energy sector. Those guidelines are centered on natural gas (that is, considering it an energy transition element), climate change and the electrification process. Also, ethanol-fueled vehicles play a significant role in expanding the use of sugarcane and other biofuels (EPE 2020). So, what defines the scenarios for Brazil? Our criteria aim to explain what aspects constitute positives or negatives views. We emphasize all scenarios, considering that the low-carbon energy transition will be successful until 2050. For the purposes of simplification, we based all assumptions about internal energy demand and energy

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imports and exports to follow the same trajectory stipulated by EPE’s 2050 forecast named “Challenge of Expansion.” This includes the following notions: (1) Brazil will have enough reserves; (2) not necessarily this potential is going to be fully explored; (3) the internal demand is increasing 2.2% per year, meaning internal production or imports must rise to attend it; and (4) energy exports destinies will not be same in destination and volume as in 2020, mainly to China, USA and EU, as those countries certainly will change on their own and new markets could arise. Oil exports and products in Brazil’s energy market are two key elements that shape its current dynamic. But this would change in all hypothetical futures. Overland et al. (2019) created an index that evaluates the gains and losses a country will suffer after a full energy transition process. Their criteria include fossil fuel dependency and reserves, renewable energy sources, governance, and conflicts. These factors cover geographical aspects of energy sources. In most of their scenarios, Brazil is presented as a loser due to large oil production, oil exportation and poor performance on governance. They also considered that fossil fuels might not be fully explored in time to weigh too much on its economy, creating a vacuum for its renewable potential to fulfill. In that case, Brazil emerges as one of the winners, as its lack of geopolitical conflicts and abundant renewable energy sources tips the scale in its favor. As much as we appreciated this ground-breaking work and its main conceptions, it is a general index for many countries, and it is embedded in generalist terms like “developed” and “developing” countries, showing their bias from a northerner perspective. Thus, this chapter aspires to analyze Brazil on its own. The nation has the potential to become a great power (at least on a regional scale for Latin America). So far, however, has failed to surpass its dependency on an agro-exportation economy, which could be considered an indication of resource curse (Jordan 2013). Therefore, we also consider during our analyses if the energy transition can allow Brazil an opportunity to use its energy potential as a soft power tool, persuading its neighbors and southerners countries to follow its lead. Energy security nowadays not only implies attending its energy demand and using energy as a national strategic concern but also emitting as few as possible greenhouse gases (GHG), viewed as a priority for developing countries that provoked the most impact on a global climate scale. A country that reduces its emissions while managing to extract economic benefits through this process will gain leverage and prestige. Therefore, reaching this goal may become a qualifier for a country’s status worldwide, whereas failing to achieve it can have negative diplomatic results.

Possible Scenarios for Brazil Four distinct scenarios are conceived based on methodologies used by international energy agencies (EIA 2021; WEC 2021; IEA 2021b), previous works (Overland et al. 2019; Muñoz et al. 2015; Brand and Missaoui, 2014) and one from Petrobras itself (2018). Two of them are considered positive, and the remaining two are negative. They are named after musical styles (another common practice in defining energy

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Table 3.2 Main criteria of the scenarios Scenarios/criteria

Investments in renewables

Oil and gas development

Energy integration Degree of with SA importance to environmental issues

Bossa Nova

Very high

Moderate

Moderately advances

High

Samba

High

High

Greatly advances

Ideal

Technobrega

Insufficient

High

Slightly advances

Less than ideal

Punk Rock

Very low

Very high

Stagnate

Very low

scenarios) that were formed in Brazil culture, some with influences from its main cultural legacies and foreign styles that made an impact on Brazil’s cultural landscape (while probably showing the personal author preference): Bossa Nova, Samba, Technobrega and Punk Rock. Table 3.2 shows the main scenarios alongside criteria that energy planning in Brazil can prioritize or not for the next decades. We considered how much would be spent on renewables, determining how far its technologies and share of the energy supply mix will expand. Then, we determine how the O&G sector will develop, as a temptation to explore the offshore reserves to their fullest could be stimulated. Energy integration with SA is also considered, stipulating how far this process can advance. Finally, the last criteria is the degree of importance given to environmental issues following global expectations and climate deals. Table 3.3 then lists the outcomes for each scenario, considering strategies that Brazilian governments can make in the next decades to deal with the energy transition and how it will impact Brazil’s energy geopolitics (BEG). Bossa Nova scenario is where Brazil successfully applies specific policies to adapt to the low-carbon energy transition, making its mix much more complex and diverse. This includes incentives for renewables, investment in digitalization and modernization of infrastructure. At the same time, although complex, the system functions smoothly (hence why it is named Bossa Nova, which is the complex style that combines jazz and samba elements), allowing Brazil to secure its energy demand even if it raises considerably. In some hypothetical cases, it could be possible to achieve better results if the demand drops thanks to increases in energy efficiency. For this to come true, at least electric cars must be consolidated. At the same time, the ground for future innovations like hydrogen would already be in motion, meaning that Brazil is keeping pace with the world’s most sociotechnical advanced countries. This would result in reaching lower levels of GHG emissions sooner than 2050. On an international level, it makes the country a beacon for energy sustainability since its usage of fossil fuels is reduced considerably, except natural gas, which will rise if new legislation regarding this hydrocarbon is successful in cementing it as the major component of its energy supply mix. In turn, this means that Brazil would have a shorter window of opportunity to explore and sell abroad its PreSalt reserves until, at best, the decade of 2040, when most analysts believe peak

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Table 3.3 Outcomes in each scenario due to their respective strategies adopted, as shown on Table 3.2, especially its effects on Brazil Energy Geopolitics (BEG) Scenario

Outcome

Strategy adopted

Impacts for BEG

Bossa Nova

Brazil benefits the Diversification of energy most from the energy mix; sovereignty funds for transition oil revenue; adoption of environmental deals and energy efficiency practices; energy integration with SA

More integration with SA; less dependency on imports; self-sustainability in hydrocarbons due to lowers demands; oil exports gradually decrease; energy security stable

Samba

Brazil takes some advantages from the energy transition

Investment in carbon capture and storage, amplification of natural gas market; a consolidation as a reliable oil exporter, usage of renewables is increased thanks to more capital destined for it

Oil and natural gas become relevant to Brazil’s international trade, but its eventual downturn has a small impact due to investments in new sources; a large degree of sovereignty would be preserved; energy security preserved

Tecnobrega

Brazil suffers setbacks from the energy transition

E&P oil sector remains the priority; expenditure on renewables does not rise; logistics and transport still rely too much on oil products

Lack of diversification pulls back investments from majors; newer technologies are restricted to metropolitan areas; energy security is somewhat compromised

Punk Rock

Brazil loses the most due to the energy transition

Oil is no longer needed on a large scale; no official policy is prepared for this; electric grid is not updated; natural gas market fails to accomplish its goals, renewables and low-carbon technologies are not pursued

Main energy assets are sold to obtain some revenue for investments; Brazil is a study case of resource course; energy rationing is frequent; carbon emission remains high, making the country a diplomatic pariah; energy security is precarious

oil demand will occur. Sovereignty funds, which Brazil’s already created, can help generate enough funds for those strategies while also helping the country overcome its socioeconomic inequities, reaching the main objective they were created for it. Finally, although admittedly too optimistic, this scenario may create the conditions to grant Brazil enough soft power to lead an energy integration in SA, helping with regional geopolitics ambitions. Samba scenario is where Brazil finds its own path, based on its experience with renewables, exploring new sources like solar and wind to a deeper degree (as in the previous scenario), maintaining and expanding its energy mix grip on renewables dominance. Fossil fuels still have a high demand due to Brazil’s logistics reliance

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on roads and trucks, but biofuels and NG advances can minimize this. Eventually, electric cars will flood Brazil’s market and maybe with local companies’ production. Still, this technology will have a slow start in a market dominated by traditional internal combustion vehicles. New legislation must pass in the following decades to make this possible, as well as economic incentives for its implementation. Then, net-zero goals could still be achievable by 2050, meaning that in this scenario Brazil could fit with the multilateral agenda. Here, Brazil impacts less on the broader international arena and focuses more on domestic policy and traditional SA allies, mainly Mercosur associates Argentine, Paraguay, and Uruguay. Bolivia would probably keep a close relation with Brazil thanks to their bilateral commerce. In this scenario, Brazil can help its closest trade partners use their resources to promote industrialization and economic diversification (like lithium reserves promoting electric car batteries and other industrial end-uses for NG). But this would also mean that hydrocarbon investments are necessary since they are essential to SA countries’ economies. Further integration with other regional countries does not evolve as Brazil does not develop a bigger soft power. They pursue their own agenda with the help of OCDE countries and China. Oil from the Pre-Salt is still expected to be exported in large quantities, but this is achieved while respecting multilateral agreements such as the Paris Agreement, even at the expense of not selling as much hydrocarbon as desirable. Common strategies should take place on those two positive outcomes: a greater diversification of its energy mix and pushing forward sources that make the least environmental impact. In turn, this should enable the country to reduce GHC emissions and preserve its ecosystems. Combining this with fulfilling its demand with guarantees energy security, this is an essential step toward becoming a bigger player on the world’s geopolitical stage. This means less fragility to decisions from major energy geopolitics players like Saudi Arabia and Russia and the autonomy to pursue an independent path as much as possible. Also, in both scenarios, the governance aspect is relatively stable and predictable, not causing major interferences, although some policies will probably cause internal controversies. Our first negative outcome scenario, named Tecnobrega (that mix local and regional styles with synthesized sounds and eletronic music), is where Brazil does not adopt new strategies and policies related to renewables and low-carbon technologies. Tempted by short-term oil profits, offshore upstream is the area with more investments and international attraction until it fades away as global oil demand plunges. Renewables and other technologies still receive some investments, but since hydrocarbons had taken a bigger share, those would be insufficient to proper modernize Brazil’s energy sector. In turn, due to a lack of preservation of its falling national industrial sector, the urging for imports of manufactured products, like electric car batteries, will keep on rising. Since they have a bigger aggregated value, Brazil’ economic balance suffers a negative downturn. Then, Brazil vast oil reserves could become a stranded asset. As the national economy becomes more fragile, so does Brazil influence over the rest of SA, which then becomes an area of dispute among global powers interested in securing more resources for themselves. Rare-earth minerals, like lithium, have big

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reserves in Bolivia, Chile and Argentine. Although it may sound far-fetched, this area could become relevant to the emerging energy geopolitics as the Persian Gulf is current due to its hydrocarbon reserves. The Tecnobrega scenario still can have alarming consequences for the energy sector, as the Brazilian’ state and companies would lack the capacity to properly manage the resources, opening too much for major enterprises. While those could generate an internal market with better options and prices for consumers, this would compromise Brazil’s energy security and ability to use energy as a strategic tool. It means no influence on other SA nations and probably no further advances in energy integration of the subcontinent. Some metropolitan areas, like São Paulo, might be integrated with new technical advances, like electric cars replacing oil-fueled ones, reshaping their sociotechnic landscape. However, there is no certainty that it would become widespread equally throughout the territory in the short and medium term, enhancing Brazil’s spatial and socioeconomic inequalities even more. The last scenario is named Punk Rock. Here, Brazil fails on its own due to a lack of vision and insistence on dated policies, making the international market view the country as a non-viable option for investment, thus causing economic ruin if local companies and the state do not manage to produce long-term benefits. Constant interference from the government in management issues for populist purposes, like fuel prices, may even jeopardize national companies’ plans to invest in it. Thus, Brazil’s state planning would require more focus on preserving the current energy mix to sustain its energy demand, lacking the necessary investments to improve energy efficiency from renewables. The investments, both from the public and private sectors, would diminish, but proportionally, the oil and gas sector receive more investment as they are the more developed ones. Therefore, the energy transition itself in Brazil would lag behind the rest of the world, at least from the most powerful nations and major emerging countries. In this case, Brazil is more dependent on fossil fuels and hydropower than others. In this regard, no technological update of its electrical grid (which is still not fully territorially integrated) could mean more energy blackouts and rationing. Brazil would then be considered an international pariah, failing to achieve global goals of net-zero GHC emissions by 2050. The possibility of Brazil being military invaded if the burning of the amazon rainforest is not stopped seems far-fetched at this moment, but on in the future could be used as a justification (Walt 2019). This also came at the price of Brazil having no soft power in SA, which will, in turn, pursue other partners for guidance and assistance in adapting to decarbonizing energy transition new reality.

What Will Be the Next Scenario? Those scenarios might paint a picture too optimistic or too negative. Usually, the most likely outcome is going to be something in between. As much as a successful decarbonizing energy transition is desirable to happen in the next few decades, that process still has a long and winding road ahead. Even countries associated with

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clean energies will still have some degree of dependence on fossil fuels. For a more realistic view of the future, one must analyze what Brazil expects for its energy sector. So, we look back again on the EPE’s report (EPE 2020). Although energy transition is an important concept explored in most sections, in our interpretation, it seems that much is needed to be done to prepare the ground for catalyzing the process. Domestic energy demand and exports are both expected to increase, and energy transition sources are not yet able to replace or overlap with fossil fuels. Speaking of them, fossil fuels will remain a major component of Brazil’s strategic planning, in large parts, thanks to the offshore oil reserves. In that regard, the document considers two possibilities that differ in how much oil will be produced and sold abroad, the first called “stagnation” and the second “challenge of expansion.” The latter is the one that predicts more output, both economic and energetic, from hydrocarbons. However, even in the scenario when the production stagnates after 2030, its output will still be high. Pre-Salt oils also attract investment from major oil companies, even those with a long-term focus on energy transition, like Equinor (Pickl 2019). Consequently, fossil fuels remain relevant and are keeping dominance over energy geopolitics for the foreseeable future. Reports and overviews reached similar conclusions, claiming that despite the future belonging to non-renewables, hydrocarbons’ consumption shall increase in quantity, even if it proportionally decreases. Petrobras projected scenarios include one called “cardume,” which expects that natural gas will take a leading role, as its causes less environmental impact than coal and petroleum, meaning it can help with mitigation of global warming while dealing with a bigger global energy demand, as it argues that an acceleration of renewables would mean a slower economic growth from developing nations (Petrobras 2018). However, the main question remains: Will Brazil gain or lose with the energy transition? Brazil faces a dilemma surrounding the energy transition process headon, embracing its new technologies and respecting climate goals or slowing it down as much as possible to extract short-term rewards from oil exploration? At first glance, those goals seem contradictory, and even our scenarios deal with their problems. But it is necessary to embrace both trajectories because in doing so, a principle of energy security is respected: diversification. Brazil had done this previously in the past when it was more dependable on oil imports and promoted solutions like biofuels. Offshore oil reserves modified this to an extent, as it opened the possibility of turning into a main oil producer and exporter. For some time, this became an internal obsession, as nationalist views on energy issues conceived those reserves as a golden ticket. However, international energy conjecture compels for another approach, and the literature indicates that this notion is not only obsolete but prejudicial (Jordan 2013; Machado e Silva and Costa 2019). At this point, Brazil is indeed an established oil seller, with its main partners being China, the USA, European Union and, to a lesser degree, countries from Mercosur, mainly Argentina (MME Brasil, 2019). Therefore, its geopolitical path lies within these groups of nations’ objectives for the energy transition. China is now the main consumer of oil, its state-owned oil companies purchasing as many fields as possible, securing sources from around the globe. Certainly, it’s the better

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consumer for Brazil, with its growing demand, and Brazil can easily be a reliable source for the Chinese. However, they are investing in energy transition technologies to reduce their dependency on imports in the long term (Dong et al. 2021). When China eventually demands less oil from Brazil, the effects will shake its economy to its core (Pereira, 2020). Initially, it was expected from Petrobras that the USA would be the main consumer of Brazil’s oil (Pereira 2019). But the shale revolution in the past decade has turned the former hyper-dependant oil importer USA into an energy powerhouse, capable of almost self-sustaining its own gargantuan market and even projecting energy exports, like GNL to the European Union—a tactic that cripples its rival Russia (Bordoff and Houser 2014). The EU is emerging as leading the low-carbon economy agenda, passing legislation, and proposing the most ambitious goals, whereas the USA struggles with bipartisan politics, and China must guarantee its rising demand (Losekann and Tavares 2019). While these two titans may use coercion to achieve their geopolitical objectives, the EU will probably use energy transition as a soft power instrument. Thus, Brazil’s main geopolitical benefit can play on the geographic space, and it can exert the most impact and influence in SA. Even though it is possible to sell oil to other SA countries, some of them which have greater reserves than Brazil, that would require other bilateral relations that goes beyond the simple exchange of commodities, but to deep ties that can reshape those countries’ industries and society, helping them escaping the route that leads into resource course and subjugation to stronger global powers. With its end-uses for electrification and replacement of other fossil fuels, natural gas could be the main driver that will help Brazil lead the way through the energy transition. Then, we can gradually adapt to future realities. The energy transition is inevitable, and it will happen sooner or later. If the right policies and strategies are to be chosen, Brazil can enjoy a more successful outcome than most nations, but the opposite could also be true as easily.

Conclusion The present chapter brought an overview of how geopolitics is involved in energy issues. This tendency will remain even when renewable sources and carbon-free drive technologies take over from the current oil and NG age. As this transition happens and energy geopolitics changes, countries’ capacity to adapt to this new paradigm will determine their strength and relevance in energy geopolitics. Brazil, a nation that aspires to use its energy potential to adjust and take advantage of this new energy order, can either win or lose in a hypothetical future where energy transition is successful until 2050, a year used as a common target for environmental goals. By making four different scenarios, we concluded that Brazil must not fall into the temptation of seeking short-term profits from its oil reserves, as not only this a difficult market with other powerful sellers consolidated, but it would eventually lose its current relevance in all scenarios. Bossa Nova and Samba scenarios demonstrated

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that the development of renewables, careful usage of oil potential and investments in diversification are essential to the country’s energy security. A nation with a long history of commodity exportation as the main driver of its economy, Brazil’s energy potential should be used to reverse this pattern. Sovereignty and development are essential to be more than a nation with vast natural resources that powerful nations seek to take advantage of, while Brazil fails to promote its power projection abroad, even in neighbor partners. No change in this policy could lead to a similar situation to our Technobrega and Punk Rock scenarios. The subjects and themes discussed here are still fresh in academic debate, especially in Brazil. Energy geopolitics is normally focused on oil and natural gas, and a methodological and epistemological expansion is very much needed in Brazilian studies from different fields of expertise. We hope this can contribute to the emerging discussion. Acknowledgements All the authors gratefully acknowledge support from SHELL Brazil and São Paulo Research Foundation (FAPESP) through the Research Centre for Greenhouse Gas Innovation (RCGI) (FAPESP Proc. 2014/50279-4 and 2020/15230-5), hosted by the University of São Paulo, and the strategic importance of the support given by ANP through the Research & Development levy regulation. André dos Santos Alonso Pereira thank especially Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (Capes) for the scholarship. Vinícius Silva thank especially Conselho Nacional de Desenvolvimento Científico e Tecnológico(CNPq), for the scholarship. Peyerl thanks the current financial support of grant Process 2017/18208-8, 2018/26388-9, FAPESP. This work was partially financed by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior.

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Chapter 4

Democracy and Energy Justice: A Look at the Brazilian Electricity Sector Alex Azevedo dos Santos, Rodolfo Pereira Medeiros, Milena Megrè, and Drielli Peyerl

Abstract Faced with the debate around energy transition, concepts have emerged that aim to combine justice and democracy with energy innovation. The concepts of energy democracy and energy justice are examples of these efforts. Although it is considered a global issue, the production of such topics is still centred in Europe and North America. Seeking to broaden the approach, this chapter addressed examples from the Brazilian electricity sector. Among the reasons for choosing, it to be analysed, we considered that this sector is based on hydroelectricity and more sustainable than the world average; however, it is loaded with social imbalances and socio-environmental problems. Thus, the chapter reflected these concepts on Brazilian hydroelectric plants, the access and cost of electricity for the population, and exemplified by a recent blackout in the Amazon region. It was observed that the construction models of these hydroelectric plants are rooted in the history of a lack of low social responsibility in the use and occupation of space. The populations of the Amazon states have suffered the impacts over time. The high costs, difficult access, and the quality of electricity service have challenging to provide electricity for all. Keywords Energy democracy · Energy justice · Energy transition · Electricity sector · Brazil A. Azevedo dos Santos (B) · R. Pereira Medeiros · M. Megrè · D. Peyerl Institute of Energy and Environment, University of São Paulo, Av. Professor Luciano Gualberto, N° 1289, São Paulo, Brazil e-mail: [email protected] R. Pereira Medeiros e-mail: [email protected] M. Megrè e-mail: [email protected] D. Peyerl e-mail: [email protected]; [email protected] D. Peyerl University of Amsterdam, Science Park 904, 1098 Amsterdam, Netherlands © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Peyerl et al. (eds.), Energy Transition in Brazil, The Latin American Studies Book Series, https://doi.org/10.1007/978-3-031-21033-4_4

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Introduction Energy democracy is a recent concept and an emergent social movement that links social justice and equity with energy innovation, connecting energy infrastructural changes with the possibility of deep political, economic, and social change (Burke and Stephens 2017). This concept still does not have a consensual definition. Still, it is commonly used in analyses and reflections about energy transition and who controls the means of production and consumption of energy (Jenkins 2019). Since 2010, the term has become more widespread, having started as a slogan used by activists that demanded more significant participation in energy-related decisionmaking and has been incorporated into policy documents and academic literature on energy governance and energy transitions (Szulecki and Overland 2020). The several interpretations of the term are justified by fragmented literature, constructed by an interdisciplinary and eclectic team of scientists, such as human geographers, sustainability and legal scholars, and political scientists, which do energy-related research often focused on the national or local community level, resulting in crucial differences in experience and outlook (Chilvers and Pallett 2018). The rise of this issue is associated with the intensification of climate change, whose energy sector is historically the leading emitter of greenhouse gasses (Burke and Stephens 2017; Pedersen et al, 2021). It is known that there are vulnerable populations that tend to suffer more from climate change, subject to extreme events that can trigger major population collapses (IPCC 2014). Consequently, the need to decarbonise the energy system to renewable sources has become one of the central themes for science, policy, and public discourse worldwide (Araújo 2014; Markard et al. 2012). As fossil fuels still are at the world’s economic centrality, assessing how the decline in their dependence will unfold is among the most contested areas of policy in the coming decades (IEA 2021a; Boyer 2014; Arent et al. 2017; Stirling 2014). With the necessary energy transition to renewable energy sources being a fundamental political struggle, efforts to decarbonise these infrastructures will not be effective without confronting and destabilising the dominant energy power systems (Burke and Stephens 2018). In this way, an effort that energy democracy advocates intend is to inspire a reconfiguration of energy politics, realising opportunities for this restructuring of socio-technical regimes (Miller et al. 2013). Through a set of theoretical principles, this movement seeks to create opportunities for destabilising power relations, reversing the established context of social and environmental injustices of dispossessed and marginalised people and replacing monopolised fossil fuel energy systems with democratic and renewable structures (Angel 2016; Farrell 2016; Burke and Stephens, 2017). These principles are also very present in the concept of energy justice, which is a term often used in conjunction with the idea of energy democracy (Jenkins 2019). These concepts have a similar genesis, emerging amid growing interest in the fairness implications of energy consumption and the social impacts of energy

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(Hall et al. 2013). Evolving from activist literature on the environment, society, and climate, energy justice transposes principles of social justice to the energy sector, aiming for energy to be provided to all individuals, in all areas, in a safe, accessible, and sustainable way (Mccauley et al. 2013; Jenkins 2019). Based on that, the objective of this book chapter is to seek historical and current themes in the Brazilian electricity sector, which are directly associated with the aforementioned social approaches. The study begins by reflecting on the main topics addressed in energy democracy in the scientific literature. The related concept of energy justice was also worked on, aiming to expand the analysis of the Brazilian cases that will be presented later. Then, contextualisation of the theme in Brazil is made, and a local theoretical deepening is sought through 3 current themes: (i) the controversies surrounding hydroelectric plants, (ii) access and cost of electricity in Brazil, and (iii) the blackout in the state of Amapá in 2021, in the Brazilian Amazon region.

An Introduction About the Concept of Energy Democracy and Related Terms As already mentioned, the concept of energy democracy is relatively recent and presents vast different interpretations. Some authors consider it a positive side as it allows the concept to flow between scales, adhering to the local context and shaping its own contours, making it possible to define a coherent agenda of actions for specific cases (Pesch 2019; Creamer et al. 2018; Van Veelen 2018). For other authors, this dynamism is not positive since the lack of a shared standard understanding prevents a common agenda from being proposed between countries and institutions, considering the challenge of the energy transition as a common theme for all, where well-defined objectives, goals and indicators are needed (Delina 2018; Sørensen and Torfing 2005). A survey carried out by Szulecki and Overland (2020) showed that the issue of energy democracy is still recent and restricted to the academic world and that there is a great predominance of productions originating from European and North American institutions. However, although publications from these regions dominate, the study found a clear conceptual division on the subject between these centres of scientific production, in addition to the low research and production by the other continents (Szulecki and Overland 2020), that is, the research on this topic is carried about mostly by Western developed nations, whereas the developing and underdeveloped nations have had little involvement in this debate. In Europe, the concept is mostly related to the political system within the Green Parties, and public policies with support from the private sector to meet the demands related to the energy transition, whether they are infrastructure or financial demands (Burke and Stephens 2017). In North America, it indicates the action of social movements and complete autonomy of communities of users and producers of their own energy projects regarding the state or companies (Burke and Stephens 2018).

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Although with different types of action, these approaches that add social aspects to energy infrastructure essentially face the dilemma of balancing urgency versus justice (Kumar et al. 2021). For this, it is necessary to combine: (i) rapid transitions to cleaner forms of energy; (ii) mitigation of greenhouse gas emissions; and iii. a rapid energy access expansion and progress in human life, aiming at development, poverty reduction, improvement of the quality of life, gender, and race equality (Kumar et al. 2021). Given these objectives of an urgent and fair energy transition, this chapter delves into examples from the Brazilian electricity sector to elaborate on specific local difficulties, seeking a counterpoint to most publications focused on the global north. Based on hydroelectric generation, the Brazilian electricity matrix is substantially composed of cleaner sources than the world average, with 83% renewable and 17% non-renewable. In comparison, the world electricity matrix is made up of 27% renewable and 73% non-renewable (EPE 2020). Thus, unlike most of the world’s nations, Brazil’s energy sector is not the leading emitter of greenhouse gasses. The main climate challenges are forest deforestation and land use, such as agriculture activities (SEEG 2021). Despite the promising data, the objective of this chapter is to reflect, within this social approach associated with the energy issue and in the terms put by Kumar et al. (2021), on the gaps in the Brazilian electricity sector concerning democracy and energy justice. Therefore, it is necessary to contextualise the concept of energy justice, closely associated with the present issues and the examples that will be detailed.

Understanding the Concept of Energy Justice Energy justice is a concept that has well-defined limits in the literature and has been extensively explored in publications. According to Sovacool and Dworkin (2015, 2), energy justice is “a global energy system that fairly disseminates both the benefits and costs of energy services and which has representativeness and impartiality in energy decision-making”. Analytically, it presupposes a deepening of the vision of energy systems, planning and uses, bringing ethical, moral and equity issues to the debate, which are not explicit in our daily lives, or the reports presented. It touches on values and seeks to answer more complex questions and problems that are not easily solved (Sovacool and Dworkin, 2015). The most common principles used within energy justice as a decision-making tool within energy processes are availability, accessibility, due process, good governance, prudence, intergenerational and intragenerational equity and accountability (Sovacool and Dworkin 2015). Its contribution aims to hold actors accountable for the responsibilities related to problems in the energy area, whether related to enterprises, political groups, countries, or even their own practices that are incoherent and support such institutions or individuals (Heffron 2022). Perceptions about such aspects can

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shape new personal behaviours, investment decisions, and trust (or mistrust) in energy information and institutions (Sovacool 2016). Heffron (2022) pointed out that the concept of energy justice must be at the centre of the debate on energy transitions to have positive consequences for society. Focusing on the processes already underway worldwide, the author shows surprise at how the energy sector, one of the main ones responsible for environmental and climate change problems, remains unexplored in the context of fair results for society (Heffron 2022). Seeking to reflect and point out examples that may be unfair or conducted in an undemocratic way in the Brazilian energy sector, we address in the following pages some cases that run through its entire chain: production, transmission, distribution, and consumption. In this sense, we highlight the consequences of some events, try to locate those responsible, indicate inequalities in treatment and care, and reflect on the sustainability of our energy supply mix and the high values of tariffs imposed on the entire population. These clippings aim to highlight Brazil’s social vulnerabilities and contrast them with the electricity sector.

Democracy and Electricity in Brazil The Brazilian experience with democracy before promulgating the current Federal Constitution of 1988 was brief and troubling (Codato 2005). The interests of the dominant classes in society have always been at the forefront of electoral processes and, in one way or another, have given rise to ruptures and coups (Fernandes 2019). In short, Brazil follows the trend of most countries in the global South, which have democratic fragility with hybrid, authoritarian and imperfect political systems (EIU—Democracy Index 2020). Before the 1988 re-democratisation process, the last regime was a military dictatorship that lasted 21 years (Avritzer 2018). Therefore, democracy is still recent in the country, and, despite having a democratic political regime with open elections and consolidated institutions, its past and history still give it the characteristics of a country with extreme socio-economic inequality with many agrarian and urban conflicts; racial and gender violence (Avritzer 2018; Cerqueira 2021; Global Wealth Report 2021). During this dictatorship period, Brazil underwent a profound energy matrix diversification (Freitas 2013). It was necessary to reconcile the high energy demand due to growing industrialisation with the oil crises of 1973 and 1979 that shook the world’s energy systems, forcing the entry of new sources (Oliveira 2018). Thus, in addition to encouraging local energy sources, such as sugarcane alcohol, 5 of the 10 largest hydroelectric plants in Brazil emerged during the military dictatorship period (de Cerqueira Leite and Leal 2007, ANEEL n.d.). Although these hydroelectric plants play a crucial role in a renewable Brazilian electricity matrix, the construction and operation processes have left immeasurable and irreversible social and environmental damages, showing errors and negligence of the projects,

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such as the failure and neglect to encourage public participation and evaluate impacts (de Queiroz and Motta-Veiga 2012). Therefore, analysing the concept of energy democracy in the Brazilian reality and all the complexity that permeates its recent and fragile democracy may be able to reveal inequalities, authoritarianism, negligence, injustices, and other issues within the energy processes seen as normative or usual (Bermann 2002). For this reason, the next section of this chapter reflects, through examples, the socio-environmental damage of hydroelectric plants, questioning the sustainability of the Brazilian electricity matrix beyond the data.

Is the Brazilian Electrical Supply Mix Sustainable? Although Brazil occupies a peripheral position in the world economy, it was one of the first countries to adopt the use of electricity since the end of the nineteenth century, taking advantage of technological partnerships with the USA and Europe (Oliveira 2018). At the same time, making the most of abundant natural resources such as wood and water, Brazil quickly adopted hydroelectric generation (Oliveira 2018). In 1920, 88.4% of the country’s electricity came from small hydroelectric plants (Saes 2009). This generation served a consumption that was still incipient, based on public lighting and some large urban centres (de Niemeyer Lamarão 2012). The first large expansions of hydroelectric plants in Brazil are directly associated with anti-democratic periods (Oliveira 2018). It was during Getúlio Vargas’ government (1930–1945 and 1950–1954), which ruled the country for 18 years (8 years in the dictatorial period), that regulatory, technical, legal, and research advances for large water dams were created (Corrêa 2005). This governmental organisation was used in the decades following the Vargas government, and there was an acceleration in the construction of dams and hydroelectric plants (Corrêa 2005). However, during the dictatorship period (1964–1985), a particular focus was given to the construction of large hydroelectric dams, which reached great levels of expansion (Moretto et al. 2012). During this period, 61 large hydroelectric plants were constructed that increased the installed capacity of this source by almost 800% (Oliveira 2018). This increase in demand was fundamental to meeting Brazil’s growing industrialisation period and provided access to a residential electrification jump from 45% in 1970 to 75% in 1985 (Oliveira 2018). This expansion was not greater, possibly due to the growth of the environmental issue from the mid-1970s (Moretto et al. 2012). This new approach generated the first environmental laws in the country, and the disclosure of the socio-environmental damages of Brazilian dams limited international funding for new projects (Oliveira 2018; Moretto et al. 2012). Cases such as the construction of the Tucuruí and Balbina hydroelectric plants had little responsibility in the use and occupation of space. These cases were notorious in the first major environmental crisis in the electricity sector and directly favoured creating environmental policy instruments (Moretto et al. 2012).

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In summary, the Tucuruí plant, in northern Brazil, started construction in 1975, after technical and economic feasibility studies, and would only have the first survey of socio-environmental changes in 1977, with the works in progress (de Queiroz and Motta-Veiga 2012). This construction generated a total flooded area of 3513 km2 , which was twice as much as predicted in the feasibility studies and generated enormous impacts and conflicts (La Rovere and Mendes 2000). Consequently, the rural and indigenous exodus was significant in several cities, and the lifestyle of populations based on fishing or rural and extractive activities was extinct or largely affected by floods and the dams construction (La Rovere and Mendes 2000). Vulnerable urban regions collapsed with the immigration movement, and the indemnification processes for those directly involved became protracted legal battles (de Queiroz and Motta-Veiga 2012). The Balbina plant, built in the same period as Tucuruí and also in the Amazon region, drew attention due to similar impacts due to the flooding of approximately 2500 km2 (Moretto et al. 2012). The Balbina dam is still the 3rd largest in the country; however, its installed generation capacity is low in proportion to the reservoir, being less than 3% of the installed capacity of Tucuruí, for example (Fearnside 2001, ANEEL s.d.). Inspired by the social movements that started in the 1970s, which questioned the consequences of the economic development model for the population, the citizens impacted by the Tucuruí, and especially Balbina hydroelectric dams, organised claim agendas aiming to remain in their territory or some cases just compensation for the flooded lands (Fearnside 2001; Santos 2004). Thus, the combination of popular pressure, the tightening of environmental laws and low foreign funding for these infrastructures slowed down the planning of new hydroelectric plants in the 1980s and 1990s (Gonçalves 2009). These projects resurfaced in 2000, mainly due to the favourable international economic environment (Gonçalves 2009). This time, at least at the project level, greater social and environmental responsibility was sought in the spatial planning of hydroelectric plants, especially in regions with high socio-environmental sensitivity (Moretto et al. 2012). However, as long as the potential water resources close to consumption centres were exhausted, the country has been expanding its electricity grid limits (Corrêa Da Silva et al. 2016. Thus, the Amazon territory has been considered the last remaining region for constructing hydroelectric dams in Brazil (Moretto et al. 2012). Despite this environmental reorientation, recent constructions call into question the effectiveness of these plans (do Amaral Mello 2013). The most recent and emblematic of these new projects is the Belo Monte dam (Fainguelernt 2016), which was designed with the highest installed capacity among all Brazilian hydroelectric plants. Belo Monte underwent a complex process, both because of its enormous socioenvironmental damage and the high costs, which increased considerably during the construction period (de Pontes and do Carvalho 2020). The plant has had severe socio-environmental impacts, such as the removal of traditional and riverside communities, the flooding of large regions, and changing the dynamics of rivers (De Oliveira 2020). In addition to socio-environmental tragedies, Belo Monte was considered a financial and energy failure, and in situations of water

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scarcity during drought periods, it delivered 0.5% of the promised energy (de Pontes and do Carvalho 2020). Although Amazon’s traditional populations, such as indigenous people and caiçaras carry an immense amount of traditional local knowledge, they are often disregarded in the planning and decision-making process (Doria et al. 2017; Athayde 2014). Thus, in the recent cases of Belo Monte, Santo Antônio and Jirau dams, as in the old cases of Tucuruí and Balbina, seeking space in governance, various indigenous communities and social movements formed alliances that strengthened resistance against these projects (Mccormick 2006; Walker and Simmons 2018). These populations developed community consultation protocols, initiating a selfregulation movement through the International Labor Organization’s Indigenous and Tribal Peoples Convention, which determines the right to prior consultation for Indigenous people and traditional populations in projects, policies or activities that may affect their territories and/or livelihoods (Garzón et al. 2016; De Oliveira 2018). Such cases highlight a peculiarity of the Brazilian context, pointing out the inclusion of indigenous communities as a fundamental aspect to be considered when speaking of energy democracy for the country. These manifestations, which were also reflected in other forms, such as the occupation of the Belo Monte construction site by indigenous populations, mainly Mundurukus, had as a premise seeking a voice in governance to take a stand against the construction of dams and hydroelectric dams in the Amazon rivers (De Oliveira 2018). In addition to the destruction of livelihoods and sacred sites for indigenous and native people, the history of hydroelectric dams in local Brazilian populations involves harm to human health through reduced water and sanitation quality, changes in medical services, psychological impacts, displacement, changes in lifestyles, and food security (de Queiroz and Motta-Veiga 2012; Gauthier and Moran 2018; Athayde et al. 2019). The increase in the flow of people and workers to the dam sites also raises other central issues, such as the increase in violence, sexually transmitted diseases, and drug trafficking (Doria et al. 2017; Athayde et al. 2019). In the new Amazon dams of Jirau, Santo Antônio and Belo Monte, not even the promise of more jobs was met, as a recent study showed that promised jobs disappear in approximately five years (Moran et al. 2018; de Oliveira 2018; Athayde et al. 2019). This is in line with the conclusions of other Brazilian studies on hydroelectric plants, which show that economic growth is temporary and only occurs during the construction phase (Moran et al. 2018). It is also already identifiable that this economic growth usually does not generate improvements in other social development indicators, such as social inequality, child labour, basic sanitation, and education (de Faria et al. 2017). Despite these huge local impacts and failures in hydroelectric generation plans, Brazil still plans to build several plants following the same processes and methods utilised before (EPE 2020). There are at least three new large hydroelectric plants planned for the Amazon region, which would still require large transmission lines, possibly on indigenous lands in conservation areas (Ferrante and Fearnside 2019).

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Some projects planned are in neighbouring countries, whose construction would be Brazilian, and the energy would be exported directly to the country (EPE 2020; Ferrante and Fearnside 2019). And since the focus of these projects is the export of energy to the regions with the highest consumption, such as the South and Southeast of Brazil, it is crucial in terms of justice and energy democracy that the populations of the northern states do not even experience improvements in the supply of electricity (Fainguelernt 2016). Thus, the next section of this chapter discusses issues of access and cost of electricity in Brazil.

Access and Electricity Cost in Brazil In 2015, during the Paris Conference (COP21), countries pledged to take action against climate change by presenting individual mitigation strategies known as National Determined Contributions (NDCs), which put pressure on all nations to review their energy policies and gradually transition to more sustainable practices (United Nations 2015). The 17 Sustainable Development Goals (SDGs) were also created and included in the Agenda 2030. As access and cost are fundamental issues for energy justice and democracy, in these goals, special attention was given to energy-related issues, such as SDG 7, whose mission statement is, according to the United Nations (2015), ensure access to affordable, reliable, sustainable, and modern energy for all (van Veelen and van der Horst 2018; United Nations 2015). According to Brazilian data from Agenda 2030, the country has 99.8% of the population with access to electricity, and it pledges to electrify the rest (42 thousand people) by 2030 (IBGE 2019). However, there are controversies about this data since the approach is based on formal residences, with other studies with different data (IBGE 2019; IEMA 2019). In a recent survey covering indigenous populations, quilombolas and settlers, it was concluded that only in the northern region of the country (Amazon region), there are one million people without access to electricity (IEMA 2019). Although Brazil has made several governmental efforts to bring electricity to remote populations, it was from the efforts of the Luz para todos (Light for All) program that significant advances occurred in the country (Luís Ferreira and Barcellos Silva 2021). The program started in 2003 with directed public policies aimed at anticipating the universalisation of access in households and rural establishments, which, under market conditions, would be in last place in the universalisation plans (Leal and Alva 2021). The original goal of making two million connections was met in 2009, however, as there were still many families without electricity, the program was continued (Luís Ferreira and Barcellos Silva 2021). Prior to the introduction of Luz para Todos in 2003, household electricity coverage was 93% (urban and rural), with 97% access in urban areas and 70% in rural areas (IBGE 2002).

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As already mentioned, the country’s main challenge for electrification is the legal Amazon region (IEMA 2019). In this manner, to address the last mile of Brazil’s electrification effort, in 2020, the Brazilian government launched the National Program for Universal Access to Electricity in the Legal Amazon region, known as the “more light for the Amazon” program (MLA), whose goal is to promote access to electricity for the Brazilian population located in remote regions of the Legal Amazon states (Luís Ferreira and Barcellos Silva 2021). Regarding the cost of electricity in Brazil, the International Energy Agency study concluded that the country has the 2nd most expensive tariff globally, behind only Germany (IEA 2021b). The costly presence of fossil fuel-fired thermoelectric plants and excessive government subsidies reflected as charges in the tariff are some of the explanations for the high energy price (Carvalho and Amarante 2019). Moreover, considering that Brazil is a developing country with great socioeconomic inequality, occupying the 87th position among the worlds’ per capita GDPs, with $7010 annually, the rise in electricity prices has a great impact on family incomes, especially on the most socioeconomically vulnerable (International Monetary Fund 2021; IDEC 2021). A low-income family in Brazil, for example, spends an average of 4.4% of its total income on electricity, more than twice spent on other essential factors, such as home maintenance and education (IDEC 2021). In the Brazilian case, although most of the energy comes from hydroelectric plants, water scarcity and the still low share of renewable sources, such as wind and solar energy, increase dependence on thermoelectric plants, which act as a safe source in the intermittence of the others (Corrêa Da Silva et al. 2016). Seeking an example that materialises the points highlighted, the chapter presents a recent case that emphasises the precariousness of electricity in the northern region of Brazil.

The Power Blackout in the State of Amapá—A Case Study The State of Amapá is in the North region of Brazil and has more than 860 thousand inhabitants distributed in 16 municipalities (IBGE 2020). Out of these, about 513,000 live in the capital, Macapá, which is located at the mouth of the Amazon River (IBGE 2020). Out of the 27 Brazilian federation units, it has the 3rd worst GDP and is within the region with the lowest share of the national GDP (IBGE 2020). As it is located near the Equator line and within the Amazon River Basin, it has a hot and rainy climate throughout the year, which provides a vast river network in its forested plains (Júnior et al. 2003). This river network is used as important transportation since its road infrastructure is precarious, with long stretches without asphalt and several points without water flow, where mud accumulates (Júnior et al. 2003). The state of Amapá was the last to be integrated into the National Interconnected System in 2015 (EPE 2019). Until then, the state was totally dissociated from the

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national system and was self-sufficient in energy, served by thermoelectric plants located in the state itself (EPE 2019). Regarding the National Interconnected System, there is, respectively, a higher density of transmission networks in the southeast, south, and northeast regions (EPE 2019). The midwest region, and mainly the north region, are rather neglected and have few connections or are “end of the line”, which are dependent and served only by one transmission line connected to the National Interconnected System (Carneiro et al. 2021). In the long run, the National Interconnected System could be a robust system and guarantee energy security for the whole country. However, it is still a model under construction and does not serve all regions equally (Carneiro et al. 2021). There is a strong environmental benefit in electrifying these isolated communities since it would reduce the burning of diesel, currently used as an energy supply by some of these peoples (Matiello et al. 2018). However, a significant operational difficulty lies in building energy distribution networks in densely forested regions with high construction, operation, and maintenance costs, which small populations would share in the current model (Matiello et al. 2018). The National Interconnected System was tested on 3 November 2020, when a substation responsible for connecting a transmission line of the system to the State of Amapá suffered a fire due to overheating, reaching two of its three transformers, the third being stopped for maintenance for months (Cordeiro et al. 2021). As it is the only connection point between the SIN and the distributors, the supply of electricity to the entire state of Amapá was interrupted, and 89% of the population, about 765 thousand people, were left without electricity service (Porto 2021). Only three of the 16 municipalities were not affected because isolated systems supply them (Porto 2021). The supply shortage remained unchanged for at least four days when the state managed, on an emergency basis, to provide the electricity in a precarious and rotating manner every three or four4 hours, depending on the region (Verino and Santos 2021). The electricity service was only completely re-established on November 25, that is, 22 days after the incident, when the affected equipment was replaced and repaired (Verino and Santos 2021). Throughout this period, living conditions in the region have become difficult. The lack of electricity had an impact on various sectors of society and the economy, affecting Internet and telephone services, ATMs and gas pumps, water supply systems, lighting, and public safety, causing loss of food, refrigerated supplies, and shortages of food and inputs in general (Souza and Chagas 2021). Also, the municipal elections in the capital Macapá, which were scheduled for November, had to be postponed to the following month (Porto 2021). The population, uncomfortable with the whole situation, went to the streets to protest, blocking streets and highways (Souza and Chagas 2021). Consequently, the state had to declare a state of public calamity to make it possible to receive federal funds and accelerate the purchase of inputs and generators that could mitigate the problem (Porto 2021). The situation was especially serious since it occurred in the middle of the COVID19 pandemic, just when the population should be in social isolation and fully served

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by electricity and water services, food supplies, and other essential services (Gomes et al. 2021). Transmission lines and transformers are responsible for the Macapá Lines Power Transmitting (LMTE), operated by the private company Gemini Energy (Carvalho and Carvalho 2021). This company recently (2019) acquired a concession from the Spanish group Isolux, one that had gained in 2008 the right to operate the transmission lines in the State of Amapá for 30 years, receiving from the federal government an amount of 13.8 million dollars per year (Porto 2021). While the population suffered from the consequences of the blackout, the state of Amapá produced and exported energy from four hydroelectric dams to the richest Brazilian regions (Miguel 2021). In the capital Macapá, after many days without electricity, the population staged protests that were harshly oppressed by the police (Benites 2020). When the energy rotation system returned, the first neighbourhoods served were the wealthy ones, with the periphery remaining for long periods in the darkness (Valfre 2020). This disregard for this population shows that, despite the idea that access to electricity is a universal right, energy consumption is proportional to the income of different sectors of the population, and in countries like Brazil, demand is strongly concentrated in industrial and urban centres (Miguel et al. 2021). Hence, it is noticeable that, in practice, the efforts to meet industry demand and economic growth are a higher priority than providing universal service to the electrical needs of the entire population (Miguel et al. 2021). As these large centres also concentrate on the media corporations and the economic and political apparatus, this region’s political agenda is self-centred (Oliveira et al. 2017). In this way, the unattended population is made invisible, running out of political or economic weight to reverse this situation (Steinbrenner 2007). Thus, socio-economic inequalities are not expressed in the energy system performance evaluations, and these evaluations end up reflecting the service provided to the main consumer centres (Miguel et al. 2021).

Conclusion The current challenge of the energy transition requires the revision of material and immaterial systems for most just and democratic models. As a result, social science concepts are intended to provide the energy field with resources to deal with its complex issues and moral dilemmas. The chapter sought to show that despite being considered more sustainable than the world average by the percentage of renewables, the Brazilian electricity sector presents critical weaknesses when we broaden the discussion with the concepts of energy democracy and energy justice. The effort was also pertinent to aggregate these issues beyond the usual production centres, which proved to be applicable to the Brazilian reality.

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Hydroelectric plants are the foundation for electricity generation in Brazil; however, the chapter sought to demonstrate the association of large projects with dictatorial periods, rooting models with low responsibility in the use and occupation of space, which persist in some way to the present day. It has also become evident that local populations have been denouncing injustices and demanding greater decisionmaking participation for many decades, as evident in the Balbina and Tucuruí dams cases, and currently on Belo Monte. Although the Amazon region is considered the only remaining territory suitable for constructing a hydroelectric dam in the country, the populations residing in this region still lack access to quality energy at affordable prices, as showcased in the case of Amapá. In addition, electrification is still a present obstacle for many citizens. Aware that these issues involve technical, economic, and regulatory difficulties, this chapter did not seek to propose structuring solutions to the problems mentioned and dedicated itself, within the defined concepts, to highlighting some Brazilian weaknesses that deserve more attention for improvement. Acknowledgements All the authors gratefully acknowledge support from SHELL Brazil and São Paulo Research Foundation (FAPESP) through the Research Centre for Greenhouse Gas Innovation (RCGI) (FAPESP Proc. 2014/50279-4 and 2020/15230-5), hosted by the University of São Paulo, and the strategic importance of the support given by ANP through the Research & Development levy regulation. Peyerl thanks the current financial support of grant Process 2017/18208-8, 2018/263889, FAPESP. This work was partially financed by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior.

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Chapter 5

Social Acceptance and Perceptions of Energy Transition Technologies in Brazil Anna Luisa Abreu Netto, Pedro Roberto Jacobi, and Drielli Peyerl

Abstract This work aims to analyse the social acceptance and perceptions of wind energy, solar energy, and carbon capture and storage associated or not with bioenergy in Brazil, technologies that can contribute to the energy transition. To investigate social acceptance, we present a bibliographic review of the case studies investigating acceptance of the cited technologies carried out in the country. The result showed that the Brazilian studies analyse different aspects of acceptance, including environmental, social, and economic impacts of the technologies and communication with the community. Furthermore, territory-related issues have proven to be very relevant in Brazil, emphasising the lack of land regularisation in the regions. Another interesting finding was that only carbon, capture and storage studies investigated the relation between climate change perception and technology acceptance, although this aspect could be relevant to all transition technologies. Finally, gaps in the literature and paths for further research on the subject were indicated, including case studies about carbon capture and storage associated with bioenergy, research on existing projects of solar photovoltaic, and social acceptance studies involving different stakeholders such as representatives of non-governmental organisations, investors, public authorities, and the media. Keywords Energy transition · Social acceptance · Conflicts · Wind power · Solar power · Carbon capture and storage · Brazil

A. L. Abreu Netto (B) · P. R. Jacobi · D. Peyerl Institute of Energy and Environment, University of São Paulo, Av. Professor Luciano Gualberto, N° 1289, São Paulo, Brazil e-mail: [email protected] P. R. Jacobi e-mail: [email protected] D. Peyerl e-mail: [email protected]; [email protected] D. Peyerl University of Amsterdam, Science Park 904, 1098 Amsterdam, Netherlands © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Peyerl et al. (eds.), Energy Transition in Brazil, The Latin American Studies Book Series, https://doi.org/10.1007/978-3-031-21033-4_5

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Introduction One of the great challenges of our time, combating climate change, depends on a joint effort to encourage technological changes and modifications in society’s behaviour that lead to a lower emission of greenhouse gases (GHG). These changes are essential to limit the increase in terrestrial temperature and avoid the effects of global warming, such as rising sea levels, droughts, changes in the rain regime, floods, heat waves, fire, and biodiversity loss (IPCC 2014). In this context, the energy transition to a low-carbon energy supply mix is one of the most relevant strategies since, among the sectors that emit GHG (IPCC 2006),1 the energy sector is the one that more contributed, corresponding to 73% of GHGs emissions in 2020 (Climate Watch 2020). In this energy transition scenario and technological changes, the social acceptance of new technologies is a relevant issue for implementing new projects and decommissioning GHG emission sources. Projects with scientific support for their development and approval of the population in a broad sense can be rejected, for example, by the community living close to the venture. Thus, it is important to understand the support of certain technologies from the perspective of several stakeholders, such as the general population, local population, media, private sector, public sector, and NGOs. Understanding the underlying reasons for the opposition is fundamental for improving practices and policies related to technology deployment. Some of the factors discussed in the literature influencing people’s perception include the following: perceived environmental impacts (e.g. Pinto et al. 2021; Seigo et al. 2014); social and economic impacts, whether positive (e.g. job creation and improvement of local infrastructure) or negative (e.g. risk for personal safety and harm to tourism activities) (e.g. Tcvetkov et al. 2019; Rand and Hoen 2017); trust in risk management and the stakeholders involved (e.g. Vallejos-Romero et al. 2020; Lizenich et al. 2020); effect on energy cost and consumer willingness to pay (e.g. Bochers et al. 2007; Sharpton et al. 2020). Batel (2020) argues that there are three waves of research on the social acceptance of renewable energy technology. The first wave (normative approaches) explains public opposition to technologies as a “not in my backyard” (NIMBY) phenomenon, which attributes to selfishness, ignorance, and irrationality of the opposing movements that do not want the technologies close to their residency. The second wave (criticism approaches), in short, aims to deconstruct the NIMBY explanation and focus on understanding the underlying reasons for opposition and changing policymakers and developers’ practices. Finally, the third wave (critical approaches) adopts a critical approach at the ideological, theoretical, and methodological levels and even questions whether opposition to renewable energy technologies should be reduced and overcome. 1

The IPCC has standardized and classified potentially emitting activities in the following sectors: energy, industrial processes, agriculture, land-use change and forestry and waste (IPCC, 2006).

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In this chapter, some relevant technologies to incorporate the mix of sources that drives energy transition in the world were selected for analysis. Firstly, the Brazilian commitments for the energy sector defined in the Nationally Determined Contribution (NDC) were considered (Brasil 2016). The commitments focused mainly on expanding renewable energies (having mentioned wind, solar, and biomass) in the Brazilian energy mix and increasing the share of sustainable biofuels. The chapter will focus on the wind and solar energy of these technologies. The analysis will also include carbon capture and storage (CCS) and the association of this source with biomass and biofuels. Although the Brazilian NDC did not mention CCS, this technology is considered by the Intergovernmental Panel on Climate Change (IPCC) (IPCC 2018) as a promising technology capable of removing large quantities of CO2 from the atmosphere. When CCS is associated with bioenergy (BECCS), it can generate negative emissions (e.g. Cox and Edwards 2019; Moreira et al. 2016), increasing CCS potential to combat climate change. Hydroelectricity is very representative of the Brazilian electric supply mix, corresponding to 63.8% in 2020 (EPE 2021), and socioenvironmental aspects are extremely important in the implementation of this source of energy in Brazil (Hess and Fenrich 2017). However, hydroelectricity was specifically mentioned in the Brazilian NDC as not belonging to the list of renewable technologies that will be expanded to achieve 45% of the Brazilian energy supply mix by 2030. For this reason, social acceptance and perceptions about hydroelectric power are not addressed in this chapter. For the development of the theme, the next section contains the description of the steps followed to form an inventory of case studies of wind energy, solar energy, and CCS in Brazil. Subsequent sections are divided accordingly to the technologies analysed, in the following order: wind power, solar power, and CCS. Finally, in the discussion and final remarks section, some relevant aspects are observed when the studies are compared, and the gaps in Brazil’s social acceptance and perception literature is addressed.

Case Studies Selection An inventory of case studies containing primary data collection of the selected technologies was elaborated primarily from research on the Scopus website using the name of the technology, the term “social acceptance”, and Brazil (e.g. solar energy social acceptance Brazil), in March 2021, with no restriction on the date of publication of the article. The term “social acceptance” was substituted by “public perception” in the second round of research. The term public perception was added to the investigation because it is one of the three most used keywords in CCS social acceptance research fronts, according to a bibliometric review carried out by Gaede and Rowlands (2018) on the social acceptance literature for energy technology and fuels. Only a few researches were found in these two rounds, as can be seen in Table 5.1.

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Table 5.1 Search results on Scopus website

Social acceptance

Public perception

Solar energy

1

1

Wind energy

4

2

Carbon capture and storage

0

2

This research resulted in only seven papers and not all of them with qualitative or quantitative research. The number of the papers found does not correspond to the sum of the articles in Table 5.1, as there are articles that appeared in multiple results. For comparative purposes, a search on the Scopus website replacing Brazil with Germany with the terms “wind energy social acceptance” was carried out, which resulted in 23 search results (Brazil results were four) and also with the terms “carbon capture storage public perception”, resulting in 14 results (Brazil results were 2). The comparison highlights the scarcity of this type of research with Brazilian data, which would be essential for a better view of social acceptance of these sources in the country’s energy transition. To increase the number of articles, non-systematic investigation on Google Scholar and snowball research were carried out, analysing articles cited in the articles primarily found. Then, case studies involving quantitative or/and qualitative research on the topic were selected. Eight studies were found about social acceptance of wind power, five about solar power, and three on CCS. For wind energy and solar energy, only published scientific articles were considered. However, thesis, dissertations, and reports were considered for CCS social acceptance analysis because only one article was found on the subject. In Fig. 5.1, the studies on social acceptance of the technologies covered in the chapter are associated with the Brazilian state in which the case study was carried out. The five case studies on the left side of the map did not target a specific location in Brazil. The selected studies will be discussed in the following topics to deepen the discussion on social acceptance of the selected technologies.

Wind Power Case Studies in Brazil Wind power generation is rapidly expanding in Brazil, with its share in the electric supply mix going from 0.4% (2.177 GWh), in 2010 (EPE 2011), to 9.2% (57.051 GWh), in 2020 (EPE 2021). The Brazilian territory has a sum of characteristics that made this expansion possible (Galvão et al. 2020, 4): “extraordinary winds, competitive generation costs and technical benefits of lower installation costs”. These features are especially predominant in the northeast region, where most wind farms are constructed, representing, in 2021, 88.4% of the installed wind power (ANEEL 2021).

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Fig. 5.1 Case studies in Brazil of social acceptance and public perception of energy transition technologies. Source Own elaboration

Wind power is the technology with the largest number of social acceptance research in Brazil among the technologies selected for this study. Eight case studies were identified. Brannstrom et al. (2017) reported the research on the Xavier community and the city of Acaraú (state of Ceará), both located next to wind farms, highlighting the conflict between local communities and wind farms entrepreneurs. Goyareb et al. (2018) also focused on the wind power next to the Xavier community, investigating through activities and interviews with the community, the planning and licencing process and mitigation policies due to negative impacts. Diógenes et al. (2019) interviewed 41 key stakeholders from the Brazilian wind energy sector about barriers to onshore wind farm implementation. Frate et al. (2019) and Dantas et al. (2019) investigated wind power acceptance by the local population living in the Galinhos community (state of Rio Grande do Norte). Galvão et al. (2020) examined through direct observation of the Asa Branca and União dos Ventos wind farm projects the connections between the implementation of wind farms, poverty, and social sustainability. Traldi (2018) focused the research on the communities of João Câmara (state of Rio Grande do Norte) and Caetité (state of Bahia), investigating through a variety of methodological technics, including interviews with stakeholders, the major socioeconomic, and territorial impacts of wind farms implementation. Sena et al. (2016) carried out a quantitative analysis from 407 questionnaires answered by Instituto Federal de Educação, Ciência e Tecnologia do Rio Grande do Norte (Federal Institute of Education, Science, and Technology of Rio Grande do Norte) students and teaching staff on social acceptance of wind and solar energy. According to stakeholders from the wind energy sector interviewed by Diógenes et al. (2019), social barriers to wind farms implementation are associated with local communities; general consumers do not oppose this energy source. In this sense, investigating acceptance of general population, Sena Ferreira and Braga (2016) found an acceptance of 93.9% for wind power among respondents and a majority perception

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that wind power either protects or has no impact on the environment (63.4%), while the minority (35.6%) believes it slightly endangers environment (only 1% believe it greatly endangers). Most respondents also believe wind power has a positive social impact, developing the local population. This shows a very positive image from the respondents (general population) towards wind power. The other discussed case studies, carried out in populations affected by wind farms, demonstrate that the relationship between the companies and the local population is more conflictual than this study with the general population shows, matching the stakeholders’ vision about social barriers of wind power found by Diógenes et al. (2019). One of the issues causing conflicts between companies and the local population is land ownership. Several north-eastern region territories lack land tenure security, harming the communities who traditionally occupy these areas. Since one of the main benefits of having wind farms in the territory is receiving rent for their installation on private land, families without the title deed have difficulty obtaining this benefit. That problem was observed in Galvão et al. (2020), Goyareb et al. (2018), Brannstrom et al. (2017), and Traldi (2018) and influenced people’s perception of wind farms. For instance, in Xavier community, although the families have been living on the site for at least three generations, they did not receive rent for the use of the land by wind farms developers, and the lease contract occurred between a private landowner and the company (Goyareb et al. 2018). According to Traldi (2018), the existing conflicts in some undocumented lands benefited companies from the wind sector, which bought those lands at prices far below the market. Also, stakeholders interviewed by Diógenes et al. (2019) also pointed out land regularisation as an important institutional barrier to wind energy implementation. The expectation and reality of these ventures’ economic advantages or disadvantages have influenced perceptions about the implementation of wind farms. Regarding job creation in the region, the perception of the local population was that the offer of employment existed mainly at the time of the construction of the wind farms; in the maintenance phase, few vacancies are offered to local people, resulting in a brief economic benefit for the region (Dantas et al. 2019; Galvão et al. 2020; Brannstrom et al. 2017; Frate et al. 2019; Traldi 2018). Some infrastructure enhancement, especially road construction or improvement, was perceived by the local population in Galinhos (Frate et al. 2019; Dantas et al. 2019), although part of the population surveyed by Dantas et al. (2019) points out this new infrastructure harm to the way of life of the population (e.g. facilitating social problems such as drug trafficking). The built infrastructure is not always perceived as beneficial to the population. In Xavier, the roads were built to provide access to the wind farms instead of serving the population, preventing them from accessing previously frequented areas (Brannstrom 2017; Goyareb et al. 2018). Traldi (2018) emphasised the rise in urban real estate prices in municipalities next to the developments, consequently raising rents and other living costs, culminating in some residents moving to neighbour municipalities with lower rents. For Frate et al. (2019), people’s perspectives on some aspects of the venture, such as who the beneficiaries of the venture are and the degree of procedural justice, will influence their view of the project, and thus,

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“different actors will use specific and contradictory aspects of justice concerns to build their support or opposition to wind farms” (Frate et al. 2019, 193). In this context, the research developed by Galvão et al. (2020) discusses the incongruence between the natural wealth exploited in the semi-arid region and the lack of human transformation, emancipation, and prosperity in the area where wind farms are being built. Galvão et al. (2020) argue that in Asa Branca and União dos Ventos wind farms, the installation of wind farms did not contribute to changing the socioeconomic conditions of most of the population, especially regarding health, education, and sustainable development of rural communities. Five case studies investigating the local population mentioned concerns with environmental impacts. The main problems include the suppression of native vegetation (Dantas et al. 2019; Galvão et al. 2020); destruction or levelling of dunes (Brannstrom et al. 2017; Goyareb et al. 2018; Dantas et al. 2019; Frate et al. 2019); burial of lakes and river silting (Brannstrom et al. 2017; Goyareb et al. 2018; Dantas et al. 2019; Frate et al. 2019); and harming of fauna, especially birds (Dantas et al. 2019; Galvão et al. 2020). The concern with environmental impacts stems from the population’s will to preserve the natural landscape and economic activities that depend on its preservation, such as tourism and fishing (Brannstrom et al. 2017; Goyareb et al. 2018; Dantas et al. 2019; Frate et al. 2019). Negative impacts caused by the project implementation may result in the local population demanding compensatory measures. The need for compensation was indicated by stakeholders interviewed by Diógenes, Claro, and Rodrigues (2019) to improve local population acceptance, and it was a process experienced by the Xavier community (Brannstrom et al. 2017; Goyareb et al. 2018). The negative effects suffered by the population of Xavier included the loss of interdunal lakes, which was a source of fish to the community, in addition to the erasure of the de facto land ownership. Mitigation policies were negotiated and agreed on the “donation” of R$540,000 to the construction of brick houses to the 22 families. This mitigation policy also had indirect negative consequences, such as mistrust among families due to housing construction, highlighting the importance of carefully considering the chosen compensation measures (Goyareb et al. 2018). How communication was carried out with the local population is also a recurring theme in the studies. In this context, Goyareb et al. (2018) identified the procedural injustices committed to implementing the project in Xavier, stemming from the decide-announce-defend policy, which marginalises people from decision-making. Galvão et al. (2020) describe the contact between the communities and companies’ representatives as superficial and indifference. Brannstrom et al. (2017) indicate that the local population are treated as “invisible” in the planning and siting processes, and Dantas et al. (2019) emphasise that this invisibilisation continues after implementation. Frate et al. (2019) suggest that procedural injustices in Galinhos appear to support highly engaged opposition to wind farms. It is important to highlight that all these studies were carried out in regions with a low human development index (HDI), which may have influenced communication between the company and the community.

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Solar Power Case Studies in Brazil In recent years, electric power generation through solar photovoltaic (PV) energy has also grown in Brazil; however, centralised PV still represented only 1.8% (3.327 MW) of installed power in 2021 (ABSOLAR 2021). In turn, the distributed generation of PV (not accounted in the Brazilian energy supply mix) is more representative than the centralised one, totalling 4.654 MW of installed power in the same year, with 470.156 systems connected to the network (74.9%—residential; 15.5%—commerce and services; 7.0%—rural) (ABSOLAR 2021). Five qualitative or quantitative studies were found on the social acceptance of solar energy. Frate and Brannstrom (2017) interviewed 34 stakeholders, Garlet et al. (2019) interviewed 12 professionals in the electric sector, and Queiroz et al. (2020) carried out quantitative research with 146 managers of the energy sector. These three works aimed to identify barriers (also drivers to a lesser extent) to PV expansion in a specific region or in Brazil. The objective of Echegaray (2014) study, totalling 76 interviews, was to identify the beliefs and support of consumers and business managers’ (not from the energy sector) for alternative energy, concentrating on solar. Finally, Sena et al. (2016), quantitative research with 407 respondents, investigated social awareness and acceptance of solar and wind power. The first three articles, which deal with barriers to the expansion of solar energy in Brazil, although not only focusing on aspects related to the social acceptance of stakeholders, bring some interesting elements to the discussion. In Frate and Brannstrom (2017), two findings stand out: (i) the respondents’ disagreement that “the loss of habitat for arachnids, reptiles, mammals, and birds affects the sustainability of solar electricity plants”, suggesting that respondents believed that biodiversity impacts could be minimised or did not exist; and (ii) the importance that must be given to socioenvironmental sustainability aspects for the expansion of this technology, involving and informing the communities. In this sense, respondents recognised the importance of the anti-dam protests movements in Brazil as a lesson to guide PV developers and avoid a sociopolitical barriers. Garlet et al. (2019) findings also bring appropriate diffusion of knowledge as an important social aspect to PV implementation, especially because when it comes to distributed generation, consumer culture is essential to the adoption of the technology. In contrast, Queiroz et al. (2020) results, measuring factors such as “social, cultural, and behavioural barrier”, associated with awareness of PV and lack of attention in policy decisions, among other characteristics, rejected the hypothesis that this barrier effects negatively solar implantation and expansion. Sena et al. (2016) and Echegaray (2014) addressed the issue of awareness. Sena et al. (2016) findings demonstrated that 96.3% of respondents recognised solar power. Echegaray (2014), when asking respondents to name two alternative forms of energy, observed that they commonly thought of solar energy. However, many consumers and, to a less extent, business elites, could not clearly distinguish thermal solar and PV power, besides other misconceptions. Thus, according to Echegaray (2014, 128), “awareness and favourability confront a number of myths and misconceptions, thus

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creating a support gap between approval and actual mobilisation in favour of these options”. In Sena et al. (2016), respondents demonstrated a very positive attitude toward PV, with more than 95% supporting the construction of new PV power plants in Brazil and in Rio Grande do Norte. Most respondents also believed the impact of the technology was positive or neutral in the environment, could reduce electricity bills, and tend to develop the local population. A similar perception regarding the environment was observed in Echegaray (2014), with consumers believing solar and wind energy to have minimal impact on the environment and managers thinking that the adoption of renewables could enhance their reputation.

Carbon Capture and Storage Case Studies in Brazil Unlike wind and solar power, carbon capture and storage (CCS) is not a technology to produce energy (see Chap. 9). This technology aims to remove large quantities of CO2 from the atmosphere by capturing it in emitting sources and transporting it to be stored in suitable locations, more commonly geological formations (IPCC 2005). In the context of the energy transition, CCS can be combined, for example, with power plants, providing energy security to the electrical network through a low-carbon source (Heuberger et al. 2017), and with the production of bioenergy (BECCS), among other emitting technologies in the energy mix (Moreira et al. 2016). The CO2 injection in geological reservoirs for Enhanced Oil or Gas Recovery (EOR/EGR), combined with CO2 storage after injection, is considered a CCS-EOR project. Brazil is home to one of the largest CCS-EOR projects globally, the Petrobras Santos Basin Pre-Salt Oil Field CCS facility, which captures CO2 from offshore natural gas processing with the capacity of injecting 4.6 Mt per year (Global CCS Institute 2020). There were also some small demonstration projects in Brazilian fields, such as the Miranga field (Recôncavo Basin—state of Bahia) and the Porto Batista field (state of Rio Grande do Sul) (Beck et al. 2011). The association of CCS with the production of bioenergy (BECCS) is one of the great hopes for achieving the goals of reducing the emission of GHG in the world (IPCC 2018). BECCS combines the low emissions resulting from the life cycle and energy production of some biomass feedstocks with the capture and storage of these emissions. In Brazil, sugar cane is gaining special attention for implementing BECCS technology because of the relatively pure CO2 steam arising from the fermentation of part of the primary energy converted into ethanol, which enables negative emissions when the CO2 is captured at this stage (Moreira et al. 2016). Some attempts to implement CCS in the world were frustrated due, in part, to the rejection of the technology by part of the population, as was the case in Barendrecht, Netherlands (Terwel et al. 2012). Although awareness about CCS has grown in recent decades, most studies still report a low level of awareness about the technology. Also, if compared to renewable energy, studies have shown that renewables are better perceived than the CCS (Tcvetkov et al. 2019).

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Social acceptance research of CCS in Brazil, however, is scarce. Only three studies were identified: Cunha et al. (2007), Lima (2018), and Netto et al. (2020). Cunha et al. (2007) presented the results from a survey about CCS public perception distributed in events about the theme to 994 people, targeting the scientific community’s perception. The study carried out by Lima (2018) aimed to analyse the public perception of CCS in the cities of Vitória and São Mateus (state of Espírito Santo), collecting 400 responses from a questionnaire in each city. Netto et al. (2020) published the paper that analysed social factors driving CCS perception in the Recôncavo Basin (state of Bahia) with a qualitative approach, interviewing 57 people living near potential sites. It is important to highlight that these studies did not collect people’s opinions about a project in the planning stage or already implemented. The questions were hypothetical, asking mainly general questions about their perception of technology. In these three studies, an important topic addressed was the respondents’ perception of climate change, which is very relevant due to the technology characteristics. CCS has no economic value unless the CO2 is used before storage (for example, EOR), which is why the importance of combating climate change must be very clear so that the population supports the costs arising from implementing the technology. In Lima (2018), around 88% of the respondents declared that climate change was a matter of concern for them. In Cunha et al. (2007), 84.69% of people considered the CCS’s contribution to the current debate on climate change at the national level in our country to be important or very important. In the interviews conducted by Netto et al. (2020), the respondents made no spontaneous connections between CCS and climate change. However, when asked about the severity of climate change, most people affirmed that it was a serious problem and that immediate actions were necessary. Because this is an emerging technology (Bäckstrand et al. 2011) unfamiliar to the general public, one of the very common questions in CCS social acceptance surveys is the level of public knowledge about the technology. Lima (2018) results showed that the minority declared that they knew the technology and knew how to define it (5%—São Mateus; 2%—Vitória), yet some of the definitions were mistaken. Due to the experience of part of those interviewed by Netto et al. (2020) with the oil sector, some people were aware of the possibility of injecting CO2 for EOR. However, no one knew about the option of storing the gas for climate mitigation purposes. Regarding technology support, Cunha et al. (2007) asked if CCS implementation on a large scale was necessary to achieve profound reductions in CO2 emissions from today to 2050 in the participant’s country, and globally, to which almost 72% answered as “absolutely necessary” and 18.25% as “probably necessary”, showing strong support to the technology. Lima found similar results, with 82% of São Mateus and 81% Vitória’s respondents agreeing on CCS technology development in Brazil. Netto et al. (2020) did not measure technology support but extracted some perceptions about the technology, such as concerns for their personal safety and foreseen lack of communication between the company storing CO2 and the population. An important aspect of CCS support is the population’s opinion about the government’s investment priority, the object of inquiry by Lima (2018). Among five areas that should be enumerated by the respondents (health, transportation, public safety,

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climate change, and employment generation), the first three occupied the first, second and third position, respectively, in the two cities. Climate change occupied the fourth position together with transportation in São Mateus. It occupied the fourth position in Vitória, showing that climate change is not seen as a priority by the respondents among these areas, climate change is not seen as a priority for the respondents. According to the author, “despite public support in both cities for CCS development in Brazil and government investments in technology, climate change is not a priority” (Lima 2018, 103). As CCS implies changes in the territory, the location where the implementation will occur and the previous experiences of the communities with other similar projects are fundamental factors for the acceptance of the technology. In the research developed by Netto et al. (2020), the ten communities researched lived in the surrounding areas of oil fields, identified in the literature as potential storage sites for CCS. The study showed that the previous experiences of these communities with this sector influenced their perception of CCS, for example, regarding their expectations of lack of communication with the communities about the technology implementation and risks. After presenting the technology, the perceived risks indicate the need for adequate contact with the communities, clarifying misconceptions such as the concern with soil fertility after CO2 injection. None of the identified research addressed social acceptance of CCS in the pre-salt fields or BECCS in Brazil, despite the theme’s relevance to the country. CCS offshore sites have encountered less opposition than onshore storage, which is why proximity to projects has been considered a factor that influences social acceptance (Haug and Stigson 2016). Future research on the CCS Project on the Petrobras Santos Basin Pre-Salt Oil Field may unveil several issues, such as the existence of conflicts or resistance to CCS in the region, the awareness of the people living nearby about the project, and whether the issue of proximity is a factor for the acceptance of the technology in Brazil. While much of the factors influencing CCS perception relate to where the CO2 will be stored, the source from which the CO2 will be captured can also influence perceptions. This discussion directly involves the deployment of BECCS. Dütschke et al. (2016), for example, found that in Germany, CCS project with the CO2 source from a biomass power or in the industry is rated more positively than if CO2 came from a coal-fired power plant. Considering Brazil’s potential for the development of BECCS, social acceptance surveys considering the emitting source of CO2 are fundamental.

Discussion and Final Remarks Although the research on the technologies was analysed separately, some observations can be made when comparing the sets of research found on the social acceptance of each of the technologies.

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Territory-related issues have proven very relevant in Brazil, especially for wind energy and CCS. Communities traditionally settled in areas with little attraction for farming activities, using communal lands, and without land title are conditions that occur in several country regions. However, these regions may currently have great potential for renewable energy. As the payment of rent or royalties usually depends on proof of land ownership, land regularisation is a topic that needs to be observed in the implementation of the technologies and whose discussion predominated in the studies on wind energy, but which are pertinent to all three technologies highlighted. In the case of solar photovoltaic (PV) energy, for example, when its production occurs in large solar farms, land-related conflicts can also arise, as was the case reported by Yenneti et al. (2016), in which Indian families from vulnerable communities were dispossessed from their life-sustaining assets. Thus, this cross-cutting theme to all three technologies needs further exploration, especially for solar energy and CCS. It is important to note that none of the studies found focused on the NIMBY concept, which associates the rejection of technology with the proximity of this technology to people’s homes, without a greater depth on the issues behind this rejection. The research, especially the case studies on wind energy, had a more critical content and may be positioned, according to Batel’s (2020) classification described in the introduction, in the second or third wave of research on social acceptance of renewable energy. The research on solar energy had a less critical content among the technologies investigated in this work because the focus of most studies was to discuss barriers and drivers for the implementation of solar energy, analysing social acceptance as a barrier to the performance of the technology, without a critical view on the subject. Another interesting point observed when comparing the discussions about the technologies is that only the research on CCS analysed the relationship between social acceptance of the technology and perception of climate change. Some studies on solar PV and wind energy mentioned climate change only as contextualisation on the existence of a global movement to increase renewable energy in the energy supply mix, without verifying if the perception of climate change could affect the perception of the technologies. As for the gaps in the literature, it was observed that research on acceptance and perception of wind energy are concentrated in only few Brazilian states. Although these are states with much relevance in the wind energy scene, research on social acceptance is also needed in other states, with different social, economic, and environmental context, and which are also home to large wind projects. Research on CCS has not focused on existing projects, as is the case with the presalt CCS project, but on the possibility of projects being implemented in the regions surveyed. Therefore, research on public perception of pre-salt CCS represents a gap in the literature on the subject. In addition, research on social acceptance of BECCS is of utmost importance to understand the stakeholders’ position on this technology. Similarly, research on solar PV has not focused on specific cases existing projects. Thus, research in this area is emphasised, especially on solar farm projects in Brazil.

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Finally, it was observed that research on social acceptance needs to broaden the list of stakeholders surveyed, including, for example, representatives of nongovernmental organisations, investors, public authorities, and the media. A broader survey would give a better view of how stakeholders influence the implementation and perception of the technologies. Social acceptance studies on technologies relevant to energy transition in Brazil are insufficient. The gaps pointed out are just some of the studies that still need to be conducted in Brazil. As the studies have shown, socioenvironmental issues should not be neglected, especially when it comes to technologies that are of great importance to the Brazilian energy transition and, consequently, contribute to reducing the impact of Brazilian climate emissions. Acknowledgements Netto thank especially Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (Capes) for the scholarship. Peyerl thanks the current financial support of grant Process 2017/18208-8, 2018/26388-9, FAPESP and SHELL Brazil and São Paulo Research Foundation (FAPESP) through the Research Centre for Greenhouse Gas Innovation (RCGI) (FAPESP Proc. 2014/50279-4 and 2020/15230-5), hosted by the University of São Paulo, and the strategic importance of the support given by ANP through the Research & Development levy regulation. This work was partially financed by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior – Brasil (CAPES) – Finance Code 001.

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Chapter 6

Digitalization in the Brazilian Electricity Sector Stefania Gomes Relva, Maria Rogieri Pelissari, Vinicius Oliveira da Silva, and Drielli Peyerl

Abstract This book chapter provides an overview of the digitalization process in the electricity sector, highlighting its relation and contribution to the energy transition to a low-carbon system and its current scenario in Brazil. First, we systematize the main technologies related to digitalization. From this, we identify the segments of the electricity sector in which these technologies can be applied to assist energy transition. Then, we evaluate how these elements are evolving in the Brazilian electricity system through the investigation of government initiatives and the historical (2008–2021) of Research and Development (R&D) projects. We found 263 projects related to digitalization, which represents only around 10% of the total number of projects. Digitization contributes to the energy transition by providing technologies that optimize the generation and efficient energy use, allowing greater penetration of renewables and better use of energy resources. However, for this, it is necessary to restructure market and regulatory models. Although the Brazilian government has been developing some plans and strategies for technologies such as the Internet of Things, cyber security and overall digitalization issues, few practical structural changes were identified. Thus, digitalization in the Brazilian electricity sector is still in its infancy, with a need for initiatives to speed up reforms and to make the most of the national renewable energy potential. S. G. Relva (B) · V. O. da Silva Energy Group of Department of Energy and Electrical Automation Engineering of the Polytechnic School, University of São Paulo (GEPEA/EPUSP), Av. Professor Luciano Gualberto, Travessa 3, N° 158, Prédio da Engenharia Elétrica, São Paulo, Brazil e-mail: [email protected] V. O. da Silva e-mail: [email protected] M. R. Pelissari · D. Peyerl Institute of Energy and Environment, University of São Paulo, Av. Professor Luciano Gualberto, N° 1289, São Paulo, Brazil e-mail: [email protected] D. Peyerl e-mail: [email protected]; [email protected] D. Peyerl University of Amsterdam, Science Park 904, 1098 Amsterdam, Netherlands © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Peyerl et al. (eds.), Energy Transition in Brazil, The Latin American Studies Book Series, https://doi.org/10.1007/978-3-031-21033-4_6

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Keywords Energy transition · Digitalization · Electricity system · Renewable energy sources · Brazil

Introduction The use of Renewable Energy Sources (RES) is crucial to attaining the decarbonization of the energy sector (Silvestre et al. 2018). Other measures, such as demand-side management (DSM) programmes and increased efficiency in energy generation and use are also needed to reduce the energy sector’s carbon footprint (Fattahi et al. 2020; Ramamurthy and Jain 2017). Both for a large penetration of RES and to improve energy efficiency and implement DMS, technologies such as big data analytics, cloud computing (Chou et al. 2016), smart meters and Internet of Things (IoT) (Ramamurthy and Jain 2017) are necessary. These technologies, among other benefits, contribute to a greater flexibility of energy systems (Silvestre et al. 2018), guaranteeing constant balance between energy demand, which has an increasingly dynamic profile (Pfenninger et al. 2014), and energy supply, which has an increasingly variable profile. Thus, digitalization is one of the key strategies currently used to drive an energy transition to a low-carbon future, mainly in the electricity sector (Rosetto and Reif 2021). In terms of technology, digitalization is simply the process of converting analogue data into digital form (Parviainen et al. 2017). However, this process allows a range of technologies to be developed and implemented in different industries and business models, changing the dynamics of operation, expansion, and commercialization of production sectors. Yoo et al. (2010, 4) defined digitalization as: “the transformation of existing socio-technical structures that were previously mediated by nondigital artefacts or relationships into ones that are mediated by digitized artefacts and relationships with newly embedded digital capabilities”. Thus, the digitization of the energy sector does not only concern the process of making information digital, but also the process of transforming the dynamics of the sector’s functioning through the incorporation of new models and strategies, such as business model innovation (Loock 2020). Especially in the electricity sector, it is very likely that digitalization will profoundly change the market structure and transactions, the way the infrastructure is used and the relationship of consumers with this system (EPE 2020). This book chapter offers an overview of how the digitalization process can change the dynamics of the electricity sector, contributing to the energy transition to a lowcarbon sector. Moreover, we evaluate how digitalization is being handled in the Brazilian electricity sector. In section two, we delimit and conceptualize the leading technologies related to the digitalization process. Section three presents the applicable technologies in each stage of the electricity industry and their relationship with energy transition. Section four offers the development stage of digitalization in the Brazilian electricity sector. At last, section five shows the conclusions and recommendations.

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Digitalization and Energy Transition Digitalization Technologies Digitalization is the drive of Industry 4.0 (Silvestre et al. 2018). According to Chen and Despeisse (2020), the key Industry 4.0 technologies are cyber physical systems (CPS); IoT; cloud computing; big data analytics; virtual reality (VR)/augmented reality (AR); intelligent robotics; industrial artificial intelligence (IAI); and additive manufacturing (AM). Silvestre et al. (2018) analysed the digitalization in power infrastructures. The authors cite as main technologies: IoT; cloud computing; mobile; blockchain; and information and communication technologies (ICT). In turn, a systematic review prepared by Lu et al. (2019), about digitalization in Oil and Gas (O&G) sector points out that the key technologies are: big data; industrial IoT; digital twin; wireless communication technologies; AR and wearable device; blockchain; autonomous robot; 3D printing; cybersecurity; and system integration. Besides the natural intersection between O&G and electricity sectors, the two industries have a lot of similarities, such as natural resources exploration in remote areas, the necessity of huge transport infrastructure, high-risk activities, the need to guarantee long-term operation and energy supply security. Based on that, Table 6.1 presents a brief conceptualization of the key technologies defined by Lu et al. (2019) and Silvestre et al. (2018), exemplifying some applications for the electricity sector.

Digitalization and the Energy Transition to a Low-Carbon System The technologies have been characterized individually in the previous section; it is important to note that this separation does not exist in practice. For example, the application of technologies such as IoT is only helpful if the data generated by “things” are properly stored, processed, and used for something, like the application of algorithms to optimize the operation of equipment. IRENA (2019) highlights the importance of the interdependence and integration of these technologies and the need to implement multiple technical, political, and regulatory requirements to insert blockchain into the sector. In addition, several other support technologies were not specified, among them, artificial intelligence and, more specifically, machine learning algorithms; these technologies are essential so that, together with the elements presented, digitization effectively generates an impact in the sector. Based on this first technical analysis, we were able to systematize the parts of the electricity chain that digitalization can be applied to and assist energy transition to a low-carbon system (see Fig. 6.1). Energy flow management and forecast regard two main activities. First is the ability to rapidly respond to energy flow variations and the management of prosumers.

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Table 6.1 Main digitalization technologies for the electricity sector Technology

Conceptualization and comments

Applications and implications for the electricity sector

IoT/Industrial IoT

The IoT definition given by the Institute of Electrical and Electronics Engineers (Minerva et al. 2015, 74) is: “(…) a network that connects uniquely identifiable ‘Things’ to the Internet. The ‘Things’ have sensing/actuation and potential programmability capabilities. Through the exploitation of unique identification and sensing, information about the ‘Thing’ can be collected and the state of the ‘Thing’ can be changed from anywhere, anytime, by anything”. This communication also occurs among ‘Things’, and among ‘Things’ and humans (Chui et al. 2010). The industrial IoT is the application of IoT in industrial facilities. It integrates sensors, mobile communication technology, and intelligent analysis technology into all aspects of the industrial production process, so as to collect, monitor and analyse data (Lu et al. 2019)

Smart meters are an early example of IoT, with its ability to deliver near real-time consumption data and connect and/or disconnect customers, both without visiting the customer location (Ramamurthy and Jain 2017) Wind turbine manufacturers offer a variety of services by measuring wind speed, wind direction, pitch angle, and other parameters at each turbine and transmitting it to an IoT hub for optimizing the production of the wind farm as a whole (Ramamurthy and Jain 2017). Overall, IoT has exponentially increased the information that electricity companies can access thanks to simple measurement and communication devices installed in buildings, cars, electrical vehicle chargers, etc. (Silvestre et al. 2018)

(continued)

IoT, data analytics, cloud services, and AI technologies can improve dispatch decisions, optimize operation models, minimize vulnerabilities, and increase operational efficiency (Ghobakhloo and Fathi 2021). Besides that, technologies made possible by IoT favours decentralized generation so that energy consumers can manage their own energy consumption (Rajavuori and Huhta 2020) and own generation through renewables, reducing energy transmission and distribution losses, thus contributing to a low-carbon energy transition. The implementation of smart meters, by providing a bidirectional flow of energy, propitiates better management of the consumption and enables demand response, and it is one of the key variables for the decentralization of the electrical system operation and the creation of new business opportunities of energy in retail (EPE 2020). This also facilitates the use of electric vehicles as a means of transport and residential energy storage resource, resulting in vehicle-togrid technology (V2G). AI applications facilitate the electrification of transportation

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Table 6.1 (continued) Technology

Conceptualization and comments

Applications and implications for the electricity sector

Cloud computing and big data

Big data is the set of big volumes of data that has a variety of types (structured, unstructured, or semi-structured), generated by multiple sensors in high frequency (Chou et al. 2016). Cloud provides remote data computing and storing for big data and, together with big data analysis, offers the capacity of analysing a significant amount of data for generating insight in real-time (Silvestre et al. 2018). Cloud computing is one of the most substantial innovations in modern information and communication technology because of its virtualized resources, parallel processing, security, and data service integration with scalable data storage (Chou et al. 2016). It enables the storing of the amount of data generated by IoT applications

Big data analytics and cloud computing permeate most digitization technologies. For example, a smart metering infrastructure (IoT) installed in a residential building: the generated big data is then an input for dynamic multiobjective optimization models and data analytics through cloud computing to generate energy consumption patterns and alternative energy-saving solutions; thus, it is possible to identify consumer usage patterns, facilitate energy usage efficiency, and accurately estimate future energy demands (Chou et al. 2016)

(continued)

by automating the driving of individual vehicles and the operation of entire traffic systems (Rajavuori and Huhta 2020). The second activity of Energy flow management and forecast is related to the data collection for energy generation and demand forecast. Cloud computing and big data analysis linked to machine learning algorithms can provide a better understanding of renewables profile and energy demand profile, optimizing energy management, increasing the overall visibility and control over the energy production and delivery operations (Ghobakhloo and Fathi 2021), which brings more security to the energy system, making room for large RES penetration (Scharl and Praktiknjo 2019). Regarding Construction and predictive maintenance, energy infrastructure involves several supply chains. The use of digital twins and AM can optimize the construction process, reducing material waste (Ruiz-Morales et al. 2017), therefore, reducing carbon footprint. Besides, power infrastructure predictive maintenance benefits from IoT digital twins and autonomous robot technologies. Remote monitoring of infrastructure performance contributes to faster identification of failures. The use of digital twins (Biagini et al. 2020) and artificial intelligence connected to

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Table 6.1 (continued) Technology

Conceptualization and comments

Applications and implications for the electricity sector

Wireless communication/mobile/ICT

ICTs combine information and communication technologies and consist of hardware, software and services and among all ICT technologies, mobile/wireless technologies have received the most attention since the 1990s (Zheng and Wang 2021). Compared with traditional communication technology, wireless technology is a more cost-effective way of communication and more suitable for long-distance equipment operation (Lu et al. 2019). Wireless technology can be used to monitor extensive transport infrastructure. (Lu et al. 2019). In addition, with the development of IoT, the demand for intelligent sensors is increasing, and wireless technology can greatly improve the transmission efficiency of sensor data, especially for monitoring (Lu et al. 2019). Thus, modern ICT and wireless communication is a development requirement for IoT

“When there is a generator trip, ICT can provide data about which customers will be affected (through a geographic information system [GIS] and a customer information system), how much energy should be bought from neighbouring utilities versus from peaking generators and if there is need for repairs, what is the level of the spare parts inventory” (Ramamurthy and Jain 2017, p.8)

(continued)

big data analysis can also predict failures and autonomous robots speed up failures’ prevention and repair (Debenest et al. 2008). A more resilient and secure power network also benefits large penetration of RES due to its robustness to assimilate power variations. In terms of Business, as the flow of energy becomes more dynamic, so does the energy market structure. In this sense, smart markets can ensure efficient commercialization according to customer preferences: computational intelligence supports market participants by gathering as well as assessing information (Savvidis et al. 2019). Blockchain can also play an important role, with the potential to facilitate distributed, peer-to-peer trading with reduced transaction costs, increased security via cryptography, and prosumer choice (Ahl et al. 2020), which brings lower costs and higher security for the system, enabling higher penetration of renewables and intermittent sources. Machine learning techniques, used for energy pricing forecasts in the

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Table 6.1 (continued) Technology

Conceptualization and comments

Applications and implications for the electricity sector

Digital twin

The digital twin is a comprehensive digital representation that can simulate the actual behaviour of an individual product (Haag and Anderl 2018). It includes the properties, conditions, and behaviour of the real-life object through models and data and is developed alongside its physical twin and remains its virtual counterpart across the entire product lifecycle (Haag and Anderl 2018). Digital twin uses analytical techniques to perform algorithm simulation and visualization procedures to analyse data and provide insights; it is often used for fault identification and diagnosis of equipment (Lu et al. 2019)

The application of digital twin technology in the electricity industry mainly includes dynamic monitoring and maintenance of power generation equipment and control counters and real-time operational control of the power grid (Huang et al. 2021). Specifically, it includes the following aspects, among others: (i) to build a new generation of simulation platforms, (ii) to improve calculation efficiency and accuracy, (iii) to improve the electricity system’s defence capabilities under cascading failures, extreme disaster weather or external damage conditions (Huang et al. 2021) (continued)

medium and long terms (Weron 2014), can have a similar effect regarding leading to a better comprehension of risks, lowering costs and consequently facilitating Power Purchase Agreements (PPAs) for new renewable projects. On the other hand, the Security aspect is the key that enables both the digital and energy transitions to occur at a safe pace. It ranges from the cybersecurity of energy systems (Sun et al. 2018) and privacy in smart systems (Véliz and Grunewald 2018) to geostrategic competition in energy technology (Bazilian et al. 2019). Considering that Industry 4.0 is still in its infancy, a robust and efficient comprehension of possible risks and learnings involved in the use of the mentioned technologies is necessary. Thus, security comes not only as a prevention tool for avoiding data leakage, for example, but also to leverage and potentialize their utilization and maximize their value, leading to a more efficient transition. However, the dynamics of the ‘digitalization of security’ in the energy sector remains poorly understood (Rajavuori and Huhta 2020). Regarding the Environment, digital and communication technologies, together with the process of cheapening measurement sensors, expand the possibility of creating large interconnected networks of environmental data collected with capillarity (Kumar et al. 2015). It is important to highlight that power plants are already important generators of environmental data, whether for economic and operational

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Table 6.1 (continued) Technology

Conceptualization and comments

Applications and implications for the electricity sector

AR and wearable device

AR is a technique for calculating the position and angle of camera images in real-time and adding corresponding images, videos, and 3D models, integrating the real world and virtual information (Lu et al. 2019). The greatest use is the training of operators to become experts before the actual operation, reducing the probability of operational errors (Lu et al. 2019). The difference between AR and virtual reality (VR) is while AR combines real and virtual objects in an environment, executing it in a real-time, and provides real and virtual object alignment, in a VR application, there is a total virtual scenario representation, which can be a full user immersion or a semi-immersive case inside a dedicated room (João et al. 2020)

Applications are mainly for system maintenance. For VR, training for activities involving risk and complexity are the most suitable use, such as: operations in confined space, high places, energized assets (João et al. 2020) AR can be applied in activities such as remote assistance in which expert instruction is given to an on-field operation withdraws and virtual representation into the activity (João et al. 2020)

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interests (e.g., obtaining wind data at the generation site to improve short-term generation forecasting models), or for safety reasons (e.g., monitoring sediment loads upstream of a dam to ensure the structural safety of the dam) (Relva 2021). Thus, the digitalization process can generate greater interconnection between these two areas, both in the energy sector and in the environmental monitoring systems. If there is an effort to cloud the environmental data collected by different industries, better mapping of environmental conditions can be developed (Relva 2021). The application of artificial intelligence models to these data can allow (i) a better understanding of the environmental and social dynamics; and (ii) the development of better forecasting models (Relva 2021). This leads us to the last aspect of Fig. 6.1, which is the Multisector integration. Digitalization facilitates sharing of information and services, promoting a greater integration among different economic sectors. In cities, the use of sensors, computing and data pervades many urban domains and provisions, namely associated with mobility and energy (Van Winden and De Carvalho 2017). Large electricity companies have been active in deploying smart city pilots in many cities to test new ways to produce and distribute electricity. These pilots are often deployed in concrete

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Table 6.1 (continued) Technology

Conceptualization and comments

Applications and implications for the electricity sector

Autonomous robot

Robots can operate across the full range of infrastructure inspection, maintenance and repair tasks working in the air, on the ground, in water and underground (Richardson et al. 2017). Thus, based on the definition of autonomous given by Watson and Scheidt (2005), autonomous robots can be understood as robots capable of changing their behaviour in response to unanticipated events during operation. This is achieved mainly due to the application of artificial intelligence algorithms. This technology is especially useful for enabling more frequent inspections on hard-access locations, catching defects early and preventing an escalation of damage (Richardson et al. 2017)

Insertion and removal of aircraft warning spheres on aerial power lines. Inspection of aerials and underground power lines and repair damage cables. Monitoring dams and reservoirs: finding fissures and cracks in dams, accumulation of debris in the bed, among others (Lages and Oliveira 2012)

3D printing/additive manufacturing (AM)

AM, popularly called 3D printing, is the process of making a three-dimensional solid object by adding layer-upon-layer material starting from a digital computer model designed (Ruiz-Morales et al. 2017). 3D printing allows for increasing shape complexity while reducing waste material, capital cost and design for manufacturing (Ruiz-Morales et al. 2017)

Possible applications for the electricity sector are the fabrication of micro-reactors (gas capture, gas separation, water purification, etc.), solar concentrators, components for solid oxide fuel cells, and microcell concentration PV array (Ruiz-Morales et al. 2017)

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city neighbourhoods and often take the form of living labs. Companies, government entities, knowledge institutes, and citizens are engaged in experimenting with new solutions (Van Winden and De Carvalho 2017). Along with the arrival of the 5G era, a massive increase in IoT devices is expected to enable greater integration among sectors (Liu et al. 2021). Besides that, through the digitalization of energy management, it is possible to implement the hybridization of energy. Electricity can be easily transformed into

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Table 6.1 (continued) Technology

Conceptualization and comments

Applications and implications for the electricity sector

Cybersecurity

As society’s reliance on digital and data-driven technologies has grown, many conventional security paradigms have been refined, aiming at data control, and the resilience of information systems. Therefore security has also been digitized (Rajavuori and Huhta 2020)

In the electricity sector, cybersecurity is a worry mainly regarding data leakage; for example, using electric vehicles as a battery to balance the power system involves the collection of user data, such as location, driving routes or parking routines; this information can reveal much about a person’s private life (Rajavuori and Huhta 2020)

System integration

Several digital and communication technologies have been used to operate most physical systems, from traffic to water supply (Rajavuori and Huhta 2020). Thus, digitalization leads to the interconnectivity of different sectors, implying new cooperative alliances between different industries (Canzler et al. 2017). This interconnectivity and technologies, added to the cheapening of environmental measurement sensors, also amplify the possibilities for creating large interconnected networks of environmental data collected with capillarity (Kumar et al. 2015). System integration also occurs inside the same industry, helping the cooperation between the various parts of the supply chain (Lu et al. 2019)

Electricity systems are inherently interconnected, normally by a combination of advanced and legacy technologies installed decades ago (Rajavuori and Huhta 2020). Although it is beneficial and necessary for power flow management, this interconnection makes electrical systems especially vulnerable to the far-reaching effects even of small incidents (Rajavuori and Huhta 2020)

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every other form of energy, making it an ideal instrument for new PtX-processes (e.g., power-to-heat, power-to-chemical). The flexibility gained then promotes the coupling of previously separate sectors (Scharl and Praktiknjo 2019). Thus, multisector integration optimizes resource utilization and improves energy efficiency.

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Table 6.1 (continued) Technology

Conceptualization and comments

Applications and implications for the electricity sector

Blockchain

A blockchain is a ledger of blocks where each block contains one or more transactions (Silvestre et al. 2018). It is a distributed recording technology that uses decentralized, shared universal storage to record data of cryptographic transactions (Silvestre et al. 2018)

Companies such as Grid Singularity, Solar Coin and Ethereum use the blockchain to transact electricity (Extance 2015). Using the blockchain, microgrids can become more resilient with a commonly used database for managing transactions, both to electricity and financial payments (Green and Newman 2017). Although it is necessary to consider technical issues, e.g., physical connection and proximity between generations and loads, it does not indeed guarantee the exchange of flows between entities that are virtually exchanging goods (Silvestre et al. 2018)

Digitalization Initiatives for the Electricity Sector in Brazil Governmental Initiatives Linking the themes electricity sector and energy transition to a low-carbon system in Brazil is tricky because the country already has a very clean power supply mix (see Chap. 7). Indeed, an increase in emissions in the Brazilian electricity sector was observed in the last years, caused by natural gas use increase (see Chap. 8). Thus, the big challenge in Brazil is to keep the sector as clean and efficient as possible, making the electrification of other more emitters sectors viable, and then reducing overall energy emissions. Based on that, we investigate what digitalization initiatives have been done in Brazil to guarantee the continuous entry of renewables and the efficient use of energy. At first, we can observe that the initiatives are recent in Brazil with few practical applications. Considering initiatives beyond the energy sector, we can highlight the Brazilian Strategy for Digital Transformation, the Brazilian National Internet of Things Plan, some legislation about cybersecurity and the Brazilian National Cyber Security Strategy (E-Ciber). The Brazilian Strategy for Digital Transformation was launched in 2018 by the Ministry of Science, Technology, Innovations and Communications (MCTIC 2018). The document resulting from this initiative presents a scenario assessment and a

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Fig. 6.1 Electricity chain and digitalization process

long-term strategy for economic digitalization (MCTIC 2018). The energy sector is pointed out as one of the industries linked to data-based economy and IoT initiatives. Still, apart from that, no vital mention is made about the electricity sector. The National Internet of Things Plan was also established in 2019 by the Federal Government through Decree No. 9854 (Presidency of the Republic 2019), which is intended to implement and develop the Internet of Things based on free competition and free circulation of data, subject to the information security and personal data protection guidelines. This plan can be considered highly applicable for the leverage of IoT and its implementation in the electricity sector. The Analysis of National Demand for IoT, published by the government (Ministry of Science n.d.) indicates energy and water management as two of the main potential sectors for the use of IoT sensors and smart meters. According to the document, the use of these technologies in these sectors can reduce costs, decreases losses, increases the reliability of supply systems and the life cycle of equipment, leading to greater penetration of distributed generation. Despite its great potential, the authors did not find further documentation regarding the evolution of the National Plan or related products and results.

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Regarding regulation and cybersecurity, Brazil is still in its infancy, with many incidents reported every year, but with an increasing development, moving from the 38th position in the Global Cybersecurity Index in 2017 (ITU 2017) to the 18th in 2020 (ITU 2021). Still, Brazil has undergone a significant institutionalization of its own national cybersecurity landscape. For instance, the General Law on Data Protection was published in 2018 (Presidency of the Republic 2018), establishing institutional arrangements for personal data protection. It was followed by Decrees nº 9573 on the National Policy for Critical Infrastructure Security; Decree 9637, which instituted the National Policy on Information Security; and Decree 10,222, which approved the National Cyber Security Strategy. Decree 10,222 was published in 2020 (Official Diary of the Union 2020), aiming at a broader development and implementation of cyber security mechanisms in the country in an integrated framework including different sectors between 2020 and 2023, implementing a culture of cybersecurity. The strategy includes identifying main areas of interest and critical infrastructures, methods for developing and expanding cybersecurity in the country (Official Diary of the Union 2020). Among other statements, the Decree highlights: (i) there is a dissonance between the projects carried out by public and private universities and the need for cyber security solutions on the part of the productive sector; (ii) there is an urgent need for cooperation between countries to mitigate threats such as cybercrimes, cyber-attacks on critical infrastructure, cyber espionage, mass data interception; and (iii) there are good managerial initiatives in Brazil on cybersecurity; however, these are fragmented and punctual, which makes it difficult for the convergence of efforts in the sector. Despite the enormous importance of the National Cyber Security Strategy, the authors did not find further developments and results, a part of the publication by the Brazilian National Council of Energy Policy of a resolution in 2021 (CNPE nº 24/2021) determining guidelines for cybersecurity in the electricity sector. However, the resolution presents only general guidelines for the electricity sector, such as: “establish policies that promote the use of technological resources and continuous improvements that mitigate the risks of cybernetic incidents” (Official Diary of the Union 2021, 01). In 2021, it was also launched the study “Use of new digital technologies to measure energy consumption and energy efficiency levels in Brazil” (Lima et al. 2021) which was the result of the Brazil-Germany Energy Partnership. The focus of the study is to analyse the applicability of German initiatives in Brazil. The document highlights that a single monthly reading still measures electricity consumption in Brazil carried out manually and in person by employees of the distributors. This lack of demandprofile data hampers the strategic investment decisions needed by the country to ensure energy sector development (Lima et al. 2021). The study concludes that three fundamental challenges are evident, in addition to the technical and infrastructure networks ones: (i) the need for a bidirectional measurement system between distributor and consumer and definition of who pays for this investment, (ii) the need for the active participation of the customer, from

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their understanding (education) about energy, consume and the costs, to the possibilities of influence they can cause on the network through investments in selfgeneration and reduction and/or displacement of consumption, and (iii) the need for regulatory and legal modernization of the country’s energy distribution concession, to demand/encourage and monitor digitization across the entire energy business chain. Besides that, the study also highlights the need for communications apparatus and data storage, management, analysis, and indicators systems that are very different from the system and operation existing in concessionaires today to enable the implementation of modern demand-side management measures. In 2019, the Brazilian Ministry of Mines and Energy (MME) established an Electric Sector Modernization Working Group. This group aims to carry out a broad diagnosis of the functioning of the electricity sector to understand what should be implemented and integrated to enable its modernization and increase efficiency, sustainability, and safety. From the topics included, the insertion of new technologies is one of the most relevant and directly relates to the sector’s digitalization. From the final report on the diagnosis and implementation of new technologies (EPE 2019), Smart Grids, System Integration and Blockchain were the major focus.

Research and Development Initiatives In Brazil, the companies operating under the government’s concession, permission, or authorization in distribution, transmission or power generation must apply a minimum percentage of their net operating revenues in Research and Development (R&D) projects. The companies must report the funded R&D projects to the Brazilian National Electricity Agency (ANEEL) (Lages and de Oliveira 2012). In 2021, the Agency opened a public consultation (ANEEL 2019) on improving the rules of Research, Development and Innovation Procedures. The idea is to foster the development of innovation as a fundamental objective in the electricity sector from projects developed by the companies, aiming at delivering practical results to society. Implementing measures and proposals is expected to start in 2023, conditioned by the consultation approval. This new improvement rules initiative reflects the necessity of amplifying the capacity of R&D projects to promote innovation and practical application in the electricity industry (ANEEL 2021a). We investigate data provided in the ANEEL platform (ANEEL 2021b) to verify how many R&D projects are directly linked to digitalization initiatives. From 2008 to 2021, there were 2623 projects registered in ANEEL system, excluding those cancelled. We analysed the title of these projects, looking for keywords related to the digitalization process. The keywords were defined based on technologies discussed in item 2.1: smart; intelligence; IoT; digitalization; virtual; digital; 3D; internet; cloud; big data; wireless; reality; autonomous; cybersecurity; blockchain, and machine learning. We found 263 projects in which the title has at least one of the keywords. We also analysed these projects’ descriptions to ensure they are related

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Fig. 6.2 Total and digitalization R&D projects in ANEEL platform based on ANEEL (2021b)

to digitalization. This represents only around 10% of the total number of projects. Figure 6.2 shows the historical evolution of projects. In 2008, no digitalization project was found from the used criteria. In the rest of the period, the share of digitalization projects varied between 8 and 14% of the total, presenting certain stability over the historical series. Thus, it is impossible to stand that there is a tendency to increase or decrease participation in these projects. Figure 6.3 shows the theme classes of projects, and Fig. 6.4 shows the electricity sector segment of the digitalization projects. Most projects are related to the distribution segment. About 40 projects are linked to smart grid analysis, which is the segment with more projects. From Fig. 6.3, it is possible to note that digitalization analysis in R&D projects in Brazil is mainly related to grid operation. The Brazilian National Energy Planning for 2050 (PNE 2050),

Fig. 6.3 Theme classes of digitalization projects based on ANEEL (2021b)

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Fig. 6.4 Electricity sector segment of digitalization projects based on ANEEL (2021b)

launched in 2020 (EPE 2020), evaluates electricity sector segments’ digitalization evolution. The document states that the transmission segment is the only one in an advanced stage of digitalization. Generation, distribution, and consumption are still at the initial stage. Brazilian has a vast explored hydropower potential linked to a large, interconnected transmission system. This system is centrally operated by the National System Operator (in Portuguese ONS) to preserve the hydrothermal dispatch model and to take synergistic gains between the different hydrological regimes. Thus, ONS operation depends on information from the transmission system to link generation to load, which requires a high level of digitalization for quick and effective decisionmaking. Besides that, although the transmission system is large, connecting almost the entire national territory, it is not as branched as the distribution system, favouring its digitization to occur faster. Thus, although the distribution segment concentrates most of the digitization projects, much still needs to be done. According to PNE 2050, the next step for the distribution segment is complete automation to optimize the grid stability. Commercialization is the segment that is receiving the least attention. It has the least number of digitalization R&D projects and is not even being evaluated by the PNE 2050.

Conclusion The digitization process contributes to the energy transition by providing technologies that optimize the generation and efficient energy use, allowing greater penetration of renewables and better use of energy resources through integrating different

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sectors. However, as discussed in this chapter, the digitization process does require not only the use of digital technologies but also the restructuring of the market and regulatory models so that the use of these technologies is optimized, and the security of the digitization process is guaranteed. As presented, Brazil’s digitization of the electricity sector is still in its infancy. There is a lack of initiatives concerning technological and regulatory development for its further development. The participation of digitization in R&D projects is low and has not increased over the years. Despite advances in the transmission segment, Brazil has also not made significant progress in adapting market and regulatory models for the digitalization process. Energy commercialization has not received much attention either in R&D projects or in government initiatives. Even though there have been recent government initiatives to update regulations (e.g., the Brazilian Strategy for Digital Transformation, the National Internet of Things Plan, the National Cyber Security Strategy, and others), these initiatives have not yet resulted in major concrete structural changes. Thus, it is important for Brazil to speed up reforms to make the best use of digitization technologies, considering its vast potential for renewables and a highly complex electricity sector that could deeply benefit from a digitization process. Considering the global relevance of the energy transition process, the country can become an even greater benchmark for the renewable electricity sector if it knows how to structure it for digitization. Acknowledgements Stefania Relva and Vinícius Silva thank especially Conselho Nacional de Desenvolvimento Científico e Tecnológico, for the scholarship. This work was partially financed by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior. Maria Rogieri Pelissari thanks the financial support of grant Process 2019/07995-4 from the São Paulo Research Foundation (FAPESP) and the support from the Coordenação de Aperfeiçoamento de Pessoal de Nível Superior—Brazil (CAPES) (Code 001). All the authors thank the support of the RCGI—Research Centre for Gas Innovation, hosted by the University of São Paulo (USP) and sponsored by FAPESP—São Paulo Research Foundation (2014/50279-4 and 2020/15230-5) and Shell Brazil, and the strategic importance of the support given by ANP (Brazil’s National Oil, Natural Gas and Biofuels Agency) through the R&D levy regulation. Peyerl thanks the current financial support of grant Process 2017/182088, 2018/26388-9, FAPESP. Stefania Relva acknowledges the friend and engineer Felipe Oucharski who provide important reflections about the digitalization process in power engineering.

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Chapter 7

Regulatory Pathways for the Decentralisation of the Brazilian Electricity System Marcella Mondragon and Drielli Peyerl

Abstract Traditional electricity systems were built upon largely predominant centralised models. The growing energy demand and economic and environmental factors have led to the decentralisation of the electricity mix. Distributed generation is one of the main approaches to meeting a decentralised electricity system, and this book chapter investigates if distributed generation can be a vector of decentralisation of the Brazilian electricity supply. To carry out the analysis, the regulatory framework of the distributed generation market in Brazil based on the electricity regulator’s (ANEEL) normative and government incentives from 2004 to the present day is presented. The results revealed that former policies were responsible for the growth of distributed generation in the electrical mix and also suggested that new policies will be needed to ensure distributed generation’s growth sustainability in the long term. Keywords Energy transition · Decentralisation · Electricity systems · Distributed generation · Energy regulation · Brazil

Introduction In light of the global challenges of climate change, increasing greenhouse gas emissions, air pollution, the depletion of natural resources and political instabilities, the transition of energy systems has become a major challenge facing energy policymaking in many countries (Tolmasquim et al. 2020). Decentralised power generation is a key element of the energy transition process, resulting in new technologies and M. Mondragon (B) · D. Peyerl Institute of Energy and Environment, University of São Paulo, Av. Professor Luciano Gualberto, N° 1289, São Paulo, Brazil e-mail: [email protected] D. Peyerl e-mail: [email protected]; [email protected] D. Peyerl University of Amsterdam, Science Park 904, 1098 Amsterdam, Netherlands © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Peyerl et al. (eds.), Energy Transition in Brazil, The Latin American Studies Book Series, https://doi.org/10.1007/978-3-031-21033-4_7

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greater dynamism in the electricity sector (Relva et al. 2021). Also, a renewable-based decentralised generation can reshape the fossil-based energy structure, reducing environmental impacts and enlarging independence and societal dimension by entailing a civic choice for a low-carbon future (Lilliestam and Hanger 2016). The traditional centralised generation requires a significant upfront investment and has already been described as a source of disparity between supply and demand (Purohit 2009). However, to take advantage of the relatively low initial investment and gradually scale up the generation capacity of decentralised systems, energy planning must improve their integration into electricity grids (Dagnachew et al. 2017). In Brazil, the power system is based on centralised electricity generation, built initially to take advantage of the country’s substantial hydro potential, and energy auctions established a regulated procurement model to supply demand, secure investments, and diversify technologies (Paim et al. 2019). Initially, hydro and thermal power plants’ investment motivated the current hydrothermal dispatch model. Renewable sources started taking place in 2002 with the Alternative Sources Incentive Program (PROINFA) (Eletrobras 2002) and were later enhanced with the Reserve Energy Auctions creation in 2008 (de Castro 2008). Only after 2012, wind and solar power plants gain competitiveness in energy auctions (Tolmasquim et al. 2021). However, the growth rate of renewables was not enough to compensate for the hydropower generation and prevent the current electricity crisis, which is the 3rd crisis in the last 20 years and the 8th since 1924 (Hunt et al. 2018). In general, centralised markets are less flexible. Although it was the backbone of electricity expansion in Brazil, hydroelectricity dependence exposes the grid to a huge vulnerability to climatic conditions (Paim et al. 2019). In a drought scenario, the hydrothermal concept, besides increasing energy prices for all consumers due to generation from expensive thermal power plants (supposed to operate only in particular demand needs), also risks the security of the power supply (Bastos et al. 2018). Thus, after almost one century of facing cycling energy crises, a new decentralised model suggests a paradigm shift in how energy is produced, delivered, and consumed. When conceived based on renewable technologies, decentralised systems offer a clean and resilient approach towards reaching sustainability (Adil and Ko 2016). Also, as renewable sources penetrate the energy markets and become more affordable, society will gradually embrace decentralisation benefits such as offset capitalintensive investments for network upgrades, local energy independence, social capital motivation, and network security (Adil and Ko 2016). Decentralisation can emerge in different ways, and this chapter focuses on developing a decentralised energy system through distributed generation (DG) due to its growing representativeness worldwide (IRENA 2018). High penetration of DG units into the distribution networks is a suitable alternative to shield against the impacts of extreme weather events (Zhang et al. 2018), such as the frequent droughts affecting hydro reservoirs in Brazil. Also, the opportunity for local investors to participate in the generation expansion is a viable option to provide universal access to energy, introduce renewable technologies, diversify power supply, and reduce the necessity of future infrastructure investments (Abushamah et al. 2021; Batinge et al. 2019). However, the energy planning shift from largely centralised models to including

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multiple decentralised units implies adapting governance models and regulations to ensure overall electricity system reliability, access, and affordability (Goldthau 2014). The systemic institutional transformation necessary to support the widespread adoption of decentralised energy schemes is still being developed, and there is no ideal role model to follow (Moroni et al. 2016). Within this scenario, the chapter assesses the motivation behind decentralised energy systems and outlines the recent regulatory changes regarding the DG market in Brazil based on the electricity regulator’s (ANEEL) normative and government incentives from 2004 to the present day. Also, it brings an overview of the discussions regarding DG’s future legislation, enhanced after 2019. According to the main ideas exposed by energy policymakers, this chapter aims to provide information and contribute to the current debate regarding the future path of the Brazilian electricity system. The authors address this debate by answering the question: can DG be a vector of decentralisation of the Brazilian electricity generation mix? For this, section two will bring an overview of the electricity generation scenario in Brazil, focused on the energy planning approach in the past decades, the current framework, and the opportunities for DG development. Section three will explore DG evolution in the world and the undergoing actions that were taken in Brazil to prepare the system for energy decentralisation.

The Brazilian Electricity System and the Relevance of Decentralisation The organisational structure adopted by the Brazilian electricity sector began in the early twentieth century with the development of isolated transmission and distribution systems by private companies (Rego and Parente 2013). Following a political context of progress through a national orientation, from the 1950s on, the electricity chain was gradually controlled by the state and evolved into an integrated and connected network of generation plants, transmission, and distribution lines (Andrade et al. 2020). This period is known as the “golden age” for both capitalism and the electricity sector. It was a time when industry expanded in the function of economies of scale (Andrade et al. 2020). Like most Latin American countries, Brazil’s development strategies depended on foreign savings, especially through long-term foreign lending. The shock of international interest rates between 1979 and 1982, enhanced by the oil shock, led to increased external debt and chronic inflation rates in Brazil (Badeeb et al. 2021) (see Chap. 3). In the late 1980s, investments in power generation were restrained and put at risk the country’s energy supply (Sandhya and Chatterjee 2021). In 1996, after the wave of electricity market liberalisation around the world and a new political environment, the Brazilian electricity market went through its first reform oriented towards privatisation (Daglish et al., 2021). At the time, power generation facilities urgently needed expansion to supply the increasing energy demand (Tolmasquim et al. 2021). The reform set that electricity generation should become

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a competitive activity at the risk of the independent producers, with prices set by the market. To achieve this goal, ANEEL was created to regulate and supervise electricity generation, transmission, distribution, and sale following the federal government’s policies and guidelines (Andrade et al. 2020). However, the economic signal provided by the spot market in a hydro system with big reservoirs and practically zero cost of operation was too risky for investors who rely on it (Daglish et al. 2021). In 2001, with an installed capacity much behind energy demand growth, a drought period contributed to Brazil’s worst energy crisis leading to power rationing and a new market design in 2004 (Rego and Parente 2013). Aiming for an accurate investment environment and energy supply security, distribution companies were set apart in a regulated market to procure energy through energy auctions with longterm contracts to provide predictable revenue and support new projects financing (Tolmasquim et al. 2021). On the other hand, generators, energy traders, and big consumers could transact energy in the wholesale market (Tolmasquim et al. 2021). The centralised characteristic remained in terms of both generation and transmission units to preserve the hydrothermal dispatch model (Batlle et al. 2010). This means that when energy planners forecast energy demand and indicate the need to expand the system’s capacity, new centralised auctions take place to expand the system’s capacity. In theory, Brazil’s electricity centralised production and interconnected transmission should allow synergistic gains between the different hydrological regimes and secure energy supply (Hunt et al. 2018). Still, the 2001 rationing was not the last electricity crisis in the country. The systematic vulnerability of the Brazilian electricity sector was also noticed in 2015 (Leal et al. 2017) and 2021. Power supply risk is frequently associated with drought impact on hydropower dams. However, this is just a consequence of a series of structural gaps (Tolmasquim et al. 2021). The substitution of hydro plants with big reservoirs (that worked as huge energy batteries for the entire system) by smaller and variable sources (run-out-river and wind power plants), in addition to projects delay and dated operational information, created an optimistic (or unrealistic) operation forecast (Tolmasquim et al. 2021). Although auctions seek to mitigate supply risks by using a qualification process and performance bonds, there are still problems related to the structure and operation of the electricity market that are hazards to the guarantee of supply (Tolmasquim et al. 2020). The more diverse the energy generation sources, the more secure the electricity sector becomes (Kosai and Unesaki 2020). The lack of diversity in the sources of electricity supply poses a risk to generate stability and potential price volatility (Kosai and Unesaki 2020). Although energy planners have indicated the diversification of the Brazilian electricity grid in the following years, it is usually related to different types of energy sources such as renewables and not diversification of how electricity is produced (Bauknecht et al. 2020). In this manner, the decentralisation of the electricity sector with the shift from electricity generation in large power plants to DG sources is a strong candidate for the diversification of electricity sources (Kozhageldi et al. 2022; Pereira and Marques 2020) and has great potential in Brazil (Rigo et al. 2019). It can provide security by expanding generation capacity and a

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more economical option to decrease the total cost of investments in the electricity sector and reduce consumers’ carbon footprint (Abushamah et al. 2021).

Decentralised Energy Systems Electricity systems worldwide evolved in step with centralised fossil-based approaches to produce energy and constitute the original framework of modern energy services (Brisbois 2020). Since the Paris Agreement, many countries have implemented climate policies to accomplish their decarbonisation targets according to the pledge of Nationally Determined Contributions (NDC) (Carvalho et al. 2020). Most NDCs focus on changing the energy mix and modernisation the productive structure as a strategy to mitigate emissions (Giacomelli Sobrinho et al. 2020). Thus, as the electricity sector has a significant potential for decarbonisation due to the decreasing costs of renewable technologies, the landscape of the electricity supply portfolios in the world are evolving to decentralisation (Xu 2019). Although recent advances in renewable energy technologies allowed widespread decentralised electricity production, the idea behind decentralisation is not new. In the early days of electricity, grids based on direct current, low voltage and distance restrictions were constructed under a decentralised model (Adil and Ko 2016). Later, technological evolution and the emergence of alternated current grids allowed for electricity to be transported over longer distances, and economies of scale led to an increase in the generated power output. Massive electricity systems were constructed, consisting of huge transmission lines and large power plants, mainly operating from fossil fuel sources (Pepermans et al. 2005). Now, changes in the world’s economic and regulatory environment towards a low-carbon future are opportunities for a decentralised energy system to meet the world’s energy needs.

Distributed Generation as a Decentralisation Vector Even though there are different ways to achieve energy decentralisation, DG is the core component of a decentralised electricity system (ESCAP 2014). Five major factors impulsed the interest in DG in the past decade: (i) technology development; (ii) constraints on the construction of new transmission lines, (iii) increased customer demand for highly reliable electricity; (iv) electricity markets liberalisation and; (v) concerns about climate change (EIA 2002). Regarding this last factor, the diffusion of DG, especially from solar, has played a key role in achieving climate and energy policy goals and nowadays is considered the main driver of net-zero energy transitions (Doyob and Fisher 2021). DG is defined as electricity produced close to the load source and is structured in a decentralised and dispersed manner so that power is generated closer to the consumer (Tolmasquim et al. 2020). Consumer generates his own energy, becoming

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both the producer and consumer of electricity: the prosumer. Regarding connection to the grid, DG systems are tied to the medium or low-voltage segments of the grid or installed behind the metre at the consumer’s facilities (Pereira da Silva et al. 2019). While most common projects take advantage of solar resource, they can be designed from many technologies, such as engines, small turbines, and fuel cells, to operate under various renewable sources (EIA 2002). Apart from providing clean energy, DGs are gaining considerable attention to upgrade the resilience of the distribution system (Sandhya and Chatterjee 2021). DG offers many benefits to the grid, such as increasing energy stability, reducing dependence on traditional transmission systems, allowing for additional energy production at peak times, grid’s quality improvement, and gains for the local economy (BayodRújula 2009; Henriquez-Auba et al. 2021). In the end, all prosumers are beneficiated from reducing electric bills (Andrade et al. 2020). Additionally, it is essential to emphasise that on-site power production could also be used to sustain clean mobility solutions (i.e. electric vehicles) and support smart energy systems for both living and mobility needs (Zakariazadeh et al. 2014). To promote DG, many countries implemented support policies in early 2000. Designing market policies for the feed-in tariff (FIT) and quota obligation through green certificates worked as key elements for encouraging DG projects (Amaral et al. 2016). Gross FIT policy was particularly used for solar resources in the European Union. The major countries implementing this strategy are Germany, Austria, the Czech Republic, Spain, France, Holland, Italy, Portugal, and Switzerland (GarcíaÁlvarez et al. 2018). Gross FIT is based on a fixed-price contract determined by the public authorities to remunerate all electricity produced. In a similar context, a net metering system can be understood as a FIT policy, as it grants a reward (kWh remuneration or credits for future consumption) for the net electricity injected into the grid (García-Álvarez et al. 2018). On the other hand, green certificates with quota systems are based on the obligation of producers, distributors, or consumers to maintain a renewable quota set by the government and is a method used in Belgium, Poland, the UK, and Romania (Sarasa-Maestro et al. 2013). In the USA, they are usually known as Renewable Portfolio Standard (RPS). In this system, the market establishes the energy price, and it is mainly implemented by tradable green certificates representing its environmental benefit. This policy is well accepted by societies that do not want to absorb costs in the electricity tariff since FIT mechanisms can subside a portion of tariffs for DG producers (Sarasa-Maestro et al. 2013). Along with these market policies, government tax incentives and support for investment are also used to encourage DG projects (Amaral et al. 2016). Since the cost of capital is seen as the main barrier to development, these measures ease access to credit and reduce the tax burden for the initial capital. Although the world is looking to increase DG participation in the electricity grid, DG systems can enhance the electric system’s regulatory framework. Concerns about the growing costs of support policies and the allocation of these costs among prosumers and regular customers are issues faced in several countries (GarcíaÁlvarez et al. 2018; de Doyle et al. 2021). This issue is particularly relevant when

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considering that DG diffusion depends on both an adequate policy support framework as well as on an electricity distribution grid able to operate with high shares of variable DG. Thus, regulatory changes can be considered a necessary step in the path to a distribution sector suitable to the new electricity sector technological paradigm, characterised by the increasing decentralisation of electricity supply (Pereira da Silva et al. 2019). The governance choices made by accountable authorities now will define electricity systems for years to come. While there is widespread acceptance that the future of energy will be decentralised, there are different views about how such a system should be structured and governed (Brisbois 2020). Despite these challenges, the International Energy Administration (IEA) estimates that 179 GW of distributed solar were added globally in the last three years, led by China and the USA (almost half of the new installed capacity) (EIA 2002). In 2020, solar DG increased by 15.5 GW, representing a 32.16% share among off-grid and power plant capacities (IEA 2020). A similar share of 31.12% is seen for the cumulative installed capacity, and with the development of advanced conceptual models of operation of distributed energy systems, this participation will be even larger (IEA 2020).

Distributed Generation Development in Brazil The first DG concept in Brazil was created in 2004 with Decree 5.163 (Andrade et al. 2020). At the time, DG was considered as the electricity production from any authorised agent that directly connected the generation to the electric distribution system, except hydropower plants above 30 MW and thermal plants (Brasil 2004). DG projects were only connected to the grid if the distribution company directly preceded a public call hiring process, and the total amount of electricity that the distribution company could buy was limited to 10% of its load. Not surprisingly, this first regulatory framework did not motivate investments in DG. At the time, energy policy was still directed to large-scale dams for hydropower generation, and the common idea that Brazil already had a low-carbon electricity mix postponed the interest in a decentralised model (ANEEL 2010). Only after the international policy diffusion for DG and public pressure of energy stakeholders in the country, ANEEL open a formal process to discuss the possibilities for a more robust DG regulation and access to the distribution grid in 2010 (ANEEL 2010). While climate change was the driving force for DG policy in developed countries, diversifying the energy supply mix and avoiding infrastructure costs were more pronounced causes in Brazil and other Latin American countries (Gucciardi Garcez 2017). In 2012, a new legal act (Normative Resolution no. 482 from ANEEL) established ways for consumers to generate electricity for their own consumption using hydropower, solar, wind, biomass, or qualified cogeneration. These sources were chosen to align with existing incentivised sources under Federal Law 9.427/1996 (Gucciardi Garcez 2017). DG was then defined as a small-scale generation produced by a consumer from 100 kW to 1 MW and delivered to the electricity distribution

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company. Consumers could provide energy back to the grid via a net metering system and use it within 36 months. Still, the 2012 regulation did not reflect a relevant change for the DG scenario in Brazil (Amaral et al. 2016). In 2015, after a couple of years of suffering from low rains and unfavourable reservoir levels, interest in alternate options to generate electricity started to surge within energy planning studies (Paim et al. 2019), and a revision of the DG act took place (Normative Resolution no. 687 from ANEEL) (Andrade et al. 2020). Now, when exporting net excess electricity to the grid, consumers can use the produced energy within 60 months. Systems between 75 kW and 5 MW were eligible for net metering, where hydro plants could get up to 3 MW, and solar, wind, biomass, and qualified cogeneration could reach the 5 MW capacity limit. In 2017, the Normative Resolution no. 786 from ANEEL stated that all renewable sources and suitable cogeneration projects between 75 kW and 5 MW are eligible for DG (ANEEL 2012). As prosumers cannot sell the electricity surpluses from DG systems, it is unnecessary to register commercialisation contracts under the wholesale market (Andrade et al. 2020). Instead, operating licences are issued to the consumer, and regulation enables the exploitation of four “business models”: (i) local self-consumption; (ii) remote self-consumption, i.e. the transferring of electricity generation to another site owned by the same private individual or company; (iii) enterprise with multiple consumer units, which allows DG in condominiums; and (iv) the shared generation, through which legal or private individuals can create a cooperative (or a consortium) and install a DG system, sharing the electricity generation (ANEEL 2012). Thus, cooperative schemes can be used to leverage geographic diversity, enhance the utility of local renewable energy, and minimise the upfront investment (Rosa et al. 2021). Different business models have greatly evolved concerning economic and environmental sustainability for consumers, besides diversification and new opportunities for distributors and energy efficiency companies to aggregate value on their services. However, it is essential that policymakers also provide means for distribution companies to develop their network (Rosa et al. 2021). The regulatory framework’s evolution helped DG projects grow and become a protagonist in expanding the offer of electricity in Brazil. In 2020, the distributed solar source surpassed the expansion of all centralised sources (EPE 2020). Implementing a net metering system and clear rules offered a better environment for investments in DG. However, advances in ANEEL legislation were not the only actions to create this prosperous setting. Policies taken by the National Council for Farming Policies (CONFAZ) had repercussions on taxation support for DG. When the first DG regulation was created, taxes on electricity bills for prosumers were calculated considering the total amount of consumption, regardless of the electricity production (Andrade et al. 2020). From 2015 on, the State and Federal taxes Goods and Services Circulation Tax (ICMS), Social Integration Program Tax (PSI), and the Social Security Financial Contribution Tax (COFINS) were only calculated under the net consumption (difference between the energy consumed from the grid and the energy fed into the grid). The improvements on taxes for prosumers greatly impacted DG projects, with a growth of 235% from the policy change in April 2015 to the end of the same year (Amaral et al. 2016). In addition, specific financial loans for DG

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were given by the Brazilian Development Bank (BNDES) and the national public bank of Brazil, Caixa Econômica Federal, charging lower interest rates for citizens to finance their projects. Also, in 2015, the DG Development Program for Electric Energy (ProDG) was launched to stimulate DG growth in Brazil (Amaral et al. 2016). Expanding lines of credit for industries in the productive chain of DG to improve technologies, innovation, and human resource promotion were the program’s main actions. All these measures towards the growth of DG helped its progress in recent years. More than 127 thousand consumers currently produce their own energy, with a total capacity of around 1.6 GW, which represents 1% of the Brazilian electricity matrix (EPE 2020). Still, DG is expected to see higher growth, especially considering that Brazil has 84 million consumers connected to the grid and a high potential for solar generation. There is also a large potential for DG in the Southeast region of the country from biomass, such as residues from livestock, as well as sugarcane bagasse. In addition, the South region has a great potential for wind generation, biogas from pig farms and wastewater treatment plants, and biomass from agriculture residues (Udaeta et al. 2019; Hunt et al. 2018). In opposition, there are still barriers to achieving DG success, mainly associated with the country’s infrastructure condition, such as the lack of national production of PV modules and expensive and slow logistics to spread the PV system to distant cities (Rigo et al. 2019).

The Future of DG in the Brazilian Electricity Grid For the past couple of years, political agents have been trying to deliberate DG development and the necessary measures to allow its sustainable expansion (ANEEL 2016). However, DG holders pay a unitary tariff (R$/kWh) in the electricity bill. Indeed, tariffs are divided into two portions: energy (commodity—R$/kWh) and distribution service (infrastructure—R$/kW) (ANEEL 2016). The net metering system allows the prosumer to compensate for its electricity generation considering the unitary tariff (energy + service). Consequently, the more consumers install DG units, the more expensive tariffs will get for the rest of the consumers. In a scenario with a high share of DG, the traditional regulation model should adapt its compensation schemes. Otherwise, it can lead to cost allocation distortions, demanding regulatory adjustments that promote a better allocation of costs between users with and without DG. This distortion has been the main topic of debate between ANEEL, energy stakeholders and society (ANEEL 2021). For this reason, in August 2021, the Chamber of Deputies approved Bill No. 5.829/2019, which establishes some changes in the DG framework. If approved by Congress, net metering compensation will have to pay 50% of the service portion of the tariff. There will be a 30-year transition period in which DG holders who had requested access to the grid until March 2020 will still have a 100% discount (Câmara 2019). Meanwhile, the service costs incurred by the distribution companies

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will be funded by the Energy Development Account (CDE), which is an item placed in all electricity bills for all the consumers in the country (Câmara 2019). Other ongoing actions could impact the tariff structure for DG owners. The Ministry of Mines and Energy study on the tariff structure modernisation for lowvoltage consumers, including binomial and hourly tariffs, is in the regulatory schedule 2021–2022 of ANEEL. However, there is still no prediction for changes. The Bill Project 232/2016 is already approved in the Senate and is currently being processed in the Chamber of Deputies. The project states that the binomial tariff must be implemented within 60 months after the Bill approval. In applying a binomial tariff model, some components of the tariffs would be charged regarding the demand (kW) instead of the whole energy tariff (kWh), affecting DG projects’ attractiveness. This would do away with cross-subsidies, where consumers without DG units effectively cover the costs of access to the grid for the prosumers. While some consider it should not be an obstacle for future projects, knowing that equipment prices are decreasing fast (the cost of the photovoltaic module reduced by approximately 76% between 2012 and 2020) (Bezerra 2021), (de Doyle et al. 2021) shows that there is a statistically significant reduction in economic viability for solar DG units when the new regulation proposed is enacted. Aside from the uncertainties, the Brazilian Energy Research Company (EPE) developed five different scenarios for DG growth. Even in the worst case, the installed capacity is expected to increase from 1.6 to 22.8 GW in the next 30 years, from which 97% will come from solar sources (EPE 2021). The latest energy planning study from EPE (EPE 2020) acknowledges the benefits established by the insertion of DG; however, they argue that uncertainties about DG adoption will demand new planning practices for the expansion and operation of the entire electricity grid. Furthermore, EPE undertakes that DG projects are already competitive without incentives or support policies. In case of reduction of investments in DG, greater centralised generation will overcome to attend the necessary electricity demand and, as centralised expansion tends to materialise through renewable sources such as wind and solar photovoltaic, the generation portfolio would remain its renewable character (EPE 2020). Thus, it is noteworthy that decentralisation for energy policymakers in Brazil is mainly motivated by an economic return, despite the many benefits exposed in this chapter and the urgent need to diversify the Brazilian generation mix.

Conclusion Energy planning in a transitioning world towards low-carbon politics and the growth of renewables is a real challenge that meets underlying technological infrastructure and its various dimensions, which can be organised in a centralised or decentralised system. Although the DG market is still early in Brazil, regulation and governmental policies were important drives to the growth of DG among the abundance of renewable resources and recent technological and cost improvements. Brazil is currently facing the negative consequences of its centralised model, DG can, in fact, be a

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vector of decentralisation of the Brazilian electricity generation mix. Besides, energy decentralisation is an essential approach to enhancing the creation of jobs, exploring environmental benefits through different geographical regions, and providing energy access and grid security. Still, the Brazilian government must consider some changes in the regulatory and institutional framework aligning planning practices for DG expansion and operation of the electricity grid to ensure overall electricity system reliability and access. Information, communication, and control infrastructures will be needed with the increasing complexity of system management. In addition, as a sustainable solution to mitigate the cross-subsidies impacts without reducing economic viability and investments, Brazilian policymakers stimulate mechanisms such as the energy certificates applied in other countries. Acknowledgements All the authors gratefully acknowledge support from SHELL Brazil and São Paulo Research Foundation (FAPESP) through the Research Centre for Greenhouse Gas Innovation (RCGI) (FAPESP Proc. 2014/50279-4 and 2020/15230-5), hosted by the University of São Paulo, and the strategic importance of the support given by ANP through the Research & Development levy regulation. Mondragon thanks the financial support of grant Process 88887.637215/2021-00, CAPES. Peyerl thanks the current financial support of grant Process 2017/18208-8, 2018/26388-9, FAPESP.

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Chapter 8

Brazilian Natural Gas as a Low-Carbon Energy Transition Resource Lauron Arend, Yuri Freitas Marcondes da Silva, Stefania Gomes Relva, and Drielli Peyerl

Abstract This chapter discusses the role of natural gas as an energy transition resource to a low-carbon economy in Brazil. To this end, the country’s natural gas infrastructure and market are analysed. The national energy plan produced by the Brazilian Energy Research Enterprise (Empresa de Pesquisa Energética, in Portuguese) is also evaluated, mainly regarding the perspectives for demand and consumption of natural gas in the country for the next decade. The production of renewable versus non-renewable energy in Brazil is also discussed, seeking to identify how the increase in demand and natural gas production impacts this relationship. The country has a perspective of increasing both production and demand for natural gas for the next decade. However, market and infrastructure barriers have been restraining the internal use of natural gas and increasing external dependence because of the greater demand. This increase in natural gas demand has been caused mainly by the electricity sector. It is justified by the need to obtain more energy and not replace other, more carbon-intensive resources. In terms of production, the outlook is Brazil becoming a growing producer of non-renewable energy because of increased exploration of oil and gas fields. Finally, Brazilian natural gas can be understood as L. Arend (B) · D. Peyerl Institute of Energy and Environment, University of São Paulo, Av. Professor Luciano Gualberto, n° 1289, São Paulo, Brazil e-mail: [email protected] D. Peyerl e-mail: [email protected]; [email protected] Y. F. M. da Silva Department of Geography, Faculty of Philosophy, Languages and Human Sciences (FFLCH), University of São Paulo, Av. Professor Lineu Prestes, n° 338, São Paulo, Brazil e-mail: [email protected] S. Gomes Relva Energy Group of Department of Energy and Electrical Automation Engineering of the Polytechnic School, University of São Paulo (GEPEA/EPUSP), Av. Professor Luciano Gualberto, Travessa 3, n° 158, Prédio da Engenharia Elétrica, São Paulo, Brazil e-mail: [email protected] D. Peyerl University of Amsterdam, Science Park 904, 1098 Amsterdam, The Netherlands © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Peyerl et al. (eds.), Energy Transition in Brazil, The Latin American Studies Book Series, https://doi.org/10.1007/978-3-031-21033-4_8

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an element of the transition to a low-carbon economy from four perspectives (i) as a guarantor of the security of electric supply in a context of increased participation of variable renewables; (ii) as a substitute of more carbon-intensive resources, mainly in the industry; (iii) as an energy source exported for international energy transition, being used in countries whose energy supply mix has a high carbon footprint, and, (iv) as input for hydrogen production. Keywords Natural gas · Energy planning · Low-carbon energy transition · Brazil

Introduction Climate change and the concerns about its effects have generated a commitment to reduce the emission of greenhouse gases, mainly CO2 (EPE 2020a). This restriction causes impacts on the energy chain, forcing the global market to readjust and develop clean and low-carbon energy systems to decarbonize a large part of the world energy system (United Nations 2015). For this to occur, renewable energy sources need to be increasingly developed. However, it is also important to use energy sources and technologies capable of dealing with the intermittence of renewable sources (EPE 2020a). Natural gas (NG) is considered the fossil energy source with the lowest carbon emissions (Zhang et al. 2018). Therefore, NG has been seen as a possible transition fuel for a low-carbon economy. Besides the low emissions—compared to other fossil fuels—this energy resource also has a well-established infrastructure in several countries, affordable prices in the world market, and low costs for adapting industrial facilities to substitute more carbon-intensive resources such as fuel oil in Brazil (EPE 2016). In the past, NG used to be consumed only in the region where it was produced due to high logistical costs (dos Santos 2019). However, the development of the liquefied natural gas (LNG) market has provided a more flexible transport mode, enabling long-distance trade and contributing to global liquidity and integration of NG markets worldwide (Zhang et al. 2018). There are several international scenarios in which NG plays a relevant role in boosting energy transitions (FGV 2019). According to FGV (2019), NG already accounts for 24% of global primary energy. In Brazil, the NG market has been developed for at least twenty years, with an infrastructure of gas pipelines installed mainly along the coast and with an annual increase in the production of this energy source mainly due to the exploration of the pre-salt fields (Dassunção and Moutinho dos Santos 2015). Thus, this chapter discusses whether NG can be considered an energy transition resource in the Brazilian energy supply mix. For this, the Brazilian’ NG infrastructure and market are analysed, plans and forecasts for the next decade of NG use and production are discussed, and the need to release the large national gas reserves is evaluated. This chapter is divided into five sections. In Section “Brief Remarks on Natural Gas Development in Brazil”, the development of NG in Brazil is briefly discussed. In Section “Supply and Demand for Natural Gas in Brazil”, Brazilian actual offers and

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demands and the existing NG infrastructure are discussed. Section “The Future of Natural Gas in Brazil presents the projections of the Brazilian Energy Research Enterprise (Empresa de Pesquisa Energética, in Portuguese)—the governmental institution responsible for indicative energy plans in Brazil (EPE)—the use and production of NG for the next decade are presented. Section “Energy Transition in Brazil and the Role of Natural Gas”, based on the discussions of previous sections and the possibilities for the role of the NG as a transition element in the country, is identified and discussed. Finally, in Section “Conclusions”, the conclusions are presented.

Brief Remarks on Natural Gas Development in Brazil In Brazil, NG has a trajectory as long as oil if we consider the discovery of both resources (Peyerl 2019; Fraga et al. 2020). However, the concentration of government efforts in the search for reserves and expansion of the oil market relegated gas to a secondary role in the country for most of the twentieth century, when the NG was introduced with punctual and spaced experiences, as examples: in urban activities and petrochemicals in Recôncavo Baiano—Bahia State and Rio de Janeiro—Rio de Janeiro State (Barbosa and Peyerl 2020; Fraga et al. 2020). This scenario began to change in the 1980s, with the first public policies focused on NG. The National Plan for NG (PLANGAS), instituted in 1987, aimed to increase participation in the Brazilian energy supply mix, establishing that by the year 2000, NG should represent 10% of the energy supply (Peyerl et al. 2020). Although the goal was not achieved, the plan allowed unprecedented visibility of the NG issue in the country (Moutinho dos Santos et al. 2002). The Brazilian gas industry only started to develop effectively after the inauguration of the Bolivia-Brazil Gas Pipeline—GASBOL in 1999, when it was possible to make gas available in large quantities for the national industry and generate electric energy, providing the expansion of the market (EPE 2017). The pipeline was initially designed to integrate the Bolivian gas fields with the Brazilian consumer market, mainly aiming to meet industrial demand; however, the project’s scope was expanded based on plans to intensify the use of natural gas in thermoelectric generation in Brazil (EPE 2017). Since the GASBOL development, the supply of NG in Brazil went through diversification of sources, including Bolivian imports and domestic post-salt production, pre-salt production, and the addition of the import player of LNG (Arend et al. 2019b). Regarding the demand, according to the Brazilian Ministry of Mines and Energy, the use is primarily made up of industry (23.7%) and thermoelectric generation (34.7%) (EPE 2021a). Currently, the increase in NG consumption is mainly related to the electricity generation sector. In 2018, NG already represented 8% of the total installed capacity of the National Integrated System (EPE 2018a). In addition, from 2011 to 2020, the NG went through a broad regulatory review that remains in the process of establishment or progress in the National Congress (Costa et al. 2020).

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Therefore, the following section details the governmental perspectives for using and producing NG in Brazil for the next decade.

Supply and Demand for Natural Gas in Brazil The share of NG in the Brazilian energy supply mix is formed by the domestic production of post-salt and pre-salt, by imports via the Bolivia-Brazil gas pipeline, and by import in the LNG format from several countries such as Nigeria, Trinidad and Tobago, the USA (Arend et al. 2019a, b). The NG imports through international pipelines are carried out by the three pipelines operating in Brazil. GASBOL supplies the national integrated network and is directed to the consumption of various economic sectors in the south and southeast regions. The Lateral-Cuiabá Gas Pipeline supplies the Governador Mário Covas Thermoelectric Power Plant (MT) with 480 MW installed capacity. There is also a gas pipeline from Argentina, which feeds the Uruguaiana Thermoelectric Power Plant (640 MW) in the State of Rio Grande do Sul (EPE 2021b). Regarding the Bolivian NG, after 20 years of its implementation, many companies, in addition to Petrobras, are interested in the purchase, even if we consider the political risk of Bolivia, which could lead to problems in supply (dos Santos 2019). However, since NG has a high representation in Bolivia’s GDP (Gross domestic product), this risk of shortage is low. The new NG supply contract was signed between Petrobras and TBG at the end of 2021, effective from January 2022. A 4-year supply was agreed upon (2022–2026), in a volume of up to 20 million m3 /day of NG, with the possibility of private companies contracting the remaining 10 million m3 /day of NG from the pipeline’s import capacity (EPBR 2021). GASBOL is currently in a new contracting model phase of its capacity, which has been going through several public calls for specific periods and volumes in which private companies have had the opportunity to participate. Regarding LNG imports by regasification terminals, there are five terminals in Brazil. These terminals are located in Pecém (Ceará State), in Todos os Santos Bay (Bahia State), in Guanabara Bay (Rio de Janeiro State), and in the State of Sergipe (EPE 2021b). In the last one, the CELSE-SE terminal is directly connected to a thermoelectric power plant (TPP) Porto Sergipe I (1515 MW), which started operating in 2020, being the first private LNG terminal in Brazil (GIIGNL 2021). The most recent terminal to start operating is in Porto do Açu (Rio de Janeiro state), which began to produce energy at the end of 2021. Other terminals are planned in Pará and Santa Catarina states (EPE 2021b). Concerning domestic production, data from ANP (2020) point out that in 2018, Petrobras remained the concessionaire that produced the most NG: 73.5% of participants in the total. In the same year, Brazil was in the 31st position in the world ranking of NG producers: 32.4 billion of m3 of associated gas were produced, with the state of Rio de Janeiro being the largest producer, representing 61.4% of national

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production, regarding non-associated NG production, the volume was 8.5 billion of m3 in 2018 (ANP 2020). Regarding physical structures related to NG, until December 2018, the national transport pipeline network had a total length of just over 9400 km (EPE 2020b). In addition, Brazil has 29 NG Processing Units (NGPUs) (EPE 2020b). Figure 8.1 presents the current map configuration and those expected to operate in the short term for the Brazilian NG supply chain infrastructure. Furthermore, there are under construction, the NG Processing Pole of the Petrochemical Complex of Rio de Janeiro—COMPERJ; and the 83.2 km long gas pipeline stretch Horizonte—Caucaia (Ceará state), which is part of the original project of the Serra do Mel—Pecém—GASFOR II, located in the Northeast Region (EPE 2020b).

Fig. 8.1 Regasification terminals in operation and project in Brazil, with some of the anchor projects highlighted, Thermoelectric Power Plants and gas pipelines (commissioned or not). Source Prepared by Luís Guilherme L. Zacharias based on EPE (2018b, c, 2019b, c)

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Fig. 8.2 Potential offer of natural gas in the national integrated network. Source Prepared by the authors based on EPE (2021b)

By mapping all the modes that make up the national NG supply chain, it is possible to analyse the government’s projection of NG supply in Brazil for the next decade (see Fig. 8.2). It is estimated that NG production will reach 175 million m3 /day, with the need to import 70 million m3 /day, to meet the projected national consumption. In this way, NG will represent 15% of the national energy supply mix (EPE 2021b). According to EPE’s projections, the total supply of NG in the nationally integrated grid for 2021–2030 will have relatively slow growth. Potential supply remains practically stable over the first half of the study horizon, increasing between 2026 and 2030 due to higher volumes of associated and non-associated NG from offshore production. Throughout the study horizon, there is an increase in the national production of associated gas, mainly from the pre-salt, whose contribution reaches a level above 65% of the national supply in 2024 and drops to around 45% in 2030 with the increase in production from the SEAL Basin. In addition, to a reduction in NG imports via pipelines, essentially from GASBOL (EPE 2021b). 2021–2030 projects a gradual increase in the total supply of NG in the integrated grid, from around 150 million m3 /day in 2021 to approximately 180 million m3 /day in 2030, a 20% magnification (EPE 2021b). Regarding demand, EPE (2021b) separates into four categories: i. thermoelectric demand, comprising the supply of TPP; ii. non-thermoelectric demand comprising the industrial, residential, commercial, and transport (compressed NG) sectors; iii. refineries and nitrogen fertilizer factories (FAFENs); and iv. system-use gas (consumed in compression stations and heaters in transport pipelines).

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Fig. 8.3 National natural gas demand forecast for the next decade (2021–2030). Prepared by the authors based on EPE (2021b)

Figure 8.3 presents the estimated demand by category until 2030. The non-thermoelectric demand will have, according to the EPE projection, a timid growth, going from about 50 to 70 million m3 /day; however, this will represent a 10% drop in the share of total demand for NG as a result of increased thermoelectric demand. Thermoelectric demand has been an essential complement to hydroelectric generation since early 2000 (EPE 2021c). Recently, there have been changes in the NG offer options for TPPs. The supply options for the electricity sector were restricted to Petrobras for several years and now are being diversified, which led to the development of different business models, such as the implementation of TPPs associated with private LNG terminals, generation with Reservoir-to-wire onshore NG and more recently, using pre-salt NG from independent producers (EPE 2020b). In EPE projections, the TPPs maximum demand shows a reduction of about 18% between 2023 and 2025 due to the termination of the existing UTEs contract, showing a resumption from 2025 to 2030 associated with re-contracting or contracting new and more efficient TPPs. It should be noted that this scenario may change if new demands or complete isolated systems are connected to the integrated network through gas pipelines or if there is a final investment decision for new large-scale projects (EPE 2019a).

The Future of Natural Gas in Brazil According to the National Confederation of Industry (CNI), in conjunction with the Brazilian Association of Large Energy Consumers—ABRACE (CNI and ABRACE 2018), Brazilian consumption of NG grew by an average of 12.4% in the period from

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2011 to 2015. However, in this same period, the supply of NG from national reserves was insufficient to meet demand, leading to average growth of imports in this period of 15.8%. This scenario generated, in 2018, a dependence of about 50% on the total supply of gas in the country, leading to questions from energy sector planners and state and private operators about the risks that this import dependence would entail for security, diversity and affordability of NG-dependent sectors in the country (CNI and ABRACE 2018). EPE (2021c) considers that the “New Gas Market” program, a new NG regulatory framework, creates favourable market conditions, increasing NG supply and demand, as shown in Fig. 8.4. In the Brazilian scenario, there are 37 NG TPPs, of which three are powered by LNG, being TPP Santa Cruz (Rio de Janeiro state) with 500 MW, TPP Luiz Oscar Rodrigues de Melo (Espirito Santo state) with 205 MW and more recently TPP Porto do Sergipe I (Sergipe state) with 1550 MW. Porto do Sergipe I is the first project implemented in Brazil where a large consumer, such as a UTE, purchases NG directly from a supplier other than Petrobras and consumes it directly at its unit without the need for interaction with another agent, neither for transport or distribution (EPE 2021c). The Ten Year Energy Expansion Plan 2031 (EPE 2021c) indicates a total of 60 GW of expansion in electricity generation, with 28 GW of fossil fuels divided into 7 GW, possibly coal and 21 GW, possibly LNG, with projects on the Brazilian coast, which would represent a daily consumption of NG of approximately 210 MM m3 /day, far beyond the current Brazilian capacity (EPE 2021c). Thus, the expansion of gas use in Brazil is anchored by TPPs; however, this electric sector demand can create the opportunity for a secondary market around the TPPs. The NG network’s ampliation can promote the local distributor’s connection. Even in

Fig. 8.4 Projection of natural gas supply and demand in the National Integrated Network. Source Prepared by the authors based on EPE (2021b)

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the case of projects far from the existing pipeline networks, these can generate a new network exclusive to their surroundings and, thus, develop the region with previously unfeasible industrial and commercial opportunities. Figure 8.4 presents the balance between NG supply and demand for the next decade, according to EPE’s projections. The NG demand projection was calculated by adding the non-thermoelectric demand projections to the thermoelectric demand projections. Figure 8.4, compared to Fig. 8.2, shows that LNG will play an essential role in meeting the increase in thermoelectric demand in Brazil. The diversity of the Brazilian electrical supply mix has been encouraged by several authors for some years, as mentioned by Moutinho dos Santos (2002), which points to the need to make the supply of NG more flexible according to the particularities of Brazilian gas consumption. And with that, adding new advantages to internal transport in the country, using the operational flexibility of the LNG chain to meet mainly the NG demand in the Northeast region of Brazil. The non-conventional means of gas transport are a solution for NG supply flexibilization in Brazil, such as the NG transportation by truck, cabotage ship or train, these means of locomotion use Compressed Natural Gas (CNG) or LNG technology. Although these modes of transport do not have the movement capacity of a conventional gas pipeline, the interest in their development can be explained by several factors, such as the lack of investment and the difficulties in constructing new gas. These difficulties can be of a logistical scale (areas far away from the existing gas pipeline network), commercial (regions with low consumption of NG) or geographic (isolated locations). To get around these issues, investors in the gas market are looking for alternative means of transport, guaranteeing the service of areas not served and not targeted by gas pipelines (Fraga et al. 2020). However, according to Fraga et al. (2020) and Liaw et al. (2020), these projects can still be considered modest given the potential that these forms of NG movement present, some of these projects run into difficulties, such as the lack of infrastructure, ranging from a railroad to a waterway, in addition to roads that do not allow the transport of large loads via truck. Despite the Brazilian logistical bottlenecks, we can highlight some national projects for NG supply by trucks and cabotage ships, as in the case of the isolated system operated by the company Eneva in the states of Maranhão and Amazonas (Gomes 2019). The company plans to launch a project using trucks with cryogenic tanks transporting LNG from the Azulão field in the state of Amazonas to the city of Boa Vista in the state of Roraima to supply the 126 MW UTE Jaguatirica II (EPE 2010; Fraga et al. 2020). Since this project is not connected to the national electricity grid, nor the large gas grid, it is considered an isolated system project, which is necessary mainly in the northern region of Brazil. In this region of the country, we can also highlight the Itacoatiara LNG regasification terminal project (Amazonas state), which seeks to enable a gas movement system via cabotage vessels in the Amazon region, aiming at supplying several cities and isolated villages, replacing the use of diesel in electricity generation and the use of firewood in domestic cooking (EPE 2019c). Another project already under development since 2006 is Gemini, a joint venture between state-owned Petrobras and the company White Martins, located in the state of São Paulo, which transforms NG into LNG and distributes it to consumers

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in the region by trucks (Costa et al. 2020). This pioneering project in Brazil innovated legal action by confronting many of the legislative principles related to NG distribution concessions (Costa et al. 2020).

Energy Transition in Brazil and the Role of Natural Gas

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This chapter showed that Brazil has come a long way to expand and consolidate its gas market. The country has a perspective of increased production and demand for NG. However, market and infrastructure barriers have been restraining the internal use of NG, increasing external dependence because of the greater demand. This increase in demand has been mainly linked to the electricity sector due to the reduction in the proportional capacity of hydroelectric energy to supply the demand. According to energy balance data (EPE 2021a), in 2020, 65.2% of the national electricity came from water sources, and 10.5% came from solar and wind sources. In 2009, hydroelectric energy represented 76.9% of the energy supplied, wind energy only 0.2%, and solar energy 0% (EPE 2021a). Figure 8.5 shows Brazil’s history of electricity production from renewable sources, NG, and other non-renewable sources. The share of non-renewable sources in the Brazilian electricity supply mix was around 6% in the 1990s, reaching 27% in 2014. From 2012 onwards, NG has been responsible for about 50% of non-renewable electricity generation in Brazil (EPE 2021a). It is important to note that specific policies to reduce the use of carbonintensive sources in the Brazilian energy mix have not been effective. In 2022, for example, Law nº 14,299 was enacted (Presidência da República 2022), which extends the contracting of the Jorge Lacerda coal-fired thermoelectric complex (857 MW) in the state of Santa Catarina until 2040 (Marcondes et al. 2022). Therefore, even 700 600 500 400 300 200 100 0

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Fig. 8.5 Electricity generation in Brazil based on BEN. Source Prepared by the authors based on EPE (2021a)

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Fig. 8.6 History of primary energy production in Brazil. Source Prepared by the authors based on BEN (EPE 2021a)

though there is a reduction in the use of fuel oil since 2014,1 the increase in the use of NG is mainly justified by the need to obtain more energy and not replace the use of other more carbon-intensive resources. Thus, this conjuncture of factors—greater demand for energy, reduction of the relative capacity of hydroelectric generation to supply the demand and the increase in the use of variable renewable sources—justifies the need to increase the use of NG in the electricity supply mix as a resource to guarantee the supply security and not as a substitute resource for more carbon-intensive sources. It is essential to highlight that, in the Brazilian case, the increase in the use of NG increases the total emissions of the electrical system since the country already has a clear electricity supply mix. From the point of view of Brazil as an energy producer, what has been observed is the increase in the generation of non-renewable primary energy, mainly through the exploration of oil and gas fields discovered in recent decades. Figure 8.6 shows the history of primary energy production in Brazil. From 2000 onwards, non-renewable sources make up more than 50% of production. Figure 8.7 clarifies that other non-renewable sources, such as coal and uranium, have a very low share of energy production in Brazil. As shown in the previous section, with the predictions of increasing production in the pre-salt layer, the perspective is that Brazil will become a growing producer of non-renewable energy. It is also important to note that new gas reserves were recently found in the northeast region and that Brazil continues to hold several biddings for exploratory blocks (EPE 2020c). Thus, in the coming years, Brazil will need to develop further its infrastructure linked to the gas sector to meet the demands of the electricity sector and isolated systems and provide a flow for a large number of resources that will be explored. In this sense, besides supplying domestic demand, two other paths can be designed for the destination of Brazilian gas production: i. supplying the foreign market via LNG (Arend et al. 2022), contributing to the energy transition at an international level; and, 1

According to data from the National Energy Balance.

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Fig. 8.7 Participation of oil and gas in the production of primary energy from non-renewable sources in Brazil. Source Prepared by the authors based on EPE (2021a)

ii. the use of NG as an input to produce hydrogen. NG can be an input for the production of (i) grey hydrogen, which is produced without the use of carbon capture, utilisation and sequestration (CCUS) technologies; (ii) blue hydrogen, which is produced using CCUS; and (iii) turquoise hydrogen, which is produced by thermal cracking of methane, without generating CO2 (Ferreira et al. 2021). The grey hydrogen technological route is currently the most competitive and dominant. Although the production of this class of hydrogen is not clean and may, in the future, be surpassed by the production of green hydrogen (produced via water electrolysis based on renewables), it is today the most competitive and can be seen as the technological basis for the development of a low or zero-carbon economy (Ferreira et al. 2021). In this sense, NG can be understood as the facilitator of the transition to a phase dominated by green hydrogen (Ferreira et al. 2021) (see Chap. 10).

Conclusions The projections defined by EPE point out the Brazilian NG market growth, mainly in the electricity sector. In this sense, an energy supply mix with a greater share of gas is expected, which will come from a portfolio of diversified sources. If the country lacked a diversity of NG sources in the first decade of the twenty-first century, today, there are at least four primary sources, national and imported. The national NG still has several obstacles to commercialization and transport, which increases the Brazilian dependence on imports of the resource. Thus, Brazil needs to develop the NG sector infrastructure further so that it is possible to meet internal demands and give vent to the increase in production. Regarding energy demand, NG in Brazil can be seen as a transition fuel to a lowcarbon system from the point of view of promoting the security of electric supply

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in the context of increasing participation of variable renewables. However, from what has been observed so far, NG has not played a leading role in replacing more polluting resources, at least not in the electricity sector. As the burning of NG does not present residues of incomplete combustion or metallic and sulphur oxides, it is less aggressive to the environment and becomes a less polluting option than other fossil resources to overcome the water crisis in the national electricity supply mix and to ensure the security of supply. Besides, the expansion of the infrastructure of the NG sector, induced by this demand from the electricity sector, can create the opportunity for a secondary market serving the industrial sector, which can lead to the replacement of more polluting resources by NG in industries. Regarding energy production, Brazil has increasingly positioned itself as a producer of non-renewable energy and may increase its participation in the international market in the coming years. In this sense, Brazilian NG can play an important role in the global energy transition process, placing Brazil as an exporter of NG so that it can be used as a replacement fuel in countries whose energy supply mix has a high carbon footprint or as a major producer of hydrogen. Acknowledgements All the authors gratefully acknowledge support from SHELL Brazil and São Paulo Research Foundation (FAPESP) through the Research Centre for Greenhouse Gas Innovation (RCGI) (FAPESP Proc. 2014/50279-4 and 2020/15230-5), hosted by the University of São Paulo, and the strategic importance of the support given by ANP through the Research & Development levy regulation. Peyerl thanks the current financial support of grant Process 2017/18208-8, 2018/263889, FAPESP. This work was partially financed by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior.

References ANP (2020) Anuário Estatístico Brasileiro Do Petróleo, Gás Natural e Biocombustíveis 2020. http://www.anp.gov.br/arquivos/central-conteudos/anuario-estatistico/2019/2019-anuarioversao-impressao.pdf Arend L, Fraga DM, Moutinho dos Santos E, Peyerl D (2019a) Assessment of natural gas market in the United States and potential exportations of liquefied natural gas to Brazilian market. In: 7th Latin American energy economics meeting, Buenos Aires Arend L, Peyerl D, Moutinho dos Santos E (2019b) Análise de Viabilidade Financeira de Importação de Gás Natural Liquefeito Dos Estados Unidos Como Fonte de Suprimento de Gás Natural Para o Brasi. In: Seminário Internacional Territórios Da Energia, Mudanças Climáticas e Sustentabilidade Da Macro Metrópole Paulista, São Paulo Arend L, Marcondes da Silva YF, Arendt C, Moutinho dos Santos E, Peyerl D (2022) Prospects and challenges of the liquefied natural gas market in Brazil Perspectivas e Desafios Do Mercado de Gás Natural Liquefeito No Brasil Perspectivas y Desafíos Del Mercado de Gas Natural Licuado En Brasil, pp 1–21 Barbosa MO, Peyerl D (2020) Natural gas associated with the energy transition and the decentralization of energy generation in Brazil. In: Moutinho dos Santos E, Peyerl D, Netto ALA (eds) Opportunities and challenges of natural gas and liquefied natural gas in Brazil. Letra Capital, Rio de Janeiro CNI, ABRACE (2018) Gás Natural: Mercado e Competitividade. https://static.poder360.com.br/ 2018/06/28-GAS-NATURAL-ELEICOES-2018.pdf

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Ferreira TVB et al (2021) Bases Para a Consolidação Da Estratégia Brasileira Do Hidrogênio. Nota Técnica 34. https://www.epe.gov.br/sites-pt/publicacoes-dados-abertos/publicacoes/Public acoesArquivos/publicacao-569/Hidrogênio_23Fev2021NT(2).pdf FGV (2019) Novo Mercado de Gás Natural. https://static.poder360.com.br/2019/04/FGV-Semina rioGasEnergy-29.abr_.pdf Fraga DM, Peyerl D, Moutinho dos Santos E (2020) Small-scale compressed and liquefied natural gas distribution systems. In: dos Santos EM, Peyerl D, Netto ALA (eds) Opportunities and challenges of natural gas and liquefied natural gas in Brazil. Letra Capital, Rio de Janeiro, pp 92–116 GIIGNL (2021) GIIGNL annual report 2021 Gomes I (2019) Novo Mercado e Impactos Nos Preços Do Gás. Boletim Energético Julho 2019, pp 60–66 Liaw C, Netto ALA, Moutinho dos Santos E (2020) Natural gas new expansion frontiers: the smallscale supply throughout Brazilian railway. In: Moutinho dos Santos E, Peyerl D, Netto ALA (eds) Opportunities and challenges of natural gas and liquefied natural gas in Brazil. Letra Capital, Rio de Janeiro, pp 117–142 Marcondes YF, Netto ALA, Peyerl D, Moutinho dos Santos E (2022) Impactos do Gasoduto Bolívia-Brasil: uma análise bibliométrica e qualitativa. Revista Brasileira de Energia 28:217–242. https://doi.org/10.47168/rbe.v28i1.668. (English title: Impacts of the Bolivia-Brazil gas pipeline: a bibliometric and qualitative analysis) Moutinho dos Santos E (2002) Gás Natural: Estratégias Para Uma Energia Nova No Brasil. Annablume Moutinho dos Santos E, Zamalloa GC, Villanueva LD, Fagá MTW (2002) Gás Natural: Estratégias Para Uma Energia Nova No Brasil. https://books.google.com.br/books?redir_esc=y&hl=pt-PT& id=pKvssb_3DWUC&q=1970#v=snippet&q=1970&f=false Peyerl D (2019) The oil of Brazil. Springer International Publishing Peyerl D, Netto ALA, Moutinho dos Santos E (2020) Introductory remarks on the opportunities and challenges of natural gas and liquefied natural gas in Brazil. In: Moutinho dos Santos E, Peyerl D, Netto ALA (eds) Opportunities and challenges of natural gas and liquefied natural gas in Brazil. Letra Capital, Rio de Janeiro, pp 11–36 Presidência da República (2022) Lei 14.299. https://www.in.gov.br/en/web/dou/-/lei-n-14.299-de5-de-janeiro-de-2022-372226134 United Nations (2015) No title. https://unfccc.int/process-and-meetings/the-paris-agreement/theparis-agreement Zhang HY, Xi WW, Ji Q, Zhang Q (2018) Exploring the driving factors of global LNG trade flows using gravity modelling. J Clean Prod 172:508–515

Chapter 9

Possibilities for Carbon Capture, Utilization, and Storage in Brazil Maria Rogieri Pelissari, Stefania Gomes Relva, and Drielli Peyerl

Abstract Carbon Capture, Usage and Storage (CCUS) alternatives have great relevance for the decarbonization path of the energy transition and for the international goal of net-zero emissions. The concept is related to the capture of CO2 from stationary sources, treatment, transportation, utilization, and/or permanent storage. These low-carbon technologies can help Brazil reduce carbon emissions, mainly in the energy and industry sectors. Thus, the present chapter provides an overview of CCUS and BECCUS technologies and discusses the current scenario and future perspectives for their development in Brazil. For this, we analysed recent publications about CCUS and Bioenergy-CCUS (BECCUS) regarding the stages of capture, transport, usage and storage in Brazil, and we also systematized the technology specificities amongst CCUS and BECCUS. Some of the main results are the huge potential for associating BECCUS, considering Brazil’s large production of biofuels, mainly bioethanol from sugarcane, and the advantages of capturing CO2 from fermentation processes. The enhanced oil recovery, production of soft drinks, urea and methanol industries, and low-carbon hydrogen production are listed as some of the main possibilities for using the captured CO2 . Also, the Paraná and Santos Sedimentary Basins were considered the most prospective for carbon storage, as they are located near large-scale CO2 emission sources and have geologic favourability. Some of the main challenges observed for projects developments in Brazil are (i) the absence of a regulatory framework; (ii) the lack of public policies and financial incentives to leverage M. Rogieri Pelissari (B) · D. Peyerl Institute of Energy and Environment, University of São Paulo, Av. Professor Luciano Gualberto, n° 1289, São Paulo, Brazil e-mail: [email protected] D. Peyerl e-mail: [email protected]; [email protected] S. Gomes Relva Energy Group of Department of Energy and Electrical Automation Engineering of the Polytechnic School, University of São Paulo (GEPEA/EPUSP), Av. Professor Luciano Gualberto, Travessa 3, n° 158, Prédio da Engenharia Elétrica, São Paulo, Brazil e-mail: [email protected] D. Peyerl University of Amsterdam, Science Park 904, 1098 Amsterdam, The Netherlands © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Peyerl et al. (eds.), Energy Transition in Brazil, The Latin American Studies Book Series, https://doi.org/10.1007/978-3-031-21033-4_9

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the commercial feasibility of CCUS projects; (iii) the assessment absence of water availability without compromising its multiple uses; (iv) the absence of an integrated pipeline grid to transport CO2; and (v) the need of a more mature characterization of sedimentary basins for CO2 storage and long-term behaviour to guarantee safe sequestration. Keywords Energy transition, carbon capture, utilization and storage (CCUS) · Decarbonization · BioEnergy-CCUS (BECCUS) · Brazil

Introduction The increasing emissions of greenhouse gases (GHG), mainly from anthropogenic sources, and their potential environmental impacts have been the focus of broad discussions globally (IEA 2020, 2021; IPCC 2005). According to 2050 net-zero scenarios from the IEA (2021), half of the fossil fuel use in 2050 will be in plants equipped with CCUS, which will play an increasingly important role in reducing CO2 emissions, especially in heavy industries such as steel, cement and chemicals. CCUS technologies are also one of the two main ways to produce low-carbon hydrogen, and 40% of the increment of hydrogen generation should be related to fossil-based production equipped with CCS (IEA 2020). Technologies of CCUS can be summarized as final disposal or utilization process for CO2 produced mainly from stationary sources, such as combustion of fossil fuels for power and heat generation on thermoelectric complexes and heavy industries. The CO2 produced must be captured, separated from other gases, compressed, and transported to where it will be used or injected for permanent storage. When used in industrial processes, CO2 is converted from a liability to an asset for the emitters and users, aggregating value and becoming a resource (IPCC 2005). CCUS can also contribute to achieving the net-zero emissions global target if coupled with bioenergy plants (BECCUS) or direct air capture (DAC), removing CO2 from the atmosphere and delivering negative emissions (IEA 2020). CCUS facilities can be implemented in both new and existing plants. However, CCUS is still an emerging technology, with currently 21 commercial facilities in operation worldwide. Five BECCUS facilities represent a total capacity to capture up to 40 Mt CO2 yearly (IEA 2020). Thus, there are still several challenges to the broad implementation and development of CCUS and BECCUS, amongst them: the high costs and energy demand for the capture process, a lack of a global and well-established carbon market and regulatory framework to financing the projects and assuring integrity (IEA 2020, 2021; Leung et al. 2014; Plasynski et al. 2009; Smith and Porter 2018). Despite these difficulties, some studies defend that the goals set in the Paris Agreement (2015) cannot be achieved without implementing CCUS technologies (Global CCS Institute 2017). Nationally Determined Contributions (NDCs) submitted by many countries in the scope of the Paris Agreement referenced CCUS technologies as

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one of the main goals to achieve improvements on decarbonization, such as Canada, the United Kingdom (UK) and the United States (Global CCS Institute 2020). This also matches the growing number of corporations and industries across different sectors adopting decarbonization and net-zero emissions targets (IEA 2020). Still, CCUS and BECCUS technologies are directly related to the Sustainable Development Goals, mainly numbers 8 (sustainable economic growth) and 13 (urgent action to combat climate change). Brazilian NDCs did not mention CCS technologies directly as a path for their actions and goals (Government of the Federative Republic of Brazil 2015). Despite this, they could be deployed together with other options to help in decreasing emissions, as also stated by Carvalho et al. (2020) and Köberle et al. (2020). In 2018, Brazil was the fourteenth country that emitted the most CO2 in the world (World Bank 2018), with the greatest contributions, in 2019 related to land use (deforestation) (44%), agriculture (28%), energy (19%), and Industry (5%) (Albuquerque et al. 2020). Although Brazil has a clean power supply mix: fossil fuel generation represented only 15% of total generation in 2020 (EPE 2021b), there is a perspective for the increase in emissions in the energy sector, mainly due to expansion programs for natural gas (Campos et al. 2017; EPE 2021c). Thus, even though Brazil has a strong clean energy generation profile, it is important to verify whether technologies such as CCUS could be a mechanism for reducing the country’s futures emissions and whether Brazil could establish itself as a benchmark in the development of negative emissions production chains through of BECCUS technologies. The country has a great potential for biofuels and fossil hydrocarbon production, a strong role in the global oil market and a growing gas market, together with presenting a high potential for decarbonization. The present chapter aims to provide an overview of CCUS and BECCUS technologies and discusses the current scenario and future perspectives for their development in Brazil.

An Overview of Carbon Capture and Storage Technologies There is a suite of technologies being developed for the capture, transport, storage, and utilization of CO2 . Several of them are still in lab tests, pilot plant, and demonstration phases (Bui et al. 2018a, b). Diverse industries are attractive for CO2 capture, including oil and gas, cement, iron and steel, pulp and paper, and heat and power (Skagestad et al. 2014). Combining bioenergy with CCUS can include a variety of industrial and energy technologies, such as biomass combustion for power production, biomass conversion to liquid and gaseous fuels and biorefineries (Bui et al. 2018a, b), with the possibility of delivering neutral or negative emissions. Still, several factors can make true carbon negativity difficult, e.g., emissions from land use change, production, pre-treatment and transport of biomass, conversion process and CCS process, but also the issue of carbon debts, i.e., the amount of time required for carbon offsets to kick in (Bui et al. 2018a, b). Technologies allowing for negative CO2 removal include ocean

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fertilization, mineral carbonation, afforestation, and direct air capture (DAC) (Bui et al. 2018a, b). Regarding the feasibility of CCUS and BECCUS implementation, both have high economic potential for performance in scenarios with financial incentives or high carbon prices (IPCC 2005). The carbon capture stage represents the most expensive process in the whole CCUS chain, accounting for up to 75% of the total costs (Leung et al. 2014; Plasynski et al. 2009), mainly due to its energy-intensive character. Thus, this is a critical point that should be considered for projects. Investments and development of research for new methods and technologies are of upmost importance to decrease costs and increase feasibility (IPCC 2005). Some expectations in the area of CCUS development have not been realized due to factors such as the lack of climate policy implementation in many parts of the world, generating low incentives; CCUS price variation, reaching values even higher than initially estimated; and the social barrier for public acceptance (Netto et al. 2020; Kheshgi et al. 2012). In this section, we summarize the main differences between CCUS and BECCUS in the process of capture, transport, use and storage of carbon, highlighting the role of these two chains in the energy transition process (see Table 9.1).

Emissions and Possibilities for CCUS and BECCUS in Brazil Compared to the world, the Brazilian energy supply mix has huge participation of renewable sources, approximately 48%, related to emissions of around 400 Mt CO2 eq in 2020 (EPE 2021b). As mentioned, in the electric sector, this participation is even bigger. The biggest responsibility for the emissions in the energy sector in Brazil is the transport sector, accounting for 45% of the energy sector emissions in 2020. The transport sector in Brazil is highly dependent on highways. The country is a major producer of biofuels, but fossil fuel consumption still domains the sector (Köberle et al. 2020). Regarding stationary sources, emissions are concentrated in Brazil’s Southern and South-eastern and are primarily associated with power plants, biomass production, steel and cement industry, and refineries (Rockett et al. 2011). This section discusses the main possibilities and aspects presented for BECCUS and CCUS in Brazil, focussing on the capture, transportation, utilization, and storage phases.

Capture Despite accounting for a small portion of total national CO2 emissions, the industry sector presents a potential for CO2 capture, with the steel industry contributing to the biggest share in emissions (around 43%), followed by the cement industry (20%),

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Table 9.1 Summarization of CCUS and BECCUS technologies and main aspects CCUS Capture

BECCUS Post-combustion: involves separating CO2 from flue gases produced from large-scale fossil fuel combustion like boilers, cement kilns, and industrial furnaces (IPCC 2005). This is the cheapest method for obtaining high CO2 purity (Porter et al. 2017) Pre-combustion: consist of gasifying fuel and separating the CO2 prior to the combustion process, generating CO2 and hydrogen (Global CCS Institute 2012). This process has been used by oil, gas, and chemical to separate CO2 from gas streams for decades. Carbon capture is used primarily for Integrated Gasification Combined Cycle (IGCC) power plants (Global CCS Institute 2012). This option can also be the cheapest one or related to high costs depending on the purity of CO2 to be obtained (Porter et al. 2017) Oxy-combustion: fuel is burned in an oxygen-enriched environment (> 95%), resulting in stream emissions with higher concentrations of CO2 rather than usual, being easier to capture but also high cost (IPCC 2005; Porter et al. 2017)

The technologies used to capture carbon from the combustion of fossil fuels or biomass are the same (post-, pre-, and oxycombustion). The disadvantage for BECCUS compared to conventional CCUS is that biomass typically has a lower energy generation efficiency (Bui et al. 2018b). Thus, the opportunities to improve energy efficiency in a biomass electricity generation + CCUS system include enhancing heat recovery and using high-performance solvents for CO2 capture (Bui et al. 2018b) Fermentation and gas effluents from diverse bioenergy systems: fermentation is cheaper and easier than the combustions process for carbon capture due to higher carbon concentrations on the effluents (Smeets and Faaij 2010). The effluent gas from sugar fermentation for ethanol production is 99% pure in CO2 , which is very favourable for carbon capture, only needing to be dried to transport, giving it a competitive character amongst other carbon sources (Smeets and Faaij 2010). Thus, the carbon capture phase can be comparatively much easier and cheaper. Other sustainable sources for CO2 capture are anaerobic biogas digesters, pulp mills in biorefineries, with CO2 contents up to 20%, in dry conditions; and waste-to-energy plants, such as landfills, where there is a very important biogenic generation of CO2 from the biodegradation of residues, which could be captured with CH4 and separated for different destinations (Bui et al. 2018a, b)

CUS and BECCUS (continued)

being the two stationary industrial activities with the highest potential for carbon capture (SEEG 2020). Still, there are no such projects under development nor operation so far. Regarding the Oil and Gas Industry, there is also an important potential for CCS, mainly in offshore reservoirs (Ciotta et al. 2021).

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Table 9.1 (continued) CCUS Transport

BECCUS By pipelines, ships, roads, trains or other ways according to distance and feasibility (Singh et al. 2021): Distances < 300 km to the storage/usage site have greater feasibilities (IPCC 2005; NETL 2014). The fluid behaviour needs to be known for the compression and transportation process, which is a function of the stream’s composition (Bui et al. 2018a, b). Thus, it is necessary to identify the levels and types of impurities in the CO2 stream. CO2 captured from oxy-fuel combustion, and IGCC power plants will need to consider the removal of non-condensables, acid gas species, and other contaminants for compression and transportation (Porter et al. 2015). Given the substantial energy demand by the compression stage, further work is required to continue to find efficiencies (Bui et al. 2018a, b). It is of huge importance the integrated analysis of costs, conditions, quality of reservoir sites, distances and technologies in order to better access and define the best locations for storing or using the captured CO2 (Singh et al. 2021). More than 6500 km of CO2 pipelines worldwide are associated with enhanced oil recovery (EOR) operation in the United States and installed away from densely populated regions (Bui et al. 2018a, b). The deployment of CO2 pipelines closer to population centres has been investigated to reduce uncertainties and costs (Bui et al. 2018a, b). The actual level of CO2 purity required will be dictated by a combination of transport and storage requirements and process economics (Porter et al. 2015). Thus, the purity level of CO2 captured in the fermentation process is an advantage for compression and transportation. On the other hand, pipelines infrastructure is more linked to the oil and gas value chain (continued)

Besides, Brazil is the second biggest world bioethanol producer (Renewable Fuels Association 2020), based mainly on sugarcane fermentation, and is also the thirdlargest world producer of bioelectricity (REN21 2021), mainly from solid biomass, such as sugarcane bagasse and related residues. Most part of the ethanol and sugar production in the country is located in the South-centre region of Brazil (Ketzer et al. 2016). Thus, there is a great potential for BECCUS application in Brazil, mainly in the sugarcane-ethanol sector. Restrepo-Valencia and Walter (2021) assessed possibilities for BECCUS in Brazil and concluded that CCS coupled to fermentation in large plants would be the most viable alternative. Rochedo et al. (2016) indicate that capture in ethanol distilleries may occur at reduced costs and become viable, if considering an additional revenue associated with the use of the captured CO2 for EOR in mature oil fields in the country. The authors also state that capture costs are lower for petroleum platforms and hydrogen generation units in oil refineries or ammonia plants. However, as Lucena et al. (2014) addressed, carbon capture requires additional water consumption and a concurrent generation of residues. In addition, according to the authors, some regions in Brazil would not support the higher water demand that carbon capture systems would eventually add. Therefore, to identify the potential for carbon capture in Brazil, it is not enough to inventory the location of stationary sources and the possible storage reservoirs. It is also necessary to carry out a complete

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Table 9.1 (continued) CCUS

BECCUS

Utilization Production of manufactured goods, synthetic fuels, chemical conversions, refineries, mineral carbonation, EOR (Al-Mamoori et al. 2017; Chauvy et al. 2019; Ghiat and Al-Ansari 2021). Specific uses must meet criteria according to demand, proximity, and favourability for implementation, e.g., chemical conversions and mineralization (Chauvy et al. 2019; Ghiat and Al-Ansari 2021) There are several research and innovation efforts to make the captured CO2 a future raw material for other forms of commodity production, for example the manufacture of footwear; the conversion of captured CO2 into a sustainable alternative to conventional concrete, the production of synthetic fish and animal feed; the recycling of captured biogenic CO2 into synthetic alternatives to crude oil or gas (Palmer and Carton 2021)

Actual applications of CO2 captured from biomass burning in the UK, for example, have to date been limited largely to boosting yields in the horticultural sector (Palmer and Carton 2021). The problem is whether CO2 use as the basis for commodity production can really be considered as long-term storage at all: if incorporated into sustainable construction materials, it remain locked up in the built environment for many decades at least; when used as a basis for producing synthetic animal feed or even synthetic fuels, however, it will not keep out of the atmosphere, neither will replace existing GHG emissions chains (Palmer and Carton 2021). These new uses for carbon can be decisive in determining whether BECCUS can offer negative emissions. Thus, for BECCUS today, there is an ambiguity about the boundaries between achieving large-scale carbon dioxide removal on the one hand and developing a truly sustainable, “circular” bioeconomy on the other (Palmer and Carton 2021)

CCUS Storage

Injection of CO2 on geological reservoirs must be done in those ones that fit criteria for long term and safe abatement. Main geological reservoirs are: depleted O&G reservoirs, coal seams, saline aquifers, salt caverns, dark shale layers, and basalts (Busch et al. 2008; IPCC 2005; Matter et al. 2016). Long-term storage efficiency depends on sealing rocks and the interaction of CO2 with the reservoir (Alemu et al. 2011). CO2 density is also essential, and it should preferably be in its supercritical state. CO2 impurities must be analysed for security purposes (Porter et al. 2015). There are risks of gas migration and superficial leakage (Koornneef et al. 2011). Thus, the reservoir must be sufficiently porous and permeable to withstand large amounts of CO2 and be covered by low permeability sealing rocks to prevent the vertical migration of these gases (Nordbotten and Celia 2011). Putting the necessary infrastructures to achieve the safe, long-term storage of captured CO2 , especially at scale, remains a significant economic and policy challenge (Palmer and Carton 2021) Therefore, while the storage and management of geological wells is already part of the fossil fuel production chain, it is important to map the possible geological reservoirs and their distance from biomass production and use units, verifying the technical and financial feasibility of this logistics, as elaborated by Singh et al. (2021) who evaluated the possible reservoirs in US for two CO2 capture technologies from biomass power generation by post-combustion process and by IGCC plants

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survey of the environmental and economic conditions, including water availability and transport issues.

Transport For the transport of CO2 , Brazil does not have, so far, a developed pipeline framework specific for this purpose, and so investments in the development of such infrastructure are of extreme relevance. Despite that, there are some local pipelines of small distances, such as the case of the Bahia state, which has 70 km of pipelines constructed to transport CO2 from industries to offshore reservoirs, where the gas is injected in the Buracica Oil Field for EOR-CCS purposes, in a project developed by Petrobras (Ketzer et al. 2016). There is currently around 12,000 km of pipelines for gas transportation in Brazil (ANP 2020), mainly located in coastal areas of the Southeast region. Currently, Brazil also has more than 9600 km of pipelines under construction, with plans to expansion also to the countryside, on which Ketzer et al. (2014) indicate a potential for CO2 transportation. However, it is important to notice that natural gas is an important energy resource for Brazil, and still, the country faces challenges in expanding the natural gas grid (Lucena et al. 2014). Thus, it can be expected that it will be challenging to establish an institutional arrangement for the construction of CO2 pipelines in the country since, unlike natural gas, CO2 is still an environmental externality and not a marketable fuel (Lucena et al. 2014). Besides that, there are different specificities from natural gas, oil, and CO2 that should be taken into consideration for transporting, such as physical–chemical conditions that should be adapted for each type of content, impacting all the pipeline structure and composition, as discussed in Table 9.1. In this way, it is necessary to formulate a national protocol or standard on the quality, composition, purity, and main aspects related to the character of the CO2 to be transported in order to guarantee the efficiency and safety of its transportation and integrity of the pipelines. The development of a consolidated carbon market, using cap and trade, for example (Grubb 2012), could be beneficial for the verbalization of CO2 grid in Brazil, but this market is still in its infancy and on a voluntary basis (de Souza et al. 2013). It is also important to increase the Brazilian pipeline grid to cover a major area of the country, linking CO2 emitters to storage and utilization areas and favouring the implementation of CCUS projects. This would be especially important for BECCUS development once the majority of bioenergy systems are in the countryside of the Southeast Region. There is currently a lack of institutional discussions regarding this possibility, with very few materials available under the national perspective, being a topic to be further developed and studied. Brazil has a general predominance of road transportation, so this could be a cheaper and most immediate solution to support CO2 mobility, mainly on short distances. Still, the balance of net emissions should be considered once trucks are

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mostly fuelled with diesel, related to high emissions, which could compromise the purpose of CO2 abatement.

Utilization For the utilization in Brazil, EOR is currently the most common use for CO2 captured in the O&G production (Ciotta et al. 2021). In addition, there is also an important demand in the soft drink industry. According to Pacheco et al. (2019), methanol, polycarbonates, formic acid and acetaldehyde are the most promising CO2 utilization alternatives for local manufacture. The states of São Paulo, Paraná, Amazonas, Bahia, Rio Grande do Sul, and Santa Catarina are the most promising regions in terms of potential for CO2 utilization. More specifically, the state of São Paulo would have the highest availability and demand for CO2 , being the most indicated for implementing Carbon Capture and Utilization schemes (Pacheco et al. 2019). Regarding the actual use of captured CO2 in Brazilian industries, we found the news in the press reporting agreements such as the capture of CO2 in the alcohol production plants: Vale (Onda Verde city in the state of São Paulo—70 t of CO2 /day), and Penedo (Penedo city in the state of Alagoas—35 t of CO2 /day) and the selling for the beverage industry in 2014 (Furtado 2014). Another piece of news was related to the agreement, in 2002, between the Raudi company and the Regional Agricultural Cooperative of Sugarcane Producers of Paraíso do Norte, which represented, according to the news, the first agreement in Brazil for the transformation of captured CO2 into sodium bicarbonate (NA2 CO3 ) (Medeiros 2002). However, we could not assess whether these projects are still in operation since no official information about them was found on these companies’ websites nor in Brazilian research papers. Developing a regulated carbon market in the country is an essential tool for leveraging a broader utilization of CO2 . Turning it from an externality to a product with commercial value can bring more opportunities and benefits for its usage.

Storage Sedimentary basins are considered good prospects for CO2 storage once they generally contain great variability of lithologies and structures that may be favourable for CO2 sequestration. In Brazil, there are 29 Sedimentary Basins with oil potential, according to the Petroleum National Agency (ANP) (Petersohn 2018), from which some are very large and barely explored, and some are at a mature stage for oil production, such as the Recôncavo Basin. Some of these basins are close to the most important regions in terms of CO2 emissions, in areas with intensive industrial and urban activities (Pelissari 2021). The most prospective basins are the Paraná, Santos, Campos and Recôncavo Basins, which are the closest ones to stationary emissions bigger than 5000 kt CO2

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(Rockett et al. 2011). According to Restrepo-Valencia and Walter (Restrepo-Valencia and Walter 2021), 51% of the industrial plants located in the Centre-South of Brazil are within a 300 km radius with potential storage areas for CO2 in Paraná Sedimentary Basin. This basin also comprises the most important region for biofuel production in Brazil (Pelissari and Tassinari 2020). Currently, Brazil has one BECCUS facility under construction, with bioethanol production coupled to CO2 capture and storage on rocks of the Paraná Sedimentary Basin, in the state of Mato Grosso (Fueling Sustainability 2020). The first project for CO2 storage and unconventional gas production in coal (enhanced coal bed methane) in South America was also carried out in the Paraná basin in 2012 (Beck et al. 2011; Santarosa et al. 2013). The pilot project was sponsored by Petrobras, but there were no further developments. The Santos and Campos Sedimentary Basins are offshore basins in the southern region historically related to most of Brazil’s hydrocarbons’ production. This O&G production on the Pre-Salt is related to huge amounts of associated CO2 . Injecting it back into the reservoir is one of the adopted alternatives, consisting of the EOR-CCS on these basins (Iglesias et al. 2014), which have the geological potential for CCS, as assessed by Rockett et al. (2011). Currently, Petrobras is injecting CO2 in the presalt offshore reservoir of the Santos Basin to enhance oil production. According to Petrobrás (2021), it is expected that the Company will achieve the goal of reinjecting around 40 million tons of CO2 on offshore basins by 2025 on CCUS-EOR projects. Depleted offshore reservoirs are also an important prospect for CCS in Brazil, as studied by Ciotta et al. (2021), mainly considering lower costs, greater availability of technical studies and reuse of available infrastructure (Hannis et al. 2017). The Recôncavo Basin is a mature basin in the Northeast Region of Brazil, related to important historical productions of oil in sandstones reservoirs. It is also located close to important stationary sources of CO2 (Rockett et al. 2011). Dino and Gallo (2009) conducted research and pilot project of CCS on this basin, from a Petrobras project, focussing on the opportunity of retrofitting the pre-existent injection wells on the oil fields to develop and assess the CO2 storage technology, resulting in successful storage of more than 600,000 tons of CO2 during 20 years of EOR-CCS. Thus, based on the issues discussed Table 9.2 shows a systematization of the most important aspects regarding capture, transportation, utilization, and storage of CO2 for CCUS and BECCUS projects in Brazil.

Legal, Economic, and Political Aspects Some of the most important requisites for CCUS and BECCUS projects are: satisfy geological conditions to guarantee safe and permanent storage; smart technologies to capture and separate CO2 at minimum costs; the proximity of the emitting source of CO2 to the reservoir to reduce costs with transportation; the existence of robust legislation to regulate all the steps and to guarantee a continuum monitoring of the reservoir, mainly after the end of the injection; financial incentives, from both the

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Table 9.2 Summarization of main aspects and potentials of BECCUS and CCUS in Brazil CCUS

BECCUS

Capture

Besides the capture from O&G production, the main possibilities are post-combustion capture from stationary sources, such as coal and gas thermoelectric generation plants, refineries, and cement industries (Rochedo et al. 2016)

Potential mainly from the sugarcane-ethanol sector, with CO2 capture from sugarcane juice fermentation plants, bio digestion of sugarcane vinasse and flue gases (Restrepo-Valencia and Walter 2021; Rochedo et al. 2016)

Transport

Pipelines or roads, according to distances and economic feasibility. The pipeline framework for natural gas transportation could be adapted for CO2 . Expansion of pipelines may be challenging (Lucena et al. 2014)

Construction of pipelines linking bioenergy systems to storage or utilization areas; road transportation could be a cheaper and easier alternative, mainly for smaller distances

Utilization

CO2 captured can be used for EOR on O&G reservoirs (EOR-CCS). Important demand of CO2 from soft drink industries and urea production (Rochedo et al. 2016)

Potential to couple the carbon capture from sugarcane fermentation to use on soft drinks, urea and NA2 CO2 production, as the mentioned projects are under operation. And also for methanol, polycarbonates, formic acid and acetaldehyde production (Pacheco et al. 2019)

Storage

When used for EOR, the CO2 is stored in the geological reservoir. Main potential geological formations are in the Paraná, Santos, Campos and Recôncavo sedimentary basins. The injection site must be the closest as possible to the capture site to avoid costs with CO2 transportation

Similar to CCUS, but special potential from the Paraná Sedimentary Basin, which occurs in the Southeast Region, being the closest to the areas of bioethanol and biofuels main production in Brazil

governmental and private sectors, coupled to the existence of a consolidate carbon credit market to bring feasibility for projects; and the public acceptance (IPCC 2005). Moreover, given the high costs, to reach a viability level for the execution of CCUS and BECCUS projects, there is a need for legal and logistic adaptation, as well as the creation of incentive policies. Brazil does not yet have a specific policy or legislation to encourage the implementation of BECCUS and CCUS technologies, which is necessary to be developed, defining the responsible parts, obligations, and penalties, including long-term monitoring after the end of carbon injection into the reservoir. Besides, according to Netto et al. (2020) there is also a need to work on the public acceptance and comprehension of CCUS in Brazil (see Chap. 5). Still, there is currently an absence of a robust integrated carbon market in the country. Despite, there is a voluntary and marginal one, which trades green certificates, such as I-RECS, related to renewable energy generation, emitted by the Totum Institute, and CBIOS, decarbonization credits related to biofuels generation and adopted by the Brazilian National Biofuels Policy (RenovaBio) (Federal

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Law 13576/2017). Also, there is a growing demand for such market and discussions regarding its legal implementation are already under consideration in federal instances (de Souza et al. 2013), but are at an infancy stage. Although Brazilian NDCs do not consider BECCUS or CCUS, these processes were mentioned in the Brazil Country Program for the Green Climate Fund—GCF of 2018, and in the National Plan of Energy—2050 (EPE 2020) although without extensive analysis or robust planning. They were considered technologies to be implemented in the future, mainly associated with coal-fired power plants, which reveals a perspective for future governmental investments on such. Besides, the national goals related to the development of biofuel generation can leverage BECCUS implementation. Also, governmental discussions on the Hydrogen National Policy have mentioned CCS and CCUS as main possibilities for hydrogen production in Brazil (EPE 2021a). Finally, one of the most important producers of coal in the country, the state of Santa Catarina, developed a public policy for Energy Transition, through a bill (PL 0270.1/2021), that aims to provide sustainable alternatives for the coal chain, mentioning CCS as one of the alternatives to be adopted, which reinforces its importance for the country. However, the law related to this project was sanctioned in 2022 (Law nº 14.299), and CCS is not mentioned in the final text (Official Diary of the Union 2022). Still, this policy could be important to leverage the implementation of CCUS in the Power Sector in Brazil, and some published studies have already started to assess the potential for CCS coupled to coal-based power plants, such as Pelissari (2021), who defined potential geological reservoirs in the surroundings of the biggest coal-fired power plant in Brazil.

Final Remarks CO2 capture, utilization, and storage technologies have been gaining ground globally in the last years, proving to be a potential alternative to sequester CO2 and reduce its emissions. Considering that Brazil is committed to decreasing emissions, being a signatory of the Paris Agreement and setting decarbonization goals on the NDCs, technologies such as CCUS and BECCUS can be alternatives to be implemented to decrease emissions. In Brazil, CCUS projects have so far been mainly associated with EOR in offshore basin reservoirs, with gas injection to stimulate the oil recovery rate, and only one BECCUS project is under development. For storage in terrestrial reservoirs, although several studies consider the potential, mainly in the Paraná basin, and there are even pilot and development projects in this basin, the maturity of the studies to evaluate the potential of geological units is still low. There is much to be done in order to better characterize rocks and modelling to estimate CO2 storage capacity and behaviour. There is also a potential to associate BECCUS/CCUS plants with hydrogen plants, once there is a growing market for this source, but due to the current high costs and lack of investments, it is still not largely feasible.

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On the legal and economic aspects, there is also a gap to be covered, with the need to develop a regulatory framework to define the responsibilities and penalties related to all the value chain of BECCUS and CCUS projects, as well as fiscal and political incentives to bring feasibility for such, such as a carbon credit market that could bring competition and leverage actions for decarbonization in the country. There are no expectations for the development of large commercial-scale BECCUS/CCUS plants in the short term. We can conclude that some Brazilian government documents consider CCUS and BECCUS technologies, but without deepening the practical ways to effectively develop these projects in Brazil. On the companies’ side, much of the investments and development are related to Petrobras, which has been actively developing and using the injection of CO2 in its oil fields since the 2000s (Beck et al. 2011). Regarding research and development (R&D), during the process of investigating Brazilian information on carbon capture projects and policies, we were able to identify important initiatives such as the ones promoted by Petrobras and by Shell, as the FAPESP-Shell Research Centre for Greenhouse Gas Innovation (RCGI), centred in the University of São Paulo, which is currently developing multiple interdisciplinary research projects mainly related to natural gas and CCUS technologies, and the Brazilian Carbon Storage Research Centre (CEPAC), an interdisciplinary centre for research and demonstration of carbon storage technologies, centred in the Pontifical Catholic University of Rio Grande do Sul (PUCRS), which is no longer active. There is also the CO2 Capture Laboratory in the National Institute for Space Research (INPE), located in São Paulo state, focussing on developing new materials for hydrocarbons combustion using a chemical looping process of the technologies being developed for CO2 capture. From what has been presented in this work, important topics should be taken as the main challenges and needs to encourage and leverage a broader development of CCUS and BECCUS technologies in Brazil, as summarized below. Some of them are already part of R&D studies in Brazilian research centres, but it is important that the government and private institutions also participate more actively in them: ● Investments in infrastructure for CO2 transportation, such as pipelines, connecting emission hubs to the areas for carbon utilization and storage, together with the development of a standard protocol for CO2 quality and conditions to guarantee the integrity of pipelines during its transport; ● Investments in research for development and demonstration of technologies for carbon capture and utilization, to increase the portfolio of possibilities and bring down costs, creating a mapping of the CO2 usage possibilities; ● Assessment of hydro availability and feasibility for CCUS projects in different regions of Brazil, considering its relevance due to huge amounts of water needed for this activity and the safety assurance of multiple uses of water in the country; ● A more mature understanding of the potential and characteristics of sedimentary basins and geological formations to become safe CO2 reservoirs, guaranteeing its permanent abatement over time;

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● A regulatory framework to support BECCUS/CCUS activities, defining the responsible parts, obligations, and penalties, including long-term monitoring after the end of carbon injection into the reservoir; ● A more active role from the State, acting on the creation of governmental policies and projects to invest in the development of BECCUS/CCUS, support private companies that want to invest in such and define the priorities and main paths; ● Fiscal incentives to increase the feasibility of BECCUS/CCUS projects, and financial instruments such as a Carbon Market and carbon taxation, obligate the emitters to take actions to decrease their impact. Acknowledgements Maria Rogieri Pelissari thanks the financial support of grant Process 2019/07995-4 from the São Paulo Research Foundation (FAPESP) and the support from the Coordenação de Aperfeiçoamento de Pessoal de Nível Superior—Brazil (CAPES) (Code 001). All the authors thank the support of the RCGI—Research Centre for Gas Innovation, hosted by the University of São Paulo (USP) and sponsored by FAPESP—São Paulo Research Foundation (2014/502794 and 2020/15230-5) and Shell Brazil, and the strategic importance of the support given by ANP (Brazil’s National Oil, Natural Gas and Biofuels Agency) through the R&D levy regulation. Stefania Gomes Relva Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq), for the scholarship. Peyerl thanks the current financial support of grant Process 2017/18208-8, 2018/263889, FAPESP. This work was partially financed by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior.

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Chapter 10

Hydrogen: A Brazilian Outlook Sabrina Macedo and Drielli Peyerl

Abstract Hydrogen is a clean energy carrier, capable of promoting green transition among different sectors and storing variable renewable energy bringing security to power supply. This book chapter aims to analyse hydrogen’s outlook in Brazil as a vector to foster the green transition. In addition, previous actions and the potential perspectives of applying hydrogen technologies to generate and store energy are analysed. Firstly, Brazil’s bases of hydrogen strategy were identified, bringing the historical country’s initiatives to grow a hydrogen economy. Afterwards, a survey of the Brazilian power sector and hydrogen production, storage and use perspectives was conducted. Brazil has made efforts to evolve a hydrogen economy, including this source in future energy planning. Still, some questions need to be settled to incorporate the new source, such as institutional and legal governance, regulating and supervising the market, issues around safety conditions, certification of processes, human resources, and fuel specification. Besides, Brazilian renewable potential can be expanded through hydrogen cooperation for the national and global green transition. The work also recognizes which sectors would embrace green hydrogen beyond the power sector as an option. Keywords Energy transition · Green transition · Hydrogen economy · Brazil

Introduction To limit global warming, the Paris Agreement is a landmark. Signed up on 4 December 2016, it brought together more than 190 nations into a common cause S. Macedo (B) · D. Peyerl Institute of Energy and Environment, University of São Paulo, Av. Professor Luciano Gualberto, n° 1289, São Paulo, Brazil e-mail: [email protected] D. Peyerl e-mail: [email protected]; [email protected] D. Peyerl University of Amsterdam, Science Park 904, 1098 Amsterdam, The Netherlands © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Peyerl et al. (eds.), Energy Transition in Brazil, The Latin American Studies Book Series, https://doi.org/10.1007/978-3-031-21033-4_10

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to undertake efforts to combat climate change processes. By 2020, countries have submitted their plans for climate action known as Nationally Determined Contributions (NDCs) (UNFCCC 2015). In December 2020, Brazil also reaffirmed the commitment to reducing total net greenhouse gas emissions by 37% in 2025 and 43% in 2030, compared to 2005 and even expressed the indicative objective of achieving climate neutrality (net-zero emissions) in 2060 (Brazil 2020; MRE 2020). In the energy sector, the country defined the commitment of reaching 45% of renewables in the energy mix by 2030, including expanding the use of renewable energy sources other than hydropower in the total energy mix to between 28 and 33% by 2030, increasing the use of non-fossil fuel energy sources domestically, increasing the share of renewables (other than hydropower) in the power supply to at least 23% by 2030, including by raising the share of wind, biomass, and solar, and achieving 10% efficiency gains in the electricity sector by 2030 (Brazil 2015) (see Chap. 13). The years since the Paris Agreement entry into force have sparked low-carbon solutions and new markets. Zero-carbon solutions are becoming competitive across economic sectors, most evident in the power and transport division, having created many new business opportunities for early movers (UNFCCC 2015). In addition, the green transition aims for an economy with zero climate change and a sustainable growth path grounded on renewable energies (Lamperti et al. 2020). Therefore, green hydrogen has been seen as a promising fuel capable of achieving emission reduction goals mainly because of its versatile, energy efficiency, low-polluting, and renewable fuel (Najjar 2013). Besides, it can be used directly as a low or zero-carbon energy source, depending on its production process. The commercial and most essential industrial process to produce the purest form of hydrogen is water electrolysis, when water molecules are split to give hydrogen and oxygen by circulating electricity directly through it (Van Dinh et al. 2020). When the electricity for this process comes from renewable sources, there is the production of green hydrogen. It is one of the only zero-carbon options for hydrogen production (IRENA 2016). However, green hydrogen production is highly expensive since it uses technologies that are still emerging in the market and does not have scale production (IEA 2019). Green hydrogen technology is expected to be deployed at such a large scale to reach all hardto-decarbonize sectors, boost demand, and scale up the production and supportive policy framework required to achieve Paris Agreement objectives (Kovaˇc et al. 2021). In Brazil, the power sector is one of the sectors that can engage a green hydrogen economy mainly because it is composed mostly of renewables. Once variable renewable energy has moved fast and is forecasted to grow around 4% by 2030 (EPE 2021; MME 2021a, b, c), this will request technology that guarantees energy security and reliability for the power grid. Hydrogen can allow the expansion of renewables, as it has the potential to soften the variable production of energy from wind and solar photovoltaic sources. The process of converting the power generated from renewable sources to different types of energy carriers for use across multiple sectors or reconverted back into power can greatly increase the flexibility of the power grid (IRENA 2019a). Brazil’s solar and wind power potential is one of the greatest globally, likely leading the hydrogen market (Chaves et al. 2021).

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Hence, this chapter aims to analyse hydrogen’s outlook in Brazil as a vector to foster the green transition. Previous actions and the potential perspectives of applying hydrogen technologies to generate and store energy are analysed, following which sectors would embrace green hydrogen beyond the power sector. From the standpoint of existing renewable sources, can hydrogen support Brazil’s development towards green transition? This work drives issues such as energy security, views on climate change, its impacts, and hydrogen solutions for moving to a carbon-neutral society. Yet, this chapter consists of three parts: (i) bases of hydrogen strategy in Brazil, bringing up movements that the country has started for the growth of a hydrogen economy; (ii) Brazilian power sector and perspectives of hydrogen production and storage, going through the challenges of converting electricity from renewables into green hydrogen and store it, processes called power-to-hydrogen, to be reconverted back into power; then, the analysis of the potential integration of renewables in the industry, energy, and transport with power-to-x solutions (where green hydrogen can be stored and further used or processed in many ways using green hydrogen) (Siemens 2021); (iii) conclusion, given an overview of the matters above, connecting how it can contribute to climate change.

Bases of Hydrogen Strategy in Brazil In 2002, Brazil started developing its hydrogen strategy with the Brazilian Hydrogen Program and Fuel Cell System (PROCAC), introduced by the Ministry of Science and Technology (MCT). Later, in 2005, this program had a new denomination, changing its name to the Science, Technology and Innovation Program for the Hydrogen Economy (PROH2 ) (EPE 2021; Peyerl 2018). In 2003, The International Partnership for the Hydrogen Economy was created, having Brazil among its partners, aiming to foster international cooperation on hydrogen and fuel cell Research and Development, common codes and standards, and information sharing on infrastructure development. Subsequently, in 2009, the organization changed its official title to International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE) (IPHE 2021). In 2005, the Ministry of Mines and Energy (MME) coordinated the “Roadmap for Structuring the Hydrogen Economy in Brazil”, an extensive report alongside the MCT and dozens of Brazilian and international specialists. The roadmap established some relevant subjects for guiding the national hydrogen strategy, including the valorization of competitive advantages, such as ethanol (produced by steam reform processes and direct oxidation in fuel cells); electrolysis of water (using secondary electricity from hydroelectric plants), and other biomasses (besides sugar cane, including biogas) (EPE 2021). There was also the recognition of the role of natural gas in facilitating the transition to a phase dominated by green hydrogen. Also, the roadmap pointed to a definition of a market expansion logic for hydrogen: the distributed energy generation, energy production in isolated regions, and urban

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buses. The document foresaw the release of a Government Program for the Production and Use of Hydrogen in Brazil after 2007. However, discoveries of the Presalt in 2006 implied a change in priorities in the energy policy agenda, and the program was not launched (EPE 2021; Peyerl 2018). Although, several technological projects associated with universities, research institutes, and companies have developed hydrogen generation applications (EPE 2021). In addition, Brazil stands out as a leader in hydrogen technology studies in Latin America due to the role that institutions and universities have developed on the subject, for example, Unicamp’s Hydrogen Laboratory; Alberto Luiz Coimbra Institute for Graduate Studies and Engineering Research (COPPE)/Federal University of Rio de Janeiro, which structured the Hydrogen Laboratory and the Reference Centre for Hydrogen Technology and Economy, in partnership with Eletrobras Electric Energy Research Centre (CEPEL) (EPE 2021; Peyerl 2018). In 2010, the Centre of Management and Strategic Studies (CGEE), under the Ministry of Science and Technology commissioning, launched the Energetic Hydrogen in Brazil: Subsidies for Competitiveness Policies: 2010–2025 (CGEE 2019). The report presented the international and national scenario, made considerations, and discussed bottlenecks and proposals on four themes: (1) hydrogen economy, (2) hydrogen production, (3) development of hydrogen logistics, and (4) hydrogen utilization systems. The document also brings the perception of vast opportunities for Brazil (CGEE 2010; EPE 2021). In mid-2019, the initiative Energy Big Push (EBP) Brazil was conducted by the Centre for Management and Strategic Studies (CGEE) in partnership with the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) and the National Energy Research Company (EPE), having the International Energy Agency (IEA) supporting the project. The initiative’s main objective is to promote more and better public and private investments in clean energy, emphasizing innovation and contributing to sustainable development (CGEE 2019). The study sought to organize and systematize data to understand better the volumes, destinations, and main characteristics of Research, Development, and Demonstration (RD&D) in the energy sector. The consolidated database made it possible to assess the profile of hydrogen projects from 2013 to 2018. Figure 10.1 shows the public energy Research, Design, and Development investments per year in hydrogen and fuel cells compared to Brazil’s other power and storage technologies. Also, referencing more international partnerships, the Brazil–Germany Chambers of Commerce and Industry of the states of São Paulo and Rio de Janeiro through the Brazil–Germany Alliance for Green Hydrogen seek opportunities to broaden the debate about trading hydrogen between both countries. This issue has emerged as Germany, in June 2020, announced as part of its hydrogen policy to finance investments in hydrogen plants in other countries to contribute to the consolidation of a global hydrogen market for energy purposes. The German government plans to invest 2 billion euros in partner countries’ financing projects through this national strategy. For Brazil to be included in the German program, which will provide a ten-year contract for the local production of green hydrogen, it is necessary to map and present relevant projects by national companies that reinforce its importance in

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Million R$

140 120 100 80 60 40 20 0

2013

2014

Hydrogen and fuel cells

2015

2016

2017

2018

Other power and storage technologies

Fig. 10.1 Public energy RD&D investments per year in hydrogen and other power and storage technologies in Brazil based on (CGEE 2020)

this segment. With a history marked by significant commercial partnerships, Brazil and Germany have the potential to create a very positive room for cooperation in this market for both sides (BrasilAlemanha 2021). On 16 December 2020, the MME approved the National Energy Plan 2050, presenting discussions on energy transition, emphasizing the hydrogen economy’s role in this process (EPE 2020a). As many renewable sources of electricity are intermittent and several consumption sectors are unlikely to be served by electricity or biofuels, hydrogen turns out to be a positive alternative. The document also draws out issues such as disruptive technologies. It defines them as those capable of significantly altering the energy market. We have a few elements to foresee their insertion in the energy supply mix and the resulting consequences, enlightening hydrogen as a potentially disruptive technology (EPE 2020a). In February 2021, the government of the state of Ceará, in partnership with the Federation of Industries of Ceará (Fiec), Federal University of Ceará (UFC), and Pecém Complex (CIPP S A), presented a project called The Green Hydrogen Hub. A working group was established to bring together agents of institutions to strengthen the green hydrogen chain in Ceará. A memorandum of understanding was also signed with the Australian company Enegix Energy, which intends to install a plant to produce green hydrogen in the Pecém Complex, with investments estimated at US$5.4 billion (MME 2021a). In the same year, the National Energy Research Company (EPE) publishes the Technical Note Basis for the Consolidation of the Brazilian Hydrogen Strategy. The objective of this Technical Note is to address conceptual and fundamental aspects for the construction of the Brazilian Hydrogen Strategy. An overview of the hydrogen industry, its challenges, and opportunities were presented, including documents on technological evolution, costs and national strategies, and a survey of the history of initiatives in Brazil related to hydrogen (EPE 2021).

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Among these events, The National Energy Policy Council (CNPE), in a meeting held on April 2021, through Resolution nº 6, proposed the development of guidelines for the National Hydrogen Program (MME 2021b). The program was published in August 2021 and structured on six axes: (i) strengthening the scientific and technological bases; (ii) human resources training; (iii) energy planning, focusing on the role of hydrogen in Brazil, started already with the PNE 2050; (iv) legal and regulatorynormative framework; (v) market opening and growth and competitiveness; and vi) international cooperation, which has already started (EPE 2020a; MME 2021c). It is possible to see that Brazil has evolved a hydrogen economy. However, there is still considerable work to be done. The following section will bring the perspectives of green hydrogen in the country, showing its challenges and potential for expanding.

Brazilian Power Sector and Perspectives of Green Hydrogen Production and Storage Challenges and Opportunities of Power-to-Hydrogen Power can be stored by being converted into hydrogen, a process called power-tohydrogen. Hydrogen is a free energy carrier that can be produced by many energy sources (IRENA 2019c). It can be extracted from fossil fuels, biomass, and water. Natural gas is currently the primary source of hydrogen production, accounting for around three-quarters of the annual global dedicated hydrogen production, while less than 0.1% of global dedicated hydrogen production today comes from water electrolysis (IEA 2019). Green hydrogen is current high costly across its entire value chain, from electrolysis to transport and fuel cells. The lack of existing infrastructure for transport and storage, the high-energy losses, and the lack of value for the main benefit (e.g. lower GHG emissions) that green hydrogen can have contributed substantially to high costs (IRENA 2020). Electricity input is the major cost of green hydrogen production, and electrolysers’ efficiency and capital cost are in the second place (IEA 2019; Longden et al. 2020). However, the declining costs for renewable electricity, particularly from solar photovoltaic and wind, are growing interest in electrolytic hydrogen. In Brazil, renewables represent about 83% of the electricity mix (EPE 2020b). Hydropower represents 59% of the installed capacity share, wind 9%, and solar 2%. (EPE 2021; MME 2021a, b, c). Brazil’s solar and wind power potential will likely foster a strong hydrogen market (Chaves et al. 2021). Besides, another option for Brazil to make green hydrogen production feasible is using turbine discharged energy (a portion of water diverted to the spillway, that is, wasted) when considering large hydroelectric plants (Nadaleti et al. 2019). Brazil has demonstrated hydrogen production projects by electrolysis in the hydroelectric plants of Itaipu, Itumbiara, and Porto Primavera (EPE 2020a).

10 Hydrogen: A Brazilian Outlook Table 10.1 Water electrolysis parameters based on (IEA 2019)

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Parameter

Today

2030 year

Long term

Capex (USD/kWe_

900

700

450

Efficiency (LHV) (%)

64

69

74

Annual OPEX (% Capex)

1.5

1.5

1.5

Stack lifetime (h)

95,000

95,000

100,000

On the IEA G20 hydrogen report (IEA 2019), hydrogen production by water electrolysis presents a global average parameter as given in Table 10.1. Still, to reach these numbers, it is considered a full load of hours of electricity, with a capacity factor of around 5000 h/year and an electricity price in the long term of USD18/MWh to USD63/MWh. Brazil’s 2050 National Energy Plan outlines those electrolysers would be produced in the country as an alternative to reduce costs through the nationalization of inputs. The electrodes are based on nickel alloys when considering alkaline electrolysis, which is an abundant raw material in Brazil. That could be a starting point for the electrolysers manufactured in Brazil to become price competitive (EPE 2020a). Natural hydrogen sources may also represent a new attractive primary carbon-free energy resource. The São Francisco Basin, located in the Brazilian states of Minas Gerais and Bahia, belongs to a shortlist of intra-cratonic basins where hydrogen seepages have been discovered (Donzé et al. 2020). Some monitoring also points to natural hydrogen in Ceará, Roraima, and Tocantins (EPE 2020a). Hydrogen exploration requires combining the techniques and data used for conventional petroleum and mining exploration. According to Moretti et al. (2021), exploration and production of natural hydrogen are some of the most promising ways to get large quantities of green hydrogen cheaper than the grey one produced from methane steam reforming and green produced from electrolysis. However, exploration started in various geological settings, and strategies and tools are under development (Moretti et al. 2021). Another abundant energy source in the country is biomass, according to the National System Operator (ONS), which currently accounts for 8.3% of the Brazilian supply mix (installed capacity). The bio-to-hydrogen technologies have opened new perspectives for Brazil, especially for sugar and alcohol plants with a consolidated industry and infrastructure that already produce ethanol, biogas, bio-waste, and biodiesel on a large scale. Hytron, a Brazilian start-up founded by São Paulo State Research Foundation (FAPESP), developed a container-mounted system that produces hydrogen from ethanol, a route technically known as ethanol reforming. Hytron also produces hydrogen from methane, biomethane, and water electrolysis (Geraque 2021). Apart from water electrolysis, producing hydrogen by ethanol reform and biomass gasification was also part of the roadmap for the structuring of the PROH2 (AHK 2019). On the scope of hydrogen storage and transportation, costs are also critical and need to be scaled up at the implementation level to foster competitiveness in the use

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of hydrogen. Hydrogen is usually stored and transported in compressed or liquid gas due to its low density (Mayyas et al. 2020). Also, storage can be carried out in salt caves and depleted gas or oil reservoirs, enabling large-scale and long-term storage and having lower costs than tanks. Transmission and distribution can be done through hydrogen blends in the natural gas pipelines. Still, this issue requires studies on the gas limit that can be injected without prejudice to the network or the final consumer, thus requiring regulation of the conditions for this mixture (Eliziário et al. 2020). Some countries already have instituted limits on hydrogen blending in natural gas networks. Germany presents a range from 2 to 8% depending on certain conditions, France 6%, Spain 5%, and Australia 4% (IEA 2020). According to The National Energy Research Company (EPE), the decision between centralized or distributed hydrogen production can circumvent the lack of a transport and distribution network. Electrolysers or reformers can be installed close to the place of consumption. However, the market must decide on the business model (EPE 2021). As claimed by PNE 2050, it is highly recommended to evaluate the barriers related to transport, storage, and supply infrastructure to define the necessary regulatory improvements, such as the regulation of the mixture of hydrogen with natural gas in the natural gas network, which would minimize the need to build infrastructure and associated costs (EPE 2020a). According to IRENA (2019c), low investment is needed to adapt natural gas infrastructure to transport hydrogen. For instance, the German and European natural gas transmission networks can be gradually converted to hydrogen operation with an investment of an estimated 10–15% of the cost of new construction (Adam and Engelshove 2020). But blending hydrogen with other gases means that pure hydrogen is no longer available for direct use in different applications, e.g. fuel cell vehicles. So, it raises the matter that extracting pure hydrogen from blended gas is possible. Still, it is expensive and complicated, so there is an economic trade-off between the various hydrogen applications (IRENA 2019b). Regarding the geological storage of hydrogen, PNE 2050 brings up that these issues can be set on the scope of the definition of the regulatory framework for the storage of natural gas (EPE 2020a). In line with EPE (2021), Brazil has no institutional, legal, and regulatory framework suitable for the energetic use of hydrogen. There are still questions concerning institutional and legal governance, who will regulate and supervise the market, issues around safety conditions, certification of processes, human resources, and fuel specification, among other matters. These issues will need to be addressed in the coming years in Brazil and worldwide.

Potential Power-to-X Solutions Using Green Hydrogen The process of converting the power generated from solar and wind sources to different types of energy carriers for use across multiple sectors is called powerto-x solutions (IRENA 2019c). Hydrogen is a clean energy carrier, and it can deliver or store a massive amount of energy, allowing the transport of energy from one place

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to another (EIA 2021). Siemens (2021) stated that in a fossil fuel-based economy, promoting the green transition of different sectors to reach net-zero-carbon emissions by mid-century will require a sector to provide renewable energy from the power sector to support their transition. Hydrogen can integrate renewable electricity with other energy use sectors (Bünger et al. 2016; IRENA 2019b; Siemens 2021). Thus, sector coupling creates extra loads representing new markets for green hydrogen, furthering the integration of high shares of renewables in the power system (Emonts et al. 2019; IRENA 2019b). Brazil’s 2050 National Energy Plan points out that hydrogen has the potential to be applied in different sectors in the country, such as the power sector, transport, and industry sectors such as ammonia production for fertilizer, iron, and steel plants. The document draws attention to hydrogen storage’s role in offering additional power in peak load times for instantaneous power balance, contributing significantly to energy system resilience. Beyond that, green hydrogen has the potential to realize long-term, seasonal power-to-power storage on a large scale (Brey 2020; Colbertaldo et al. 2019). Re-electrification will be possible in hydrogen gas turbines, engines, or fuel cells to provide security of electricity supply in periods of low renewable energy supply or the dry season, as Brazil’s electricity supply is supported mainly by hydropower plants (EPE 2020a; Siemens 2021). The plan also shows that hydrogen tends to be considered in distributed generation technologies as a behind-the-metre storage solution (McIlwaine et al. 2021), being readily transformed into electrical energy used at residential or commercial levels or even industrial and for recharging electric vehicles (EPE 2021; Guerra et al. 2019). Regarding the transport sector, the Brazilian Hydrogen Bus Project represents the starting point for developing a cleaner solution for urban public transport. In the state of Rio de Janeiro, the hydrogen bus was the first project with 100% national technology, launched in 2010 (Miranda and Carreira 2010). The vehicle, developed by the COPPE, a unit of the Federal University of Rio de Janeiro (UFRJ) in partnership with the Federation of Passenger Transport Companies of the State of Rio de Janeiro (Fetranspor) and the municipal and state transport department, is considered the evolution of urban transportation. Another project was carried out in the State of São Paulo, coordinated by the Metropolitan Company of Urban Transport of São Paulo (EMTU/SP) and directed by the MME (Neves and Pinto 2013). In June 2015, three buses were delivered to the state of São Paulo and integrated into the inter-municipal bus fleet (AHK 2019). The missing of refuel stations is seen as a barrier to the use of hydrogen in transportation. To overcome this issue, automakers in Brazil produce synthetic fuels based on hydrogen and biomass to produce biodiesel. These projects are partially financed and supported by the federal program Rota 2030. Furthermore, a Hydrotreated Vegetable Oil (HVO) project is a bet for German companies like Bosch, BASF, Mahler, and Mercedes looking for Brazil’s big truck and bus market (AHK 2019). Hydrogen production from ethanol reform, biomass gasification, and biological conversion are still in their early stages of development (Shahbaz et al. 2020). There are already prototypes that use ethanol in solid oxide fuel cells in vehicles (da Silva

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et al. 2021; Steil et al. 2017). In this case, Brazil, with its ethanol production and distribution structure already established, could replace combustion engines with electric motors, using energy generated by fuel cells, contributing to emission reduction. This technology may represent an essential technological alternative for Brazil in the long run, given its characteristics and relevant role in producing biofuels worldwide (EPE 2020a). Although, with power-to-x solutions, renewable energies can also be used in faroff places, sending power to other regions, states, or even foreign use. (Siemens 2021). It should also be noted that there is already an international hydrogen market; however, this represents less than 10% of the total international hydrogen market in economic value, but it is prospected to have a significant increase (EPE 2021). According to 2017 Observatory of Economic Complexity data, the international trade in hydrogen moved about USD11.75 billion. The biggest exporters were the USA (USD2.22 billion), China (USD1.75 billion), Germany (USD1.33 billion), South Korea (USD1.29 billion), and Norway (USD580 million). The largest importers were China (USD2.78 billion), Japan (USD1.71 billion), Germany (USD921 million), South Korea (USD789 million), and other Asian countries (USD800 million). Brazil’s share was USD335 million in exports and USD61 million in imports (EPE 2021). Currently, there is no considerable hydrogen production from renewable sources worldwide; however, this may change soon (Kakoulaki et al. 2021). According to IEA (2019), international cooperation is vital to accelerate versatile and clean hydrogen worldwide. Trade-in hydrogen will benefit from common international standards. Countries with large renewable resources could drive major economic benefits by becoming net exporters of green hydrogen in a global green hydrogen economy (IRENA 2016).

Conclusion Brazil has been establishing bases for its hydrogen strategy since 2002. However, in the current year (2021), CNPE proposed developing the National Hydrogen Program on a short-term agenda. This movement comes against the international progress of existing global initiatives to set up technologies capable of achieving carbonzero emissions. At the same time, hydrogen has been seen as a vector of the green transition. Despite not mentioning in its NDCs, hydrogen can help overcome some energy challenges to promote the green transition of sectors to decrease emissions and storage for variable renewable sources. In addition, it can bring the security of supply and application in diverse sectors, including transport through power-to-x solutions. The fact that the country has been prospected by international companies and institutions for implementing projects for hydrogen production has speeded up the accomplishment of the Brazilian Hydrogen Program. It is noteworthy that Germany is looking to deploy projects in potential countries (including Brazil) to import

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the hydrogen produced. Combined with Brazil’s renewable potential, these circumstances bring up possibilities for the country to become a hydrogen exporting hub. The Brazilian renewable potential can likely be expanded through hydrogen and cooperation for internal and global green transition. Acknowledgements All the authors gratefully acknowledge support from SHELL Brazil and São Paulo Research Foundation (FAPESP) through the Research Centre for Greenhouse Gas Innovation (RCGI) (FAPESP Proc. 2014/50279-4 and 2020/15230-5), hosted by the University of São Paulo, and the strategic importance of the support given by ANP through the Research & Development levy regulation. Peyerl thanks the current financial support of grant Process 2017/18208-8, 2018/263889, FAPESP. The authors thank the support of the Postgraduate Program in Energy of the Institute of Energy and Environment of the University of São Paulo (PPGE IEE/USP) for all the learning and structure provided. This work was partially financed by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior.

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McIlwaine N et al (2021) A state-of-the-art techno-economic review of distributed and embedded energy storage for energy systems. Energy 229:120461 Miranda PEV, Carreira ES (2010) Brazilian hybrid electric fuel cell bus. In: 18th World hydrogen energy conference 2010, pp 1–5. https://www.osti.gov/etdeweb/servlets/purl/21400936 MME (2021a) Brasil Tem Participação de Destaque Em Evento Internacional Sobre Hidrogênio. https://www.gov.br/mme/pt-br/assuntos/noticias/brasil-tem-participacao-de-destaque-em-eve nto-internacional-sobre-hidrogenio MME (2021b) Panorama Nacional Do Hidrogênio. file:///C:/Users/Sony/Downloads/Programa Nacional do Hidrogênio (1).pdf MME (2021c) Resolução No 6, de 20 de Abril de 2021. Diário Oficial da União Moretti I et al (2021) Long-term monitoring of natural hydrogen superficial emissions in a Brazilian cratonic environment. Sporadic large pulses versus daily periodic emissions. Int J Hydrogen Energy 46(5):3615–3628 MRE (2020) Brazil submits its nationally determined contribution under the Paris agreement.Pdf. Brazilian Foreign Office: Press Release N. 157. https://www.gov.br/mre/en/contact-us/pressarea/press-releases/brazil-submits-its-nationally-determined-contribution-under-the-paris-agr eement#:~:text=Brazil-submits-its-Nationally-Determined-Contribution-under-the-Paris-Agr eement,-Share%3A&text=Based-on (1 May 2021) Nadaleti WC, dos Santos GB, Lourenço VA (2019) The potential and economic viability of hydrogen production from the use of hydroelectric and wind farms surplus energy in Brazil: a national and pioneering analysis. Int J Hydrogen Energy 5:0–11 Najjar YSH (2013) Hydrogen safety: the road toward green technology. Int J Hydrogen Energy 38(25):10716–10728. https://doi.org/10.1016/j.ijhydene.2013.05.126 Neves NP, Pinto CS (2013) Licensing a fuel cell bus and a hydrogen fueling station in Brazil. Int J Hydrogen Energy 38(19):8215–8220 Peyerl D (2018) Tecnologias Disponíveis Para Mitigação Dos Efeitos Adversos Sobre o Meio Ambiente: Das Primeiras Renováveis à Economia Do Hidrogênio. In: Pimental C, Rolim MJCP (eds) Caminhos Jurídicos e Regulatórios Para a Descarbonização Do Brasil. Editora Forum 2021, Belo Horizonte, pp 119–131 Shahbaz M et al (2020) A state of the art review on biomass processing and conversion technologies to produce hydrogen and its recovery via membrane separation. Int J Hydrogen Energy 45(30):15166–15195 Siemens (2021) Power-to-X: the crucial business on the way to a carbon-free world. file:///C:/Users/Sony/Downloads/20211202_Power-to-X-white-paper.pdf Steil MC et al (2017) Durable direct ethanol anode-supported solid oxide fuel cell. Appl Energy 199:180–186 UNFCCC (2015) The Paris agreement, pp 1–5. https://unfccc.int/process-and-meetings/the-parisagreement/the-paris-agreement (16 Feb 2021) Van Dinh N et al (2020) Development of a viability assessment model for hydrogen production from dedicated offshore wind farms. Int J Hydrogen Energy. https://linkinghub.elsevier.com/ret rieve/pii/S0360319920316438 (15 Mar 2021)

Chapter 11

The Future of Diesel: Paths and New Alternatives to Energy Security and Sustainability Luis Guilherme Larizzatti Zacharias, Luiza Di Beo Oliveira, Victor Harano Alves, Xavier Guichet, and Drielli Peyerl Abstract The freight and collective passenger transport sector is highly dependent on diesel oil in Brazil, representing one of the main sources of emissions in the energy sector. In this context, this chapter aims to discuss the role played by diesel in the Brazilian transport scenario, outlining prospects for the adoption of new potential fuels. As alternatives to diesel, biodiesel, liquefied natural gas, electricity, hydrogen, and green diesel were chosen and analysed by six dimensions: regulatory, technological, availability, infrastructure, economic and environmental. It was observed that biodiesel, despite its consolidated production capacity, should not develop beyond the percentage already expected due to technological and resource problems. Infrastructure investments necessary to adopt liquefied natural gas should be carried out in the short term to promote the associated fleet. Green diesel has great potential because of its similarity to fossil diesel; however, the lack of regulation has prevented its development. The adoption of electromobility has great potential in the medium term; however, incentive policies need to be adopted to offset the initial cost. It is L. G. L. Zacharias (B) · D. Peyerl Institute of Energy and Environment, University of São Paulo, Av. Professor Luciano Gualberto, n° 1289, São Paulo, Brazil e-mail: [email protected] D. Peyerl e-mail: [email protected]; [email protected] L. D. B. Oliveira Energy Planning Program, Centro de Tecnologia, Universidade Federal do Rio de Janeiro, Sala 211 Cidade Universitária Ilha do Fundão, Rio de Janeiro 21941-972, Brazil e-mail: [email protected] V. H. Alves School of Economics, Management, Accounting and Actuarial Sciences (FEA/USP), University of São Paulo, Av. Prof. Luciano Gualberto, 908, São Paulo, Brazil e-mail: [email protected] X. Guichet IFP Energies Nouvelles, 1-4 Avenue du Bois Préau, 92852 Rueil-Malmaison, France e-mail: [email protected] D. Peyerl University of Amsterdam, Science Park 904, 1098 Amsterdam, The Netherlands © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Peyerl et al. (eds.), Energy Transition in Brazil, The Latin American Studies Book Series, https://doi.org/10.1007/978-3-031-21033-4_11

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observed that Brazil has several possibilities for diversifying the fuel supply mix, thus contributing to an energy transition towards a low-carbon economy. Keywords Diesel · Alternative fuels · Transport sector · Low-carbon economy · Brazil

Introduction Diesel oil is a liquid fossil fuel derived from petroleum, composed of hydrocarbons with chains of 8–16 carbons and, to a lesser extent, nitrogen, sulphur, and oxygen. It is mainly used in diesel cycle engines (internal combustion and compression ignition) such as trucks and buses (ANP 2021d). Furthermore, the diesel engine has been widely adopted because it is a robust engine, more energy efficient, and more durable than Otto engines. According to its characteristics, it is considered a great emitter of pollutants when burned, releasing considerable amounts of greenhouse gases (GHG) (Re¸sitoØlu et al. 2015). In Brazil, the freight and collective passenger transport sector is completely dependent on the availability of diesel fuel for its movement and, consequently, for the transport of people, products, and services in the country. Approximately, 43% of all fuel consumed in the transport sector is diesel oil (EPE 2020a). The price of goods is directly influenced by the cost of transport associated with the price of this fuel, and it is of national interest to guarantee an affordable price for the activities of this sector (dos Santos Senna 2014). Petrobras, a mixed capital company with a state majority stake, sets fuel prices in Brazil. Until mid-2017, prices were controlled and adjusted according to government policy. With Petrobras adopting a new pricing policy in 2017, prices oscillated substantially, increasing prices for the final consumer. This situation has caused recurrent threats of strikes in the oil and freight sector. For example, in 2018, Brazil stopped due to a massive strike by truck drivers, generating losses of billions for the country (MF and Kanczuk 2018). There were ten days of stoppages, in which the country was becoming more and more under-supplied (Silva et al. 2020). While very few cities are supplied by other means of transport such as pipelines, cabotage, and railways, the stoppage of truck drivers is of great relevance since fuels are transported to refuelling stations by them. The absence of a government plan covering this issue has favoured the intensification of strikes. If the country had a more diversified fuel supply mix, this situation could have been mitigated. Recently, the National Energy Policy Council (CNPE) instituted the Fuel of the Future Programme, which aims to develop and strengthen policies to encourage the use of alternative energy sources for a low-carbon economy. The programme aims to decarbonize our transport sector through sustainable and low-carbon intensity fuels, as well as the application of national vehicle technology (MME 2021). In this context, this chapter aims to discuss the role played by diesel oil in the Brazilian transport scenario, outlining prospects for the adoption of new potential fuels. As alternatives to diesel, biodiesel, liquefied natural gas, electricity, hydrogen, and green diesel

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were chosen and analysed by six dimensions: regulatory, technological, availability, infrastructure, economic, and environmental. The reader is expected to understand the potential and barriers of these fuels to diversify the energy supply mix towards an energy transition to a low-carbon economy in Brazil.

The Diesel Oil Scenario The Development of the Diesel Regime in Brazil From the 1950s, Brazil invested in road transport as the main form of Brazilian transport through political decisions. In this context, until the mid-1980s, diesel was used as fuel in all types of road vehicles (light and heavy). However, because of the 1973 oil crisis, which considerably raised the price of imported oil, the use of diesel was limited. In 1976, Brazil imported about 87.9% of the oil consumed, with high prices being a major problem for the country’s development (EPE 2020a). Consequently, it was decided to subsidize the price of diesel and limit its use only to productive means and freight transport. Thus, while ethanol had already been added to gasoline since the 1920s in imported cars, diesel destined exclusively for trucks and buses was the strategy adopted to reduce dependence on imported oil. Furthermore, the diesel ban was encouraged at the time due to the incipient development of technologies for the use and production of diesel oil: diesel engines were noisy, had low performance, and the fuel had a high sulphur content, without prior control of its emissions (do Carmo 2020). Thus, in 1976, through the Ministry of Industry and Commerce Ordinance n. 346, the sale of diesel passenger cars in Brazil was prohibited. This ordinance was subsequently updated through Ordinance No. 23 of 06/06/1994 of the National Traffic Council (CONTRAN), prohibiting diesel oil consumption in domestic and imported passenger vehicles and mixed use with a transport capacity of less than that 1000 kg. Figure 11.1 shows that although there was a fleet of gasoline-powered buses in 1960, they were discontinued in 1976. Figure 11.2 shows a rapid energy transition process in the country when gasoline trucks were surpassed by diesel trucks in 1970. Similarly, gasoline buses were discontinued in 1976. This replacement was driven by the subsidy given to diesel, making the use of this fuel economically advantageous. In 1979, due to the incentive programme of the Proalcool (a policy of encouraging the production of ethanol as an automotive fuel), trucks powered by ethanol appeared. However, the programme did not prosper for many years, driven by the lack of planning that led to alcohol shortages due to high sugar prices and combined with falling oil prices in the international market (Cortez 2015). In 2019, while gasoline and ethanol represent, respectively, 25% and 20% of the total energy consumption of the transport sector, diesel represents 42% (see Fig. 11.3).

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Number of registered buses

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Dependence on Diesel Oil Imports In Brazil, the downstream sector started consolidating through the incentives to build refineries in the 1930s (dos Santos and Peyerl 2019). The late discovery and exploration of a large quantity of petroleum in the country and the lack of technology made the government invest in refineries, which generated resources to support the oil exploration of the territory (Peyerl 2019, 2021). At the end of 2014, the refining capacity was expanded with the construction of the Abreu e Lima Refinery (RNEST),

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Fig. 11.3 Energy consumption in the transport sector (EPE 2020a)

the first large-scale unit since 1980. Capable of refining heavy oil, the production of this refinery is aimed at the production of diesel, with a higher conversion rate from crude oil to diesel (70%) and with a low sulphur content according to strict international standards (Petrobras 2020d). In 2015, with the increase in oil production due to the Pre-Salt exploration, Brazil achieved “volumetric self-sufficiency” in oil. Currently, among the 17 existing refineries in Brazil, 16 produce diesel (ANP 2021c). Despite this, the country did not become self-sufficient in producing oil products, importing a part of the diesel fuel consumed (Fig. 11.4). As demand has increased, larger imports have been required, representing substantial expenditures. Diesel represents about 40% of the country’s petroleum products production, reaching 42.2 million m3 of diesel oil in 2020. That same year, diesel fuel sales reached 57.5 million m3 (ANP 2021c). Thus, the difference needs to be imported to meet national demand, representing a considerable deficit for the energy sector. From a protectionist perspective, it would be advantageous for Brazil to be selfsufficient in producing oil and oil products, as it would bring greater stability to the Brazilian economy, protecting it from price fluctuations and crises in the international oil market. In addition, the lack of investment in new refineries, the sale of existing ones (Petrobras 2020c), and the change in Petrobras’ pricing policy have led the country to a liberal economy without these potential immunities, oscillating diesel prices for the final consumer.

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Fig. 11.4 Imported and exported diesel volume. Source Elaborated by the authors based on ANP (2020a)

New Oil Fuels Pricing Policy and Truckers’ Strike Until 2017, the pricing policy of Petrobras was controlled by the state. Prices remained frozen, changed only after internal decisions with the government, keeping fuel prices stable. However, since then, Petrobras has adopted the Import Parity Pricing Policy (PPI). This new price policy began to predict fuel readjustments more frequently, including daily ones, reflecting oil variations in the international market, in addition to the fluctuation of the dollar. Diesel prices started to oscillate considerably, leading to unpredictable consumer prices. Figure 11.5 shows how the behaviour of prices has changed with the change in pricing policy. In 2018, there was an increase in diesel prices. In just one month, from April 22 to May 22, 2018, Petrobras readjusted gasoline and diesel prices in refineries 16 times (DIEESE 2018). This led to truckers’ dissatisfaction, triggering a trucker strike across the country. The strike that demanded a reduction in diesel prices lasted ten days, interrupting the circulation of trucks on roads throughout Brazil. The road stoppage and roadblocks caused the unavailability of food, medicine, and services across the country. In addition, the strike hampered the supply of liquid fuels, leaving several gas stations short of gasoline and ethanol and with long lines for refuelling. The Ministry of Finance estimated a loss of R$15.9 billion for the Brazilian economy, with a drop-in industrial production and tax collection (MF and Kanczuk 2018). Without an initial plan to respond to the strike and alleviate the freight transport crisis, the federal government urgently created the National Policy for Minimum Floors of Road Cargo Transport, intending to end the strike that had lasted for days. It was initially instituted with the publication of Provisional Measure No. 832, of 27 May 2018, to promote reasonable freight conditions in the national territory to provide adequate remuneration for the service provided (ANTT 2018). There is a

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Fig. 11.5 Diesel price.1 Source Elaborated by the authors based on ANP (2021a)

strong relationship between Brazil’s dependence on cargo transport that uses diesel as fuel in this scenario. This situation of energy insecurity ends up being aggravated when we are also susceptible to international fuel prices.

Biodiesel Adoption in Brazil Biodiesel Characterization and First Adoption in Brazil The name biodiesel usually refers to the methyl esters of fatty acids, called fatty acid methyl ester (FAME) (EPE 2020b). In Brazil, Resolution No. 45/2014 of the National Petroleum Agency (ANP) defines biodiesel as follows: “fuel composed of alkyl esters of long-chain carboxylic acids, produced from the transesterification and/or esterification of fatty materials, fats of vegetable or animal origin” (ANP 2014). Although the ANP regulations restrict the name biodiesel to fatty acid esters, there are other biofuels, such as green diesel, based on paraffinic hydrocarbons. The Brazilian national project for the production and use of biodiesel (PNPB, in Portuguese) was created in 2004. The main guidelines of the project are a sustainable programme implementation, promoting family farmers’ inclusion, the performance of social inclusion of family farmers, minimum price guarantee, supply quality, and diversification of raw materials to strengthen regional potential (Brasil 2008). Among the main challenges identified by the study group were setting quality standards, utilizing the biomass sub-products, the possibilities of differentiated taxation 1

Diesel S10 refers to the highest quality fuel with ten parts sulphur per million, while regular diesel refers to fuel with 500 parts sulphur per million.

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according to each region, and logistics problems related to biomass source, biodiesel production, and distribution to the consumer centres. The opportunities found were associated with Brazil’s biomass production capacity, fuel research experiments, the availability of underused agricultural regions, the possibility of family farmers’ participation, and reducing dependence on diesel imports (Brasil 2008). PNPB created the Social Fuel Seal (SCS, in Portuguese). The benefits and advantages given to biodiesel developers who have this seal are tax discounts that vary depending on the raw material used and the region of purchase. In addition, producers, who have the SCS, have privileges in biodiesel auctions, as reported in Section “Production, Commercialization, and Distribution of Biodiesel”. The reception of the seal is subject to the acquisition of a minimum percentage of raw materials from family farmers in the year of biodiesel production, the prior signing of contracts for the purchase and sale of these raw materials, guarantee of minimum prices, training, and technical assistance to family farmers.

Addition of Biodiesel to Diesel The reduction of diesel dependence cited as one of the PNPB’s opportunities occurs through the addition of biodiesel (B100) to diesel. This mixture started to appear on an experimental basis in 2004 and, between 2005 and 2007, voluntarily, with an addition of 2%. Through law n° 11,097 of 2005, the addition of 5% became mandatory for eight years, with an intermediate percentage of 2% in three years. Thus, in January 2008, the percentage of biodiesel added to diesel increased to 2%, and in June of that same year, it reached 3%. Participation grew by 1% in 2009 and 2010, reaching the mandatory percentage three years before what was determined by law. For five and a half years, the percentage stagnated at 5%. The law n° 13,033 of 2014 established the new mandatory percentage of biodiesel blending of 10%. This new legislation has as one of its justifications the alignment of the use of biofuel with the National Energy Policy (Law No. 9.478 of 1997), which, among its objectives, are protecting the environment and promoting energy conservation; promoting development, expanding the labour market and valuable energy resources; use alternative sources of energy, through the economical use of available resources and applicable technologies; increase, on economic, social and environmental bases, the participation of biofuels in the national energy matrix; guarantee the supply of biofuels throughout the national territory; promote the country’s competitiveness in the international biofuels market; attract investments in infrastructure for transport and storage of biofuels; mitigate emissions of greenhouse gases and pollutants in the energy and transport sectors, including the use of biofuels. In 2016, Law no. 13.263, of 2016 changed the Law of 2014, defining the new mandatory percentages of 8% for 2017, 9% for 2018, and 10% for 2019. The legislation also determined that after the engine tests and the tests that validated the use of the mixture, the sale of Diesel B15 (B15 refers to diesel blended with 15% biodiesel)

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Fig. 11.6 Addition of biodiesel to diesel. Source Elaborated by the authors based on ANP (2020b)

in the national territory would be authorized. Following Brazilian legislation and ANP resolutions, the historical percentage of biodiesel was represented in Fig. 11.6.

Production, Commercialization, and Distribution of Biodiesel Since the start of the blending voluntarily in 2005, biodiesel production has grown, as shown in Fig. 11.7. However, contrary to what was initially proposed by the PNPB, the two main raw materials for biodiesel in Brazil come from agribusiness and not from family farming. Despite the partial success of the programme with family farming, it is alleged that the most socially excluded farmers—and who were the focus of attention of the formulators—are not benefiting from the programme, highlighting the limits of 7000 6000

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Fig. 11.7 Biodiesel production. Source Elaborated by the authors based on ANP (2021b)

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social inclusion PNPB. In other words, the market instruments created to encourage the insertion of farmers in the poorest regions have not been sufficient to achieve this purpose (Pedroti 2013). In 2019, soybean oil represented 61% of the production and beef tallow, 10.3% (EPE 2020a). The biodiesel production process occurs through transesterification, a chemical reaction between the triglycerides present in oils, animal fats, and primary alcohol, ethanol, or methanol. The alcohol used in Brazil is methanol, produced from natural gas. Even though methanol is cheaper than ethanol, it is a toxic, flammable, and non-renewable substance, which puts at risk the workers in the plants and reduces the positive environmental impact of biodiesel. Another issue should be highlighted, and biodiesel in greater proportions than diesel can cause the formation of deposits in filters and injectors, with consequences on vehicle performance and an increase in the frequency of oil and filter change. Thus, the instability of the biodiesel/diesel mixture has been widely discussed and studied, and it is currently limited to 15% of the biodiesel addition (EPE 2020b). In Brazil, biodiesel is sold through public auctions organized by the ANP. Diesel refineries and importers participate in the auctions to acquire biodiesel to meet the minimum percentages and voluntary use.

New Potential Fuels In addition to biodiesel development policies, the energy transition in the Brazilian transport sector is supported by plans and programmes aimed at a more balanced transport sector. The National Energy Plan 2050, a document that establishes longterm strategies for the Brazilian energy sector, indicates that there should be improvements in energy efficiency, use of alternative sources, and an increase in nonmotorized modes of transport (EPE 2021b). It is also worth noting that freight and collective passenger transport must still be carried out mainly by road. Within this perspective, the document considers the following fuels/technologies as alternatives on the horizon of the transport sector: flex-fuel vehicles (gasoline and ethanol), LNG, CNG, biodiesel, green diesel, electric vehicles, and fuel cells for the utilization of hydrogen. Flex-fuel and CNG vehicles do not qualify as potential diesel substitutes due to autonomy, technical, and power issues (see Chap. 12).

Liquefied Natural Gas (LNG) LNG is obtained by cooling natural gas at cryogenic temperatures below −160 °C. As a result of this process, natural gas in a liquid state has a volume 600 times lower than its volume in a gaseous state, which facilitates its transport through vehicles and vessels to places of difficult access and away from the pipeline infrastructure (EIA 2020).

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LNG is widely used in electric power generation, industry, as fuel for vehicles, and commercial and residential applications. Between 2000 and 2017, the LNG market grew about 7% per year (da Silva et al. 2017), strongly influenced by natural gas’s importance as a transition fuel for a cleaner energy supply mix (EPE 2018). LNG is expected to make up nearly a quarter of the world’s natural gas supply by 2050 and natural gas to be the only growing fossil fuel after 2030 (McKinsey & Company 2021). In Brazil, the tax incentive given to vehicles powered by compressed natural gas contributed significantly to expanding the fleet of gas-powered vehicles in the mid-2000s (Cavalcanti 2005). Despite the cooling of the upward trend in the growth of gas-powered vehicles, the understanding of technology has increased among Brazilians, and gas-powered vehicles are no stranger to the Brazilian reality, which can facilitate the adoption of this type of fuel. Modern legislation such as the “Marco Legal do Gas Natural” will also help enter new players and develop infrastructure that facilitates the deployment and adoption of LNG as a fuel on a larger scale (CNI 2020; Salgado 2009). Currently, Brazil has foreign investment incentives to develop the liquefied natural gas market. In Brazil, the company Golar LNG has already installed a floating storage and regasification terminal (FSRU) in the state of Sergipe to supply the Porto de Sergipe I plant. One of the investment objectives is the exchange of diesel for the direct use of LNG for trucks and commercial vehicles. In addition, the company has partnered with Brazil’s largest liquid hydrocarbon distributor, BR distributor, to supply LNG through its distribution network (Golar LNG 2020).

Electric and Hybrid Vehicles The electrification of the freight transport sector by hybrid and plug-in electric vehicles can help minimize the dependence on diesel oil while reducing atmospheric emissions and noise pollution. The difference between these two vehicle types makes each one more suitable for certain types of activities. Electric vehicles are directly connected to the electric grid, which charges a battery system that feeds the electric motor. This technology can be used as an alternative to light trucks or urban freight vehicles to carry out freight within urban perimeters. In this case, the vehicle range of about 200 km is sufficient to carry out deliveries and return to the distribution centres where the batteries can be recharged (Gonçalves et al. 2020). The battery system is recharged in hybrid vehicles by an internal combustion engine inserted in the vehicle. This technology is an interesting solution to increase the energy efficiency of medium and heavy trucks that travel longer distances without relying on major changes in the supply infrastructure (Gonçalves et al. 2020). Although electrification is an interesting solution for freight transportation, several regulatory, technological, and economic barriers are associated with this technology. One of the most significant difficulties is the need to change vehicles (or at least convert their engines), which does not occur in most of the alternatives analysed in

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this chapter, such as green diesel. This barrier is significant in Brazil, where most truck drivers are self-employed, and their trucks take an average of 18.4 years to scrap (CNT 2019). In addition, electric vehicles have a high price compared to internal combustion vehicles, making it even more difficult for self-employed professionals and logistics companies to replace technologies. Even with reducing maintenance and fuel costs, which reduce the Total Cost of Ownership (TCO) of these vehicles (Lebeau et al. 2013), it is still necessary to look for other ways for truck electrification to be possible to reduce costs or increase revenues. Two main ways of promoting this substitution can be highlighted. The first, which can be aimed at both companies and self-employed professionals, is creating lowinterest credit lines for these technologies. The second, more interesting for fleet owners, is vehicle-to-grid (V2G) regulation, which is still under discussion in Brazil. The possibility of trucks returning energy into the grid and being paid for it can be interesting since the peak hours of energy demand tend to be the same as major traffic jams. Therefore, it would be interesting to stop vehicles in garages, helping the energy distributor meet demand (EPE 2019). However, the Brazilian electricity regulatory agency chose not to regulate this type of activity, highlighting three points: the current stage of electric mobility in Brazil, which is still under development; the model and sectoral regulation, which do not have enough elements to justify the interest in the possibility of supplying energy to the grid; and the impossibility of classifying this type of activity in the compensation system used by distributed microgeneration, since this system only includes generation sources and does not include storage sources (ANEEL 2018).

Hydrogen Hydrogen can be obtained through different raw materials such as water (electrolysis or thermochemical cycles), biomass, and liquid and gaseous biofuels (reform, gasification, or biological processes) (EPE 2021a; IEA 2015). Although there is still no definitive label taxonomy in the literature for the origin of hydrogen production, they can be prematurely defined as follows: “brown or black hydrogen” is that produced from mineral coal without CCUS (carbon capture, use, and sequestration); grey hydrogen is that produced from natural gas without CCUS; “Blue hydrogen” is that produced from natural gas, but with CCUS; and green hydrogen is that produced from renewable sources (wind and solar) through water electrolysis (EPE 2021a). Green hydrogen has received major investments due to the urgency of decarbonization and energy transition of energy systems. However, the green option involves high production costs. The lowest costs are associated with fossil fuels, such as natural gas reform and coal gasification, while the most expensive route is through electrolysis using renewable sources (IEA 2020b). However, it tends to fall in costs and is considered competitive from 2030 for large vehicles such as trucks and buses (Hydrogen Council 2020; IRENA 2019).

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Brazil has already included its use in the government’s strategic plans. In particular, the strategies indicate several competitive paths for Brazil in several technological routes (production of hydrogen using ethanol, hydroelectricity, wind, solar, natural gas, biogas, and other biomasses). The National Energy Policy Council (CNPE) recently pointed to hydrogen as one of Brazil’s priority topics for technological research and development. As for infrastructure, there are prospects of mixing hydrogen in natural gas pipeline networks in percentages and with limited pressures for transport and storage purposes as a better way to use natural gas pipelines and to use significant volumes of hydrogen for energy purposes (EPE 2021a). However, Brazil still does not have hydrogen refuelling infrastructure and credit lines that promote the scrapping of diesel trucks and the switch to hydrogen-powered vehicles. Fuel hydrogen has suitable characteristics to be used directly in internal combustion engines (IC), without major changes in gasoline engines. It has a higher calorific value (approximately 2.6 times more energy per unit of mass than gasoline), a rapid burning speed, a high adequate octane number, no toxicity or potential for ozone formation, and can be blended with alcohol (Balat 2008; Singh et al. 2015). However, one of the biggest challenges in using hydrogen is its on-board storage. It takes large volumes to store the same energy as gasoline due to its low density. Therefore, several storage modes are studied as compressed gas, in the liquid form associated with metal hydrides, cryogenic tanks, etc. (Balat 2008).

Green Diesel Green diesel, commonly called renewable diesel or hydrotreated vegetable oil (HVO), is a renewable fuel for diesel cycle combustion engines produced from renewable raw materials (Petrobras 2020a). Green diesel is a type of biodiesel (paraffinic hydrocarbon base) but obtained from other manufacturing processes: hydrotreating vegetable oil, Fischer–Tropsch process, fermentation, or oligomerization of ethyl/isobutyl alcohol. It is formed by a mixture of hydrocarbons with a chemical composition similar to fossil fuel (drop-in biofuel2 ) (EPE 2020b). Unlike biodiesel, green diesel has no problems in its use in conventional diesel engines and can completely replace diesel fuel (Kalnes et al. 2007). Currently, HVOs represent the third-largest biofuel in volume produced globally, and their production is growing faster than that observed in the ethanol and conventional biodiesel industries. Between 2011 and 2018, conventional biodiesel production increased by 1.7% per year on the European market, while HVO advanced at a rate of 37.1% per year (EPE 2020b). Although Brazil does not yet have plants for the production of green diesel, it has been interested in this technological option, with experimental production carried out by Petrobras at the Presidente Getúlio Vargas Refinery (REPAR) (Petrobras 2020a). This fuel must be used in a mixture of three 2

Drop-in biofuels are defined as “liquid bio-hydrocarbons that are functionally equivalent to petroleum fuels and are fully compatible with existing petroleum infrastructure” (Dyk et al. 2019).

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fuels, mineral diesel, and conventional biodiesel. Production in Brazil can occur from crude soybean oil being processed at existing oil plants, which guarantees a reduction in installation, production, and logistics costs. The biggest barrier related to the large-scale production of green diesel at oil refineries in Brazil is the lack of regulation that defines the parameters and conditions for the commercialization of this biofuel (Cremonez et al. 2021). It is worth noting the high energy consumption in some technological routes can impact production and distribution costs (EPE 2020c).

The Potential Fuel Supply Mix Table 11.1 summarizes the main characteristics of these fuels in the following dimensions: regulatory, technological, infrastructure, availability, economic and environmental. To characterize the implantation potential, the dimensions of each fuel are painted according to the stages of development: initial, intermediate, and advanced.

Conclusion The absence of strong policies to encourage the development and use of new fuels in the freight and passenger transportation sectors keeps the Brazilian system highly dependent on diesel. The country urgently needs to strengthen its energy security by diversifying the fuel and technology possibilities. The development of FAME biodiesel is promising but limited due to technological problems (clogging of filters and injectors), in addition to the need to use a fossil derivative, methanol. Therefore, the increase in the participation of biodiesel in the mixture with fossil diesel is not expected. Fortunately, new fuels have been considered in future within national energy planning. LNG is the fuel with great potential in the present and short term, already attracting multinational companies such as Golar LNG which intends to offer infrastructure and LNG throughout Brazil. Electric and hybrid vehicles have the potential for captive fleets, slow speed, and short distances in the medium term. However, their development is linked to formulating incentive public policies, mainly financial. For example, the city of Rio de Janeiro replaced some of the traditional waste collection vehicles with electric ones. More prematurely, there are hydrogen-powered vehicles. There are many prospects for using hydrogen. However, while the costs to produce green hydrogen and its storage (fuel cells) are not competitive, it does not expect to substantial development in the short and medium term in the country. Finally, with the development of the legal and institutional framework, it is expected that green diesel can be used in the medium term. The greater participation of green diesel in the composition of commercialized diesel will depend on reducing production costs since there are no technological obstacles to its use in diesel cycle engines.

Established regulations. Recent advances in natural gas legislation will have a major impact on the legal modernization of the sector, improving the expansion of infrastructure and the entry of new players

Well-established regulation supported by government incentive programmes

Its addition to mineral diesel is limited because it can deposit in the filters and injectors. High percentages of biodiesel can cause loss of vehicle performance and increase the periodicity of oil and filter changes

Regulatory

Technology LNG trucks usually have to replace diesel engines with Otto engines (spark needed) (SCANIA 2022). As it has fewer impurities than diesel oil, it reduces the formation of deposits and corrosion

Liquefied natural gas (LNG)

Biodiesel (FAME)

Aspect

Table 11.1 Matrix of fuel development

Disruptive technology, but with few manufacturers. Battery electric vehicles are assumed to reach an average driving range of 350–400 km by 2030 (IEA 2020a)

Established regulations for installing the charge station, but the regulation for V2G is still under discussion

Electricity

There are well-established processes to produce hydrogen. However, hydrogen vehicle storage is difficult. Increasing energy density by volume requires high pressures for storage in the gaseous state or cryogenics for storage in the liquid state (Singh et al. 2015)

An adequate institutional, legal, and regulatory framework for hydrogen is still lacking

Hydrogen

(continued)

It is a drop-in fuel with no restriction for use in diesel cycle engines. The existence of different technological routes facilitates production (EPE 2020b)

The absence of regulation, with definitions of the specifications, hinders the development of HVO

Green Diesel (HVO)

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Brazil has large reserves of natural gas, having a record in natural gas production in 2020. Increased storage and liquefied capacity can also increase LNG supply

The cost depends on the region and infrastructure used. Very advantageous in regions with wide supply. In some Brazilian states, such as Rio de Janeiro, there are tax incentives

Brazil has enough raw material to produce biodiesel (mainly soy) with a consolidated production structure. In addition, it has the capacity to expand to replace mineral diesel in the commercialized mixture

Although biodiesel prices are generally higher than those for mineral diesel, they are supported by government programmes that require the addition of biodiesel to mineral diesel

Availability

Economic

It can be distributed through the existing infrastructure network with low modifications. Easy transport through trucks and barges allows supply to regions away from the pipeline network

Brazil has established an infrastructure for the mixing and transport of biodiesel by road

Infrastructure

Liquefied natural gas (LNG)

Biodiesel (FAME)

Aspect

Table 11.1 (continued)

Electric vehicles have a higher initial cost, but TCO is reduced when travelling long distances

Brazil does not have credit lines that promote the scrapping of diesel trucks and switch to hybrid or electric vehicles

Light trucks: charge stations in distribution centres. Medium and heavy trucks: hybrid technology without the need for a charging station. If electric trucks are needed to travel long distances, there is a lack of infrastructure on the highways

Electricity

The lowest costs are associated with fossil fuels, while the most expensive route is through electrolysis using renewable sources. However, it tends to decrease in costs and is considered competitive until 2030 for heavy vehicles (BNEF 2020)

Brazil does not have a hydrogen refuelling infrastructure and credit lines that promote the scrapping of diesel trucks and the switch to hydrogen-powered vehicles

It can be distributed through existing pipelines. There is a prospect of mixing hydrogen in natural gas pipeline networks in percentages and with limited pressures for transportation and storage purposes (EPE 2021a)

Hydrogen

(continued)

Depending on the technological route, it uses energy-intensive processes to impact production costs and the final price (EPE 2020c)

Brazil does not have plants to produce HVO

It can be distributed through existing pipelines. In addition, it is a chemically stable product that does not change throughout its logistics chain

Green Diesel (HVO)

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It partially replaces diesel but is not 100% renewable due to the use of methanol. Most of it is produced through soy oil, a crop with several environmental impacts

Environmental The cleanest of fossil fuels, despite the lower potency, has the lowest pollutant emission rates among fossil fuels, being an excellent candidate for transition fuel (Tilagone et al. 2005)

Liquefied natural gas (LNG) Zero atmospheric emissions during use and considering that the Brazilian electrical supply mix is mainly renewable, emissions in the life cycle are also reduced. Furthermore, electric vehicles do not generate noise, contributing to the reduction of noise pollution (EPE 2019)

Electricity

Bold: initial development, italic: intermediate development, bold italic: advanced development

Biodiesel (FAME)

Aspect

Table 11.1 (continued)

The environmental potential depends on the source of hydrogen production, such as brown, grey, blue, or green hydrogen (coal, natural gas, and renewable sources, with or without carbon capture) (EPE 2021a)

Hydrogen

HVO reduces about 70% of greenhouse gas emissions compared to mineral diesel (derived from petroleum) and 15% with biodiesel, for the same vegetable oil of origin (Petrobras 2020b)

Green Diesel (HVO)

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Therefore, it is observed that Brazil has several possibilities for diversifying the fuel supply mix, capable of increasing energy security and ensuring availability and affordable fuel. Brazil has experience conducting rapid energy transition processes, as noted in the use of diesel exclusively for trucks and buses and the Pro-alcohol programme that successfully replaces the fleet of gasoline and diesel vehicles with alcohol-powered vehicles. The current driving force is urgent and sufficient for the country to develop an energy transition towards a low-carbon economy. However, more comprehensive and strategic studies are needed to identify the best paths for safe and sustainable energy system improvement. Would it be better to invest in oil production and refining infrastructure, or would it be better to privatize and direct these resources to new energy sources? What are the best routes for the diversification of the energy system? What will be the real fuel of the future? As in previous transitions, the success of the transitions depends on the policies, technologies developed, and existing resources. It is expected that the government will induce this new transition through new strategies, measures, and programmes adopted as the Fuel of the Future Programme. Acknowledgements The authors gratefully acknowledge the support from Shell Brasil and FAPESP, through the Research Centre for Gas Innovation hosted by the University of São Paulo (Proc. 2014/50279-4). Peyerl and Zacharias thank especially the current financial support of grant processes 2017/18208-8, 2018/26388-9, and 2020/02546-4 (São Paulo Research Foundation— FAPESP). This work was partially financed by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior.

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Chapter 12

Trends and Prospects for Transport Fuel Consumption in Brazil Celso da Silveira Cachola, Ana Clara Antunes Costa de Andrade, Letícia Schneid Lopes, Evandro Matheus Moretto, and Drielli Peyerl

Abstract According to the Nationally Determined Contributions, Brazil has committed to reducing its greenhouse gas emissions from the transport sector and pledged to increase the share of biofuels in its energy matrix by approximately 18% in 2030. Thus, this chapter has two objectives: (i) to calculate greenhouse gas emissions from Brazilian road transport between 1970 and 2020; and (ii) to predict the Brazilian energy consumption of different fuels and GHG emissions for the 2020s. In conclusion, Brazil tends to reach its Nationally Determined Contributions target, increasing the use of biofuels in its energy matrix. Despite an optimistic scenario of increased use of biofuels, it should be noted that the consumption of gasoline also tends to grow, and greenhouse gas emissions tend to fall not significantly. Therefore, a vigorous energy transition to a low-carbon matrix in Brazilian road transport is not expected in the coming years. Keywords Transport fuel consumption · Low-carbon transition · Road transport · Brazil C. da S. Cachola (B) · A. C. A. C. de Andrade · D. Peyerl Institute of Energy and Environment, University of São Paulo, Av. Professor Luciano Gualberto, n° 1289, São Paulo, Brazil e-mail: [email protected] A. C. A. C. de Andrade e-mail: [email protected] D. Peyerl e-mail: [email protected]; [email protected] L. S. Lopes Institute of Geosciences, University of São Paulo, Rua do Lago, n° 562, São Paulo, Brazil e-mail: [email protected] E. M. Moretto School of Arts and Humanities, University of São Paulo, Rua Arlindo Béttio, n° 1.000, São Paulo, Brazil e-mail: [email protected] D. Peyerl University of Amsterdam, Science Park 904, 1098 Amsterdam, The Netherlands © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Peyerl et al. (eds.), Energy Transition in Brazil, The Latin American Studies Book Series, https://doi.org/10.1007/978-3-031-21033-4_12

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Introduction The transport sector fulfils the demand for mobility in the world society, facilitating the movement of people and goods across the planet (CNT 2017; Salvi and Subramanian 2015). This sector comprises different modes, namely: (i) road transport; (ii) rail transport; (iii) air transport; (iv) maritime transport; (v) intermodal; and (vi) pipelines (Mihlfeld & Associates 2019; Salvi and Subramanian 2015). In the world, among the six modes, the most used and the which emits the most carbon is road (McBain and Teter 2021), as it provides mobility and delivery in a versatile way. Through road transport, “door-to-door” deliveries are made, i.e., the product leaves the factory and can be easily delivered to the consumer’s home (Mihlfeld & Associates 2019; Salvi and Subramanian 2015). In 2018, Brazilian transport sector was responsible for 32.8% of energy consumption in the country, a total of 84,073 ktoe (EPE 2019). The country followed the global trend in that sector and the main mode used was road. In 2018, it accounted for about 93% of the energy consumption in the whole transport sector (EPE 2019). In 2016, Brazilian road transport was the segment with the largest share of the freight transport matrix (61%) and the main mode of passenger transport, regardless of distance (CNT 2017). It was also the mode that employed the most and had the largest share in the production of wealth in the transport sector (CNT 2017). The primary sources of energy consumed in the Brazilian road mode in 2018 were diesel oil (45.2%) and petrol (27.6%) (EPE 2020), showing a great dependence on petroleum derivatives. For this reason, road transport between 1990 and 2015 (data availability period) had the highest greenhouse gas (GHG) emissions compared to other modes of transport. It is noteworthy that emissions from road transport in Brazil were greater than emissions from the energy, industrial, residential, agricultural, commercial, and public sectors considering only emissions from energy consumption (excluding emissions from industrial or agricultural processes) (MCTIC 2017). GHG emissions are one of the most significant stakes on the current global environmental agenda due to global warming concerns (Climate Chance Association 2018). In 2015, during the 21st Conference of the Parties (COP 21), the Paris Agreement was signed, and it aims to keep the planet warming at 1.5 °C, thus reducing GHG emissions from signatory countries (Jayaraman 2015; Souza and Corazza 2017). Through its Nationally Determined Contributions (NDC) in the Paris Agreement, Brazil has committed to reducing its GHG emissions from the transport sector by promoting efficiency measures, improving transport infrastructure, and promoting public transport in urban areas (Brazil 2015). The country also pledged to increase the share of biofuels in its energy matrix by approximately 18% in 2030 and increase the share of biodiesel in diesel oil sold in its territory (Brazil 2015). Therefore, this chapter has two objectives: (i) to calculate GHG emissions from Brazilian road transport between 1970 (the first year of availability of EPE energy consumption data) and 2020; and (ii) to predict the energy consumption of different fuels and GHG emissions in road transport for the 2020s. Thus, the guiding questions of this research are: in the 2020s, can there be an increase in the consumption of

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biofuels? In the coming years (2020–2030), could there be an energy transition to a low-carbon supply mix in Brazilian road transport? In addition to its introduction (Sect. 12.1), this chapter includes a contextualisation of the overview of fuel consumption, showing the main plans adopted in the country, measures, and possible fuels to be used in the future (Sect. 12.2). Section 12.3 addresses the methodology for calculating GHG emissions and predicting future fuel consumption in the 2020s, and Sect. 12.4 shows its results. Section 12.5 includes the discussion of the results found, and Sect. 12.6 addresses the final considerations and answers to the guiding questions for this chapter.

The Fuel Consumption in Brazilian Road Transport Vehicle Pollution Control Measures The first measure created to control vehicle pollution in Brazil was the Programme for the Control of Air Pollution by Motor Vehicles (PROCONVE), developed by the federal government in 1986. PROCONVE aimed to reduce pollutant emissions from new vehicles by implementing phases that gradually force the automobile industry to reduce pollution emissions from new vehicles (Dullius et al. 2017). The programme has contributed to reducing emissions of various pollutants, but the amount the vehicles more than tripled between the programme’s creation and the first half of the 2010s, thus decreasing the beneficial effects of the measures (Carvalho 2011; de Almeida D’Agosto 2015). In comparison, nowadays, a diesel vehicle emits less than 20% of the pollutants it used to 20 years ago (Carvalho 2011). After about seven years of the start of PROCONVE, the National Environment Council (CONAMA) established pollutant emission limits for motorcycles, thus creating the Air Pollution Control Programme by Motorcycles and Similar Vehicles (PROMOT), launched in 2003 (Carvalho 2011). But even with the implementation of these programmes and the development of new technologies, inspection and maintenance practices are required, to ensure the effectiveness of reducing vehicle emissions (Cachola et al. 2021). It is also worth mentioning that PROCONVE and PROMOT do not limit GHG emissions. In the international context, the objective of reducing carbon dioxide (CO2 ) emissions made governments adopt one-off measures to reduce transport emissions. In 2009, at the Conference of the Parties at Copenhagen (COP 15), Brazil has assumed commitments that resulted in the stabilisation of GHG emissions. These commitments involve the use of biofuels and research for energy alternatives (similar to the Brazilian NDCs) (Asselt et al. 2010; MMA 2020). Thus, the Climate Change National Policy (PNMC) was created in 2009, as a starting point to regulate global warming mitigation actions in Brazil and serving as a climate change combat strategy (da Motta 2010). The PNMC’s objective is to achieve certain targets for emission

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Fig. 12.1 Evolution of fuels in the transport segment in Brazil1 based on EPE (2021)

reduction, and this policy establishes the development of sectoral mitigation and adaptation plans at local, regional, and national levels (Brazil 2010).

Energy Sources for Transport In 2011, 111.3 billion litres of fuel were distributed in Brazil, a 3.7% growth over the previous year. Considering only diesel oil, petrol, ethanol, and vehicular natural gas (VNG), commercialisation yielded USD128.80 billion (USD37.60 billion in taxes only) (Dualibe 2012). In Brazilian road transport, as shown in Fig. 12.1, the main fuels used are fossil fuels, such as diesel and petrol (de Almeida D’Agosto 2015).

Conventional Fuels The development model consolidated throughout the last century is firmly based on the use of fossil fuels to maintain economic activity levels, with transport being a critical issue in development and essential activity for society (Ferreira 2011). At the beginning of the twentieth century, petrol started to be commercialised in Brazil along with the first automobiles, being imported mainly from international companies, starting a process of external dependence in the supply of oil derivatives (SINDICOM and Noel 2010). 1

Figure available in color format at: https://fuelconsumptionbr.herokuapp.com/.

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Internal combustion engines, known as Otto-cycle engines, can work with different fuels, such as ethanol and petrol. Still, the latter predominance is the most expensive and polluting option, though more efficient. In the diesel cycle engine, having diesel oil and biodiesel as fuels, diesel oil stands out due to its high energy density and economic feasibility, and it is the most polluting. As a result, oil remained the raw material of choice for these fuels, in line with the world demand and reserves, expanding as a result of continuous technological progress over the past few years (Daemme et al. 2014; National Research Council 2013; Pereira et al. 2005; Torres et al. 2006). Dependence on fossil fuels is still present in Brazilian society. In 2009, the transport sector was the most significant influence on Brazilian households’ carbon footprint. The effect of transport GHG emissions on the carbon footprint of households was substantial in all income groups due to the consumption of petrol by family vehicles and diesel oil in public and freight transport (Cachola and Pacca 2021).

Natural Gas Natural gas (NG) was discovered in Brazil in 1922 (Peyerl 2019), but the lack of technology and qualified labour added to the difficulty in inserting gas into the Brazilian energy supply (Peyerl 2019). Thus, Brazil has started integrating NG into the energy supply mix only after the oil crisis in the 1970s (Moutinho dos Santos and Peyerl 2019). Later, in 1987, the Ministry of Mines and Energy launched the National Gas Plan (Plangás) through government plans aimed at replacing diesel oil (Moutinho dos Santos et al. 2002). In terms of international influence, the construction of the Bolivia–Brazil gas pipeline (Gasbol) was the main action in Brazil’s NG context. Gasbol started its commercial operation in 1999, representing a significant step towards diversification of the Brazilian energy supply mix, and intensifying the use of NG (Filho 2002). In recent years, NG has been noticed in studies and research, and, despite its fossil origin, it serves as an element of the energy transition to renewable energies. In the transport sector, its use is due to its combustion being less polluting when compared to other fossil fuels. VNG can replace other fuels, such as petrol, which is more harmful to human health and the environment (Leal et al. 2019; Mouette et al. 2019; Moutinho dos Santos et al. 2002). According to Mouette et al. (2019), the use of liquefied natural gas (LNG) to transport cargo in the countryside of the state of São Paulo would enable a significant reduction in fuel costs and GHG emissions.

Ethanol Ethanol has a positive energy balance, emitting less carbon into the atmosphere than oil (Cortez 2016). Sugarcane ethanol also has several advantages over other fuels (de Oliveira Sartori 2017). In Brazil, the primary source of alcohol production is sugarcane. At the beginning of 1530, sugarcane was the main extracted product in the

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country. However, the alcohol that originated from sugarcane began to be negotiated only between the 1920s and the 1930s (de Moraes and Bacch 2014; Soares et al. 2009). In 1931, the federal government approved Decree 19.717, determinating the addition of anhydrous alcohol (without water) to imported oil in the proportion of up to 5%, aiming to use the surpluses of the national sugarcane production (Cortez 2016). The growth in the use of ethanol took place with the National Alcohol Programme (Proálcool), created by a government decree in November 1975. This Decree was created to avoid increasing external dependence, mainly due to oil price shocks. The value of oil price soared in 1973 (when the so-called first oil shock occurred), contributing to the search for new forms of fuel (Carvalho 2011). Proálcool programme focused on increasing bioenergy production, replacing petroleumderived fuels, and becoming the pioneer in renewable energy in Brazil (SINDICOM and Noel 2010). Due to the significant instability of the supply and influenced by the sugar market, Proálcool almost ended in the 1990s. To guarantee a minimum market for alcohol, the government resumed the policy of mixing alcohol in petrol and using an environmental justification as an incentive. Thus, the alcohol mixture reached 25% of the total volume of petrol, which caused a reduction of about 18% in the CO2 emissions of petrol-powered vehicles (Soares et al. 2009). Proálcool could be considered one of the biggest biofuel programmes globally in terms of efficiency and socio-environmental benefits (Oliveira and Zanin 2015). In 2016, Brazil was one of the largest sugarcane producers in the world, producing 28 billion litres of ethanol in the 2015/2016 harvest, according to data from the Sugarcane Industry Union (Unica) (Cortez 2016). This was due to factors intrinsic to Brazil, such as the amount of arable land, great amount of solar radiation, diversity of climate types and species, and new technologies (de Oliveira Sartori 2017).

Biodiesel There are several ways to produce biodiesel. The main raw materials are vegetable oils, such as palm oil, copaiba, peanuts, soybeans, cotton, avocado, and castor beans; it is also possible to produce it using animal fats (de Almeida D’Agosto 2015). In Brazil, the biodiesel emergence occurred simultaneously with sugarcane ethanol in the 1970s, but unlike alcohol, it remained restricted to academic research without developments in its commercialisation. Only in 2003, biodiesel started to gain more space through a decree (currently it was revoked by Decree No. 9784, 2019) that created an Interministerial Working Group, responsible for presenting studies addressing the feasibility of using vegetable oil and proposing actions for its development (Abramovay 2009; Férres 2012). Thus, through the studies, the reports’ conclusions pointed out that the incorporation of biodiesel into the Brazilian energy supply mix is of paramount importance since its development would bring environmental and economic advantages (Férres 2012). In 2004, the National Programme for the Production and Use of Biodiesel (PNPB) was created as the first major programme

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related to this kind of fuel. Therefore, biodiesel was defined as a mandatory fuel in the country, mixed with oil diesel with a percentage of 2% in 2008, 4% in 2009, 5% in 2010, 6% in 2014, and 8% in 2017. Finally, according to Law 13.263/2016, the content of biodiesel in diesel mixture would be 10% (Abramovay 2009; Férres 2012). In Brazil, the main raw material to produce biodiesel is soy oil since it is the primary vegetable oil produced in the country. However, there is a small percentage of other types. Data from the Petroleum National Agency (ANP) (ANP 2018) shows that in 2012, 81% of biodiesel production was made from soybean oil, 13% was from animal fat, 4% from cotton oil, and the other 2% was another type of oil. Comparatively, in 2018, the use of soy as a raw material fell to 70%, animal fat rose and cotton oil fell to 16% and 1%, respectively, and other oils rose to 13%. Thus, it can be observed that biodiesel production derives from several types of raw materials. Soy is the main raw material for biodiesel production due to the entire structure already found in Brazil and the low price for the final consumer (de Oliveira Costa Viegas and Arantes, 2018). Currently, the country presents a favourable scenario for the development of biodiesel. For instance, in 2009, biodiesel production stood at about 3 million m3 , and in 2018, it virtually doubled, reaching about 5.5 million m3 (ANP 2019). The biodiesel production from soy or animal fat tends to increase over time. Moreover, its growth is due mainly to institutional reasons, since there are warrants for increasingly adding biodiesel to diesel, mostly using the environmental justification. In 2017, in Brazil, according to EPE (2019), emissions avoided using ethanol amounted to 47 million tonnes of CO2 e, and the use of biodiesel to about 10.4 million tonnes of CO2 e. Biofuels are a concrete alternative, not only to guarantee self-sufficiency and energy security but also to strengthen Brazil on the international stage (Azevedo and Lima 2016).

Possible Fuels for Future Currently, due to the environmental impacts resulting from GHG emissions from fossil fuel use, other fuels are being increasingly researched (Odell 2004). In this scenario, the theme of decarbonisation is developed. It is a concept on which the insertion of new energy alternatives is based. They have a decreasing amount of carbon in their composition, thus following the trend of reducing GHG emissions (Rohrich 2008). However, even if the environmental concern influences the decisionmaking regarding the use of energy, the concern that still prevails, for the most part, is the influence of economic and technological factors (Goldemberg and Villanueva 2003; Holdren and Smith 2000). Electric vehicles, another less polluting option that can be developed, are divided into two main categories. Hybrid electric vehicles combine an internal combustion engine with a generator, a battery, and one or more electric motors. The second category is of pure electric vehicles, which are entirely powered by electricity provided by batteries, fuel cells (FC), solar energy, or being directly connected to the electric

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network, like trolleybuses (Castro and Ferreira 2010). In Brazil, electric cars may become an important alternative, but it will be necessary to create opportunities for its use for this to come to fruition. The Brazilian electric cars fleet is still early, but their use on a large scale would bring strategic benefits in the long run. It is worth mentioning that even in the case where electricity is generated from fossil fuels, such as coal and NG, the electric car has the advantage of concentrating GHG emissions in energy generating sources, which are subject to regulation for its mitigation (Baran and Legey 2011). In addition to electricity, another fuel that may be included in the energy supply mix of road transport is hydrogen (H2 ). Brazil is a leader in H2 technologies in Latin America (see Chap. 11). There are, however, many bottlenecks, such as deficiency in the training of human resources, maintenance of equipment, competition with foreign companies, etc. For H2 to become a consolidated technology in the country, there is a long way to go (Centro de Gestão e Estudos Estratégicos 2010), there is no expectation for the use of H2 as fuel until 2030 in Brazil (EPE 2021). Biogas can be mentioned in the panorama of sources for mitigating GHG emissions in road transport. Biogas is a mixture of CH4 , CO2 , and small amounts of other gases produced by anaerobic digestion of organic matter in an oxygen-free environment. Worldwide, in 2020, 60% of online and developing plants injected biomethane into the gas network distribution, with a further 20% providing fuel for vehicles. The remainder provided CH4 for various local end uses (IEA 2020). The use of biogas in vehicles can reduce pollutant emissions by up to 90% compared to petrol, and its use prevents the release of CH4 into the atmosphere, thus reducing GHG emissions in road transport. Biogas can also supply any VNG kit (CETESB 2017).

Structure of Emission and Predictive Model Calculation Study Design In this work, energy consumption data were used to quantify CO2 e emissions from road transport between 1970 and 2019. The authors also elaborated a predictive model of energy consumption (and emissions) for 2020–2030. Such a model was created using the same data of the CO2 e emissions’ quantification but also adding economic data. The base scenario considers the average GDP growth, and the optimistic scenario considers a higher growth value of it.

National Energy Balance—BEN The study used energy consumption data from the National Energy Balance (Balanço Energético Nacional—BEN), made available from 1970 to 2019. The consumption

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Table 12.1 CO2 e emissions (IPCC 2006 apud. Senai 2006) Fuel

CO2 (kg/TJ)

CH4 (kg/TJ)

N2 O (kg/TJ)

CO2 e (kg/TJ)

Petrol

69,300

25.0

8.0

72,305

Diesel oil

74,100

3.9

3.9

75,390.9

Liquefied petroleum gas

63,100

62.0

0.2

64,464

Vehicular natural gas

56,100

92.0

3.0

58,962

Ethanol (bioethanol)

0

0

0

0

data for road transport are available in a unit of 103 tonnes of oil equivalent (toe) and comprise the following energy sources: (i) NG; (ii) diesel oil; (iii) biodiesel; (iv) gasoline; (v) anhydrous ethanol; and (vi) hydrated ethanol.

Emissions Analysis To calculate emissions from road transport between 1970 and 2019, and the predictive models from 2020 to 2030, the study by the Intergovernmental Panel on Climate Change (IPCC) (IPCC 2006) was used. Table 12.1 shows the emission factors for each energy source. It is worth noting that one kilogramme (kg) of methane (CH4 ) emission is equivalent to 21 kg of CO2 e, and one kilogramme of nitrous oxide (N2 O) emission is equivalent to 310 kg of CO2 e (IPCC 2006). As previously described, the BEN data are available in 103 toe, so toe to terajoule (TJ) was converted. One toe is equivalent to 42 gigajoules (GJ), that is, 0.042 TJ.

Regression Energy consumption is causally related to the economy of a given country. In this way, a regression model was elaborated for each fuel type available. Subsequently, a predictive consumption model was developed between 2020 and 2030. The regression used in this work was the Multivariate Adaptive Regression Spline (MARS), a form of regression developed by Jerome H. Friedman (Friedman 1991) in 1991. In this work analysis, the two variables used were: (i) gross domestic product (GDP) of Brazil (1970–2019) and (ii) the energy consumption in TJ for each fuel. The energy consumption was the dependent variable, i.e., the variable to be foreseen. The GDP was the independent variable, i.e., the variable used to predict the energy consumption values. Moreover, the r-square was used to assess how well the model accommodated the data, i.e., how well the model represents the reality in this research methodology. The r-square varies between 0 and 1, with results closer to 1 showing that the model accommodated the data in a better way (Bruce and Bruce 2019).

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Predictive Model Using MARS, a predictive model of energy consumption was created. In this model, a basis scenario and an optimistic scenario were considered for GDP values. Moreover, in these GDP values variation and inflation data were also considered, foreseen by the Instituição Fiscal Independente in the Fiscal Monitoring Report, November 2019 (Instituição Fiscal Independente 2019). Finally, Python version 3.8.4 was used and the pyearth package for creating the models.

Limitations When writing this work, only the GDP data for 2020 had been released, so the emissions for that year were prepared in a predictive manner. The impact of the COVID-19 pandemic was not considered in the predictive model, and it only finds gross GDP as an independent variable, without considering other independent variables.

Emissions Values for 1970–2030 and Perspectives for Energy Consumption for 2020–2030 Carbon Dioxide Equivalent Emissions from 1970 to 2019 Figure 12.2 shows the evolution of energy consumption and CO2 e emissions between 1970 and 2019. It is worth of note the gradual increase in energy and emissions over the years. However, in recent years, there has been an oscillation in energy consumption and a small drop in emission values. In 1970 was consumed about 477 thousand TJ in road transport, already in 2019 was consumed 3.3 million TJ. In 1970 was emitted about 37 million tonnes of CO2 e, already in 2019 was emitted about 178 million tonnes of CO2 e in the sector.

Predict Energy Consumption and Emissions from 2020 to 2030 Table 12.2 shows the r-square values of the regression models for each type of fuel. The lowest values were found in the petrol and hydrated ethanol models. The other models obtained r-squared > 0.95. Figure 12.3 shows the graphs of the regression models. There is a tendency to increase biofuels and NG, a modest increase in petrol, and a decrease in diesel oil. It can be noted that the use of diesel oil decreases parallel to the rise in GDP values (x axis), in the years corresponding to the study period. On the y-axis is the fuel

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Fig. 12.2 Emissions of CO2 e from 1970 to 20192 based on EPE (2021) Table 12.2 Values of R-square

Fuel

r-square

Natural gas

0.989

Diesel oil

0.995

Biodiesel

0.986

Petrol

0.857

Anhydrous ethanol

0.971

Hydrated ethanol

0.903

consumption in TJ. On the x-axis the forecast value of GDP in millions of reais. That is, on the x-axis, for example, values of 8 M represent 8 trillion reais. Figure 12.4 shows the evolution of CO2 e and fuels between 2020 and 2030 on the basis and optimistic scenarios. Then, it is possible to note that there is a small decrease in emissions in the basis scenario. On the left side of Fig. 12.4 can be seen the forecast of CO2 e emissions between 2020 and 2030. In 2020 emissions are expected to reach around 183 million tonnes of CO2 e, while in 2030, emissions are expected to reach around of 177 million tonnes of CO2 e in the basis scenario and about 176 million tonnes of CO2 e in the optimistic scenario. On the right side, the forecast of energy consumption between 2020 and 2030 can be seen. In 2020, energy consumption of about 3.33 million TJ in Brazilian road transport is expected. In 2030, consumption of 3.8 million TJ is expected in the basis scenario and 3.9 million TJ in the optimistic scenario.

Paths to Zero Emission in Brazilian Road Transport Brazilian road transport is the main consumer of fossil fuels in the energy sector (Sauer and Rodrigues 2016), and this consumption has been responsible for a gradual 2

Figure available in color format at: https://fuelconsumptionbr.herokuapp.com/.

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Fig. 12.3 Fuel consumption and GDP in the 2020–2030 predictive model based on EPE (2021)

increase in GHG emissions since 1970 (see Fig. 12.2). Population in general and, specifically, urban agglomerations tend to grow even more, driving an increase in transport consumption. As a result, there is also an increase in GHG emissions (Carvalho 2011). However, this growth can be mitigated by using biofuels instead of fossils fuels. It can be noted that in the middle of the past decade, GHG emissions did not follow the energy consumption in road mode (see Fig. 12.2). GHG emissions had a greater drop than consumption, and this difference was due to the higher

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Fig. 12.4 Fuel consumption from 2020 to 20303 based on EPE (2021)

consumption of biofuels in the Brazilian road transport energy supply mix (EPE 2020). In a globally context, the world’s interest in biofuels has increased since the 2000s, due to concerns about the development of renewable and clean energy sources. Biofuels demand also increased due to: (i) the increase in oil prices; (ii) the benefits that the expansion of biofuels usage can bring to the agricultural sector; and (iii) the need of GHG emissions reduction (Oliveira and Zanin 2015). After years of biofuels usage, Brazil has proposed regulations for all biofuels, mainly ethanol and biodiesel. Furthermore, the newest initiative in Brazil to promote cleaner fuels is the National Biofuels Policy, or simply RenovaBio, created in 2017. This policy aims to establish an incentive to expand the production of biofuels in the country based on predictability, economic and social environmental sustainability, and compatibility with the growth of the market (Grassi and Pereira 2019). As RenovaBio is put into practice, an increase in biofuels usage is expected, reducing GHG emissions. The policy also tends to be an important tool in the coming years, increasing biodiesel consumption (as shown in Fig. 12.3). NG can be considered a bridge to a low-carbon-energy supply mix despite being a fossil fuel, and VNG proved to be a good alternative, economically and environmentally, to replace the vehicular use of other fossil fuels (Khan et al. 2016). According to the results shown in this chapter, NG consumption tends to grow in the 2020s and could grow notably as NG can replace other fossil fuels, bringing energy security. In contrast, except for biofuels, renewable fuels do not consolidate (Dutu 2016). NG can also be a bridge to the use of H2 in FC, as it can play a significant role in generating H2 (Ogden et al. 2018). In addition to using biofuels and other alternative fuels to contribute to reducing emissions, it is necessary to consider more sustainable urban mobility. In this scenario, green mobility stands out, assuming great importance when positively influencing sustainability. According to Cupolillo et al. (2017), it appears that individual transport (cars or motorcycles), which corresponds to about 35% of vehicles in urban centres, is responsible for 60% of CO2 emissions, while the share of public transport 3

Figure available in color format at: https://fuelconsumptionbr.herokuapp.com/.

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varies from about 15–27%. In other words, it is necessary to rethink the means of transport: to encourage public transport, the displacement through cycling, walking (when possible), the implementation of a rail transport system, to invest in trolleybuses (electric buses), and to plant more trees in urban centres, which can help with temperature regulation and heat islands. The main measures to be taken are: (i) control of emissions from motor vehicles, (ii) use of cleaner fuels, (iii) vehicle inspection, (iv) investment in the public transport system, and (v) control and management of urban traffic (Cupolillo et al. 2017). All options pointed out can reduce the oil dependence and carbon emissions in road transport. The main challenges are technological advances, the countries’ energy security, the lack of standardisation and regulations that guarantee the quality, safety, storage, and supply of those fuels, and finally, the lack of specific public policies to encourage their production (Castro and Ferreira 2010). The search for energy efficiency must be constant. For this reason, modern automobiles must consume less fuel and emit less GHG. In the same way, regulations should also contribute by demanding more from industries (National Research Council 2013). There is a prospect showing that GHG emissions of Brazilian road transport in the coming years will fall (from 178 million tonnes of CO2 e in 2019 to around 177 million in 2030, basis scenario, and around 176 million in 2030 in the optimistic scenario), while energy consumption will increase (from 3.3 million TJ in 2019 to around 3.9 million TJ in 2030, basis scenario, and around 4 million in 2030 in the optimistic scenario). The prospect is due to the increase in the consumption of biofuels (see Figs. 12.3 and 12.4). However, there are more factors that can contribute to emission drops in road transport, such as increased engine efficiency, the introduction of new technologies, the use of hybrid electric vehicles, or even the development of more potent NG engines, and, finally, the use of H2 (Andress et al. 2011). Road transport decarbonisation is considered a necessity and one of the main paths to more sustainable development in Brazil and worldwide. Figure 12.5 shows the paths for sustainable transport.

Conclusions Brazil has pledged to limit its emissions in the energy sector by increasing the use of biofuels and as can be seen in the results of this work, the trend for the coming years is that there will be growth, thus reducing GHG emissions too. According to the results shown in this chapter, the consumption of biofuels (biodiesel, anhydrous alcohol, and hydrated alcohol) tends to increase in the 2020s, being a significant positive point. This way, the country tends to reach its NDC target, increasing biofuels in its energy supply. Despite an encouraging scenario of increased use of biofuels, it should be noted that the consumption of petrol also tends to grow in the 2020s, and GHG emissions do not tend to fall significantly. Therefore, a vigorous energy transition to a lowcarbon matrix in Brazilian road transport is not expected in the coming years. To

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Fig. 12.5 Paths to a sustainable transport

significantly reduce GHG emissions, it will be necessary to add other types of fuel to the energy matrix of this model (including H2 ) and insert electric cars and biogas. NG can also be used as a bridge to a less polluting matrix, as its emissions can be lower than those of other fossil fuels. An important point to be mentioned is the diversity of low-carbon alternatives, adopting more than one form, such as hybrid cars (electric and ethanol). It is interesting to have options, so there is no dependence on just one. Technology can also help reduce GHG emissions in vehicles with efficiency improvement, and regulatory policies must be developed and put into practice, since PROCONVE and PROMOT— despite being great programmes for mitigating pollutants emissions—do not include them in their scope targets for GHG emissions. In addition to offering alternative fuels, for sustainable transport to be the norm in Brazil, it is necessary to improve public transport, especially in large urban centres, and encourage the use of active transport (walking and cycling), providing adequate infrastructure for these activities. It is also worth noting that improving public transport is one of the goals contained in the Brazilian NDC. Acknowledgements All the authors gratefully acknowledge support from SHELL Brazil and FAPESP through the Research Centre for Gas Innovation (RCGI) (FAPESP Proc. 2014/502794), hosted by the University of São Paulo, and the strategic importance of the support given by ANP through the Research & Development levy regulation. Peyerl expresses special thanks for the current financial support of grant Process 2017/18208-8, 2018/26388-9, São Paulo Research Foundation (FAPESP). Costa de Andrade is especially grateful for the current financial support of Processes 2019/17996-8 and 2020/12521-9, through FAPESP. This work was partially financed by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior.

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Chapter 13

How Can Renewable Natural Gas Boost Sustainable Energy in Brazil? Saulo Vieira da Silva Filho, Mariana Oliveira Barbosa, and Drielli Peyerl

Abstract The high populational density and poor or absent waste management strategies in developing economies make the deployment of waste-to-energy techniques a feasible strategy. A large portion of the Brazilian household domestic waste, for example, is inadequately destined, generating impacts on soils, water resources and increased emissions of greenhouse gases. Currently, Brazil produces around 1.83 billion cubic meters of biogas per year, but its full potential is yet to be explored totally. The country can minimize its energy vulnerability and increase the sustainability of its energy production by applying circular economy principles and waste-to-energy. This chapter seeks to unravel the potential for biogas production from household organic waste in Brazil, presenting an assessment of the potential of energy generation from Municipal Solid Waste and the promising localizations for implementing biogas plants. As a result, the country’s potential for renewable methane amounts to about 9 MM m3 /day. The coastal and southeastern areas have a larger potential to convert household waste into energy due to the higher population concentration. The latter can also increase the energy production reliability in the northeastern and southeastern regions, supporting operators to circumvent seasonally renewable sources. The scenario for biogas in Brazil is positive. However, the country still needs consolidation of its public policies to incentivize the biogas insertion into its energy matrix and entrepreneurship toward the smarter handling of wastes. Keywords Renewable natural gas · Circular economy · Waste-to-energy · Brazil

S. Vieira da Silva Filho (B) · M. O. Barbosa · D. Peyerl Institute of Energy and Environment, University of São Paulo, Av. Professor Luciano Gualberto, n° 1289, São Paulo, Brazil e-mail: [email protected]; [email protected] M. O. Barbosa e-mail: [email protected] D. Peyerl e-mail: [email protected]; [email protected] D. Peyerl University of Amsterdam, Science Park 904, 1098 Amsterdam, The Netherlands © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Peyerl et al. (eds.), Energy Transition in Brazil, The Latin American Studies Book Series, https://doi.org/10.1007/978-3-031-21033-4_13

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Introduction Humankind has accelerated the consumption of natural resources and production of wastes, altering the landscape, cutting down forests and raising greenhouse gas emissions (GHG) at unprecedented rates (Crutzen 2006). The fast-changing natural processes concern scholars and practitioners on how the future will affect life and economic prosperity. The paradoxical challenge of the twenty-first century arises: thriving in the economy with the minimum possible impact on the environment. Through the necessity of changes in how humankind uses natural resources, including energy, many worldwide actions have been taken in the last decades. In Brazil, the high amount of waste generated from agriculture or sanitation emits a large amount of GHG. The use of organic wastes to produce energy can help decarbonize the energy mix and diversify resources at a time of changes in the Brazilian hydrological landscape. Wastes are also ultimately mishandled in a large portion of the country and generate other environmental problems such as soil and water contamination. Besides being an effective solution to enhance the waste-toenergy (WtE) of the country, deploying wastes to produce energy is favored by the high populational density in some specific regions of the country, which also have a larger concentration of produced organic waste and viability of the ventures. This book chapter seeks to unravel the Brazilian potential for biogas production from household organic waste, presenting an assessment of the potential of energy generation from Municipal Solid Waste (MSW) and the promising localizations for implementing biogas plants. The guiding question to answer this objective is the same as the title of this chapter: How can renewable natural gas boost sustainable energy in Brazil? Answering this question, concepts such as circular economy (CE) and its principles connected to the WSW are part of the theoretical referential. In this book’s chapter, CE is analyzed as a promising framing for renewable and sustainable energy production in Brazil, focusing on the waste-to-energy (WtE) state-of-the-art to achieve the recycling of organic nutrients and decrease GHG emissions through the decarbonization of gas.

Literature Review The CE aims to add value to waste to increase resource use efficiency and achieve a better balance and harmony between the economy, environment and society (Ghisellini et al. 2016). Besides rethinking our production and consumption standards, CE can generate new forms of income distribution. CE has come out as a principle related to ecological and environmental economics and industrial ecology that today aims to achieve cleaner production standards, increase the use of renewable materials and technologies, foment the adoption of transparent policies and increase production and consumption awareness (Ghisellini

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et al. 2016). Although CE was not meant to complement Sustainable Development (SD), it has also been used as an operationalization for businesses to implement SD at the micro, meso and macro levels (Geissdoerfer et al. 2017; Kirchherr et al. 2017). In short, CE aims to disrupt the ‘end-of-life’ concept so that the circularity of a variety of materials can be improved and the use of inputs can be reduced. CE can also improve the energy efficiency of the whole production chain by using wastes to produce energy. That enables the decentralization of energy production while enhancing the value of materials and reducing GHG emissions. CE has been understood as an aspect that should be used for environmental protection and orient policies to achieve more sustainable production and consumption models (Ghisellini et al. 2016). For being increasingly debated in the industry, it has been mainly depicted as a strategy to achieve long-term economic prosperity and environmental quality (Kirchherr et al. 2017). Part of that is because the industry is efficient at creating solutions, and its innovation capacity is fundamental to CE (Pan et al. 2015). A bottom-up perspective, in which CE goals and framing are well established, can easily recognize individual needs and characteristics of economic sectors and incorporate entrepreneurial values well aligned with the CE global conceptual models and principles. Nevertheless, policy and decision-makers must uphold CE core values to guide innovations seeking new alternatives to add value to products that aim to close the production loop. Therefore, the natural process to achieve a sustainable transition to a CE would be to have well-established policies, programs and definitions to support technological innovation for energy production. Recycling should not be understood as a unique strategy in circular systems but as one of the pillars of CE development. Academia and industry have indeed given more attention to developing cleaner technologies and recycling strategies rather than reuse (Ghisellini et al. 2016). Still, some limitations of recycling are: (i) itself cannot ensure a theoretically closed-loop, (ii) bulkier materials are not valuable enough to break even the prices of their recycling, (iii) the quality degradation of most materials and (iv) the intensive energy consumption (Allwood 2014). Despite envisioning an infinite loop where goods turn back to raw materials is attractive, knowing the technical limitations of recycling and incorporating both reuse and reduction to CE is fundamental to a newer and more widely accepted conceptual definition of CE (Kirchherr et al. 2017). The solutions associated with the CE in the productive chain of several materials and services foster impacts in the energy sector. However, just as the CE approach involves social, economic and environmental issues, sustainable solutions for the energy sector also seek a result that strikes a balance between them (Blum et al. 2020). CE can decrease energy consumption and decarbonize some sectors when applied to energy production. Alternatives that focus on using waste to produce energy have a high potential to decentralize its production, distribute income and increase energy security. Along with the outgrowing consumption of energy, authorities aim at expanding the use of renewable resources to reduce or control GHG emissions. A great challenge in this sector is the construction of photovoltaic modules, wind turbines and batteries, or even the expansion of energy crops (Gielen et al. 2019). Despite being

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cleaner, these renewable alternatives can rely on extracting minerals and fossil fuels to build facilities, production maintenance and energy storage. These must be minimized without depleting resources, in addition to evaluating business models and the alternatives that CE can afford (Mulvaney et al. 2021). Solutions that foment CE can achieve more sustainable energy production and better handle the application of energy transition principles. Good examples that dealt with this integration concentrated on increasing the life cycle of products or elements while focusing on technologies and practices that reduce GHG: i.

The capture of CO2 emitted by industries and transformed into elements such as methanol, which also has an energy value (Sankaran 2020); ii. Recycling of photovoltaic panels, since this is one of the main bottlenecks for thinking about the future expansion of solar energy in the energy mix (Kim and Park 2018); iii. Electrification from the secondary use of batteries (Su and Urban 2021) and; iv. Production of biofuels from organic waste (Pan et al. 2015). Beyond improving energy security and diversifying the energy mix, according to (Baležentis et al. 2019), developing a bioeconomy is one of the main strategies to reduce GHG emissions and mitigate climate change. As stated in Guo et al. (2015), the bioenergy captured by land plants is 3–4 times larger than the world’s energy demand. The recoverable portion of these energy crops, understood by (Haberl et al. 2013) as those outside croplands, infrastructure, wilderness and denser forests, may have come to deliver, according to the same authors, approximately 190 EJ year−1 , about 35% of the world’s demand for energy in 2013 (Guo et al. 2015; Haberl et al. 2013). Nevertheless, the bioeconomy itself is not enough to achieve a restoration cycle, as the use of chemical fertilizers based on nitrogen, potassium and phosphorous requires the exploration of additional nutrients and the input of a large amount of energy that should be taken into account within the context of a CE (Sherwood 2020). There is an insufficient nutrient recirculation achieved by using manure, straw and sewage sludge. At the same time, a cradle-to-grave approach applied to energy crops can accelerate resource depletion by being strongly dependent on the fertilizers derived from mineral reserves and natural gas (Sattari et al. 2016; Sherwood 2020). It can also generate a huge loss of value in the production chain, eutrophication of inland and coastal areas (Huang et al. 2017) and, ultimately, environmental pollution (Eltarabily et al. 2017). In addition to that, as there is limited available land and space for energy crops (Pan et al. 2015), land and water supply conflicts and threats to biodiversity can emerge from biomass fuel production (e.g., biodiesel and bioethanol) if biomass is to be used as the main strategy to grow the renewables’ share while replacing fossil fuels (Nevzorova and Kutcherov 2019; Sherwood 2020). As shown in Schyns and Vanham (2019), the amount of water used to produce energy from wood in Europe can largely affect biodiversity and water supply. In addition, the declining water supply can ultimately limit wood production and green water flows biomass production allocation.

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According to Sherwood (2020), biomass production for materials and chemicals should be a viable option only when the food market is satisfied. As our society grows not only the energy demand but also the consumption of goods and generation of wastes, in the context of pursuing a CE and renewable energy, using organic wastes to produce energy is a feasible option, as it not only supports reducing fossil fuels share but also finds value in waste and create new forms of income (Mak et al. 2020; Malinauskaite et al. 2017; Nizami et al. 2017). With a WtE approach, wastes from agriculture, households, animals and industry can be converted into various types of bioenergy products (Pan et al. 2015). That way, what has been treated as a growingly expensive problem can be converted into a profitable, sustainable and circular activity. In developing countries, more than 90% of waste is dumped in open sites or landfills, which ultimately causes various diseases and environmental problems (Nizami et al. 2017). WtE is an option that can solve energy supply and waste management issues by increasing energy security while reducing reliance on energy imports, GHG emissions, and the contamination of water and soil due to the mismanagement of residues and high landfill costs (Ncube et al. 2021; Nizami et al. 2017). That option would not only achieve a sounding water–energy nexus (Pan et al. 2015), but it would also work food security as an important variable in energy production. The reuse of wastes to produce energy can increase the offer of land to food crops and reduce the reliance on mineral and gas reservoirs to produce fertilizers. It can also reduce the water footprint in renewable energy production and create new businesses and forms of income. The organic fraction of wastes, which varies between 50 and 62% (Nizami et al. 2017), can be used to produce energy with biological, thermo-chemical, chemical and physical processes (Nizami et al. 2017; Pan et al. 2015). The type of residue and strategy dictates the appropriate technology for biorefineries. Examples of WtE technologies are anaerobic digestion, fermentation, combustion and incineration, transesterification, bioelectrochemical, gasification, pyrolysis and hydrothermal liquefaction. A thorough review of the sustainable technologies of WtE is provided in Trabold and Babbitt (2018). Anaerobic digestion for biogas production is a technology that can turn back organic wastes into energy and biofertilizers and reduce GHG emissions by avoiding methane release (Ericsson et al. 2020; Flesch, Desjardins, and Worth 2011). In addition, an appropriate operationalization of biodigesters plays a fundamental role in achieving these advantages and avoiding exceeding fugitive emissions (Flesch et al. 2011; Rodhe et al. 2015). Hijazi et al. (2016) highlight some measures that can minimize, mainly, the effects of global warming and resource consumption, such as: • Selection of energy crops with high organic matter per unit area; • Installation of a flare to discharge biogas when there is no consumption or storage available; • Protection of the storage tank; and • Monitoring the biogas leakages; and others.

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The productivity chain from organic waste management to biogas generation counts on several processes and circumstances that interfere with the final products. The conditions of the environment are important for bacterial anaerobic digestion and must be controlled according to its oxygen concentration, temperature, pH, nutrient availability and presence of inhibitors (such as H2 S) (Kothari et al. 2014). Other parameters concern the operational aspects of the biodigester and the type of organic waste that the system carries. They are (i) the relationship between the wet/dry solid load (which controls the need for different types of pre-treatment and the process efficiency); (ii) the volumetric organic load and the retention time in the biodigester; (iii) the biogas productivity and yield and (iv) the optimal agitation for the high contact between organic matter and bacteria without damaging them (FNR 2013). Table 13.1 summarizes some studies that describe the composition of organic wastes: Biogas is a potential source for thermoelectric generation. The process of its transformation into electrical energy begins with the conversion of chemical energy contained in its molecules into mechanical energy by controlled combustion (ratio of the mixture between air and fuel). This mechanical energy activates an alternator that converts it into electrical energy. For instance, Mensah et al. (2021) evaluated the electric generation of biogas from sewage treatment in Benin and showed that the biogas potential is equivalent to 2% of the total imported energy. Ribeiro et al. (2016) investigated biogas production from the anaerobic digestion of poultry in the interior of Minas Gerais state, reaching the projected power capacity of 1277 TWh/year. Rios and Kaltschmitt (2016) found that electricity generation from waste is a viable option in Mexico by calculating its theoretical, technical and economic potential. Table 13.1 Inputs used for biogas generation Inputs

References

Food waste

Zhang et al. (2014)

Organic waste

Rajendran et al. (2014)—Sweden

Sewage sludge

Demirbas et al. (2016)—Saudi Arabia, Kiselev et al. (2019)—Russia, Bachmann (2015), Bien et al. (2007), Paolini et al. (2018)—Italy

Sugar cane

Contreras et al. (2009)—Cuba, Parsaee et al. (2019)—Vinasse

Mix

Kapoor et al. (2020)

Livestock manure

Swine manure

González-Fernández et al. (2008)

Mix

Agricultural waste and cow dungs

Almomani and Bhosale (2020)

Swine/poultry manure and sewage sludge

Borowski et al. (2014)

Municipal solid waste (MSW)

Agricultural by-products and waste

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Besides, biogas has several end uses, such as thermal energy generation, cogeneration and biomethane production. In turn, biomethane can be used as fuel for vehicles or to produce green hydrogen (see Chaps. 11 and 12). Moreover, industries can demand biogas as fuel or raw material (SGA 2008). Ncube et al. (2021) compare two of the end uses of biogas from organic waste separated through anaerobic digestion to assess environmental impacts in Canada. The first scenario has the option of cogeneration in a system that combines heat and electricity generation. The second option involves the production of biomethane through the treatment, mainly scrubbing, of the previously produced biogas. Thus, the study assessed that this practice reduces environmental impacts and that the destination of cogeneration contributes more (Ncube et al. 2021). The transformation from biogas to biomethane with the installation and operation of a waste power plant can break even the costs faster (Rajendran et al. 2014).

How Can Renewable Natural Gas Boost Sustainable Energy in Brazil? The Brazilian electricity matrix is highly reliant on the hydrologic cycle. The increasingly recurrent droughts in the Paraná Basin (Coelho et al. 2016; Nobre et al. 2016) have made the population highly vulnerable to water and energy scarcity. Dams inflow have not been enough to compensate for losses and demand. Electricity access is also currently jeopardized by the increased prices and probability of power rationing and blackouts, which already occurred in 2001. The electricity and transportation sectors that make broad use of bioethanol are also indirectly subject to droughts, as they require a large volume of blue water to irrigate fields. According to the last edition of Panorama of Solid Waste in Brazil (2020), there has been an increase in municipal solid waste (MSW) in Brazil by more than 10 M tons per year in the last decade. However, there has been no great improvement concerning the deposition of this waste. In Brazil, around 40.5% of waste still has inadequate disposal in controlled landfills and dumps. In the Midwest, north and northeast regions, this percentage exceeds 80% (ABRELPE 2020). This type of disposal generates problems, both in terms of health and the contamination of soils, aquifers and GHG emissions. The cost to remedy all these impacts is equivalent to USD 1 billion per year (ABRELPE 2020). There is a clear need to apply circular solutions to handling waste in the country, and deploying waste to produce biogas has been a feasible alternative in other portions of the world (DEFR 2011; Gu et al. 2016; Schütte 2017; SGA 2008). According to ABiogás (Brazilian Biogas Association), the biogas production in Brazil corresponds to only 2% of the national potential, equivalent to 82.58 billion cubic meters per year (CIBIOGÁS 2021). However, biogas production and installation of new biogas plants have been exponential during the last decades and has the support of the Brazilian government (see Chap. 14). Out of the 675 plants, 638 are for energy purposes and vary between small (< 500,000–1,000,000 N m3 /year), medium

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(1,000,001–5,000,000 N m3 /year) and large (more than 5,000,001 N m3 /year). The larger ones are responsible for 79% of the total production amount (CIBIOGÁS 2021). Concerning the substrate, there are 57 (9%) biogas plants loaded with MSW (and sewage) that correspond to 73% of current production (CIBIOGÁS 2021). On the other hand, the energy application of biogas has a large volumetric predominance of electricity in Brazil (73%), followed by the production of biomethane (19%) and thermal energy (8%). Between 2004 and 2015, nine thermoelectric plants powered by biogas from landfills were installed with a total installed capacity of 86.3 MW. Most of them are concentrated in the southeast region (Nascimento et al. 2019). Using MSW as an alternative fuel is a strategy that can reduce the impacts of waste while generating energy and recycling nutrients. It can also be used as a strategy to decentralize energy production and increase energy security in Brazil. The potential for methane from household biowaste and the projected amount of electricity generated from renewable methane in Brazil can be computed by applying coefficients and equations that enable the conversion of units (Höhn et al. 2014). Firstly, the household waste production rate in Brazil was gathered (ABRELPE 2020). Secondly, the volume of methane that can be generated from household waste using anaerobic digestion was computed through: CH4 = POSW ∗ TS ∗ VS-TS ∗ [CH4 ] where biowaste from households has a concentration of around 400 m3 of CH4 per ton of volatile solids ([CH4 ]), TS, the percentage of total solids, is 27%, and the ratio between volatile solids and total solids, VS-TS, is 90% (VS-TS), and the percentage of organic solid waste (POSW) of 55% (Höhn et al. 2014). Thirdly, the theoretical electric generation (E) was computed as follows: E = C ∗ CH4 ∗ RT where the running time (RT) is 8000 h per year and C, the methane calorific value, is 10 KWh per m3 (Höhn et al. 2014). Only those municipalities whose population density is higher than 20 inhabitants per km2 were considered when estimating E. The estimated daily capacity of renewable methane from households waste is 9 MM m3 /day. As shown in Fig. 13.1, the coastal and southeastern areas have a larger potential to convert household waste into energy due to the higher population concentration. These areas have advantages due to the gas pipeline network and the auction system implemented, in which part of the pipeline’s capacity is offered to producers. For instance, GASBOL (Brazil-Bolivia pipeline) has recently auctioned more than 10 MM m3 of its daily transportation capacity (Barbosa and Peyerl 2020). Both the transportation and electric sectors can benefit from the distribution of renewable methane. For the electricity sector, renewable methane from households can generate 33 GWh per year (EPE 2019). Furthermore, the distribution of methane for different end uses can reach decarbonization levels and other sectors (Blanco et al. 2018).

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Fig. 13.1 Annual potential of renewable methane from biowaste household

In the center and north, there are regions that, despite not being close to gas pipelines, can benefit in other ways from the production of renewable methane. These regions might often be sparsely populated, may not have waste collection companies and suffer from high instability in electricity supply due to long wiring and poor maintenance. Renewable methane can also mitigate the high energy vulnerability of small livelihoods in the countryside. That can be supported with public–private– social partnerships to provide renewable energy and offer energy to remote locations, where wastes can be digested and electricity generated locally. That would promote democratization and decarbonization of energy production by decentralizing facilities for energy production. Usually, a large portion of these livelihoods’ labor is connected to the field, meaning that they are potential regions where the per capita rate of biowaste production can be higher than the national average, and they may have fertilizer use as a constraint to food production. Applying circular principles, in that case, would also foster organic fertilizers production and give more autonomy and resilience to communities. Renewable methane can also increase the reliability of the National Interconnected System in regions that have a high percentage of renewables in their matrix. For instance, around 40% of the north-eastern installed capacity is due to wind energy and more than 60% of the southeastern capacity for hydroelectric power (SIGAANEEL 2021). Due to the natural seasonality and the increasingly recurrent droughts, there is a need to implement other strategies aimed at energy production. Biogas and biomethane production has environmental, social and economic attributes that make this source a great opportunity for the coming years. Finally, according to

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Low-Carbon Fuel Standard (LFCS) that evaluates the life-cycle analysis, biogas consumption has negative GHG emissions. It can generate some carbon credits, a market tool that represents assets issued by certifying companies on the mitigation of emissions and can be sold to companies that need or choose to participate in the voluntary market. It has received great attention since its insertion (3rd Conference of the Parties, 1995), and it was highlighted at the last UNFCCC Conference of Parties (26th Conference of the Parties, 2021).

Policy Implications Implementing practices to transform waste into energy also involves government attitudes and public policies. According to Pan et al. (2015), huge attention must be paid to different phases to add value to waste. In Germany, the high incentives to explore alternatives to fossil fuels, the operationalization of biomethane as natural gas (e.g., transport in NG pipelines) and the definition of producer remuneration are some of the items that made the country the greatest potential for biogas production (mainly from agricultural and livestock waste) (Schütte 2017). Another promising case is Sweden, where the participation of biogas in its energy mix is relatively high (SGA 2008). The historical factors indeed helped in the biogas development (e.g., the oil crisis in the 1970s), but the country has also gained an advantage through the (i) stimulus of the use of renewable sources throughout the European Union; (ii) the application of biological treatment and banishment of organic waste deposition in landfills in 2005; and (iii) the financial aid for building biogas plants through the administration of the Swedish government (Scarlat et al. 2018; SGA 2008). The UK, where the government has also aimed to reduce waste and increase renewable energy sources’ share, has incentivized biodigesters to handle organic waste (e.g., renewables obligation, feed-in tariffs and renewable heat incentive) (DEFR 2011). China, since the 1960s, has fomented domestic biogas, and later, rural production. Gu et al. mention a great expansion potential for biogas in the industrial sector in the coming years, as long as some barriers are overcome, such as technology development, public policies and opening for third parties to enter the sector (Gu et al. 2016; Schütte 2017). The Energy Research Office (EPE) annual report shows the prospects for expanding the energy sector for the next ten years. The last-launched Decennial Energy Plan (PDE 2030) presents the perspectives for the next decade. For the first time, municipal solid waste management appears as a possible source of electricity generation in the scenario built for Brazil, which would increase the capacity by 60 MW. However, this generation comes from incineration, not anaerobic digestion (EPE 2021). Between 2004 and 2015, nine thermoelectric power plants were installed using biogas from landfills with a total installed capacity of 86.3 MW. Most of them are concentrated in the southeast region (Nascimento et al. 2019). Public policies can vary in stimulating different parts of the biogas chain (Gustafsson and Anderberg 2021; Pavan et al. 2021). Some of these possibilities

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are: offering incentives through subsidies and technological development; boosting consumption through certificates; establishing GHG emission restrictions; access to information and; preventing or restricting the deposition of organic waste in landfills (Pavan et al. 2021). In Brazil, in the 1970s, the first biogas plants were built from agro-industrial residues commercially due to uncertainties caused by the oil crisis (Freitas et al. 2019). However, the initiatives were not enough to remain a potential market in the country. In 2006, there was another promising moment, mainly due to the Clean Development Mechanism created along with the Kyoto Protocol. However, many of the projects aimed to burn biogas through flares and not its energy use. In 2011, the fall in carbon market prices resulted in a disincentive to continue and expand these projects (Pavan et al. 2021). Nonetheless, in the last decade, some policies came into force, which should stimulate the sector: (a) National Solid Waste Policy, in 2010; (b) the launch of the Probiogas Program with the German government and (c) in 2014, the first auction focused on biogas projects (Quadros et al. 2016); (d) RENOVABio; and (e) New Regulatory Framework for Basic Sanitation, which redefined a new date for the end of landfills with a defined date for large cities and another for small cities. Other areas that need an advance, punctuated by Quadros et al. (2016) are: the incentive to electricity-producing agents and the demand for biomethane. In the 2021 Gas Law, these had an advance through the statement of manipulating biomethane in the same way as natural gas: (i) resume assessments on tax issues; (ii) technological development; (iii) dissemination of information and technical maintenance training; (iv) observation of this opportunity as an alternative to the decentralization of the energy market (Brasil 2021). The advantages of decentralized generation are reducing costs of high voltage transmission grid, while distributed generation connected to distribution networks or the consumers become present; decreasing concentration of technical, political and economic decisions in large centers (Di Silvestre et al. 2018); reductions in transmission losses; opportunity to use biogas for power generation, and, consequently, minimize the emission of GHG; improvement of the management of energy production to meet local needs (World Alliance for Decentralized Energy 2006). It allows regions with technical barriers (isolated and remote systems) to access electricity and other forms of energy.

Conclusions In Brazil, there is a huge potential for generating renewable methane that can improve the Brazilian energy system’s reliability, accessibility and decarbonization. In this chapter, the protagonist was the production of biogas from Municipal Solid Waste. This technological route for electricity, thermal or mechanical energy has a wide variety of advantages: environmental (reduction of emissions and waste disposal in inappropriate places), social (job generation) and economic (valuing waste). As a

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result, the theoretical total of renewable methane calculated for Brazil was around 9 MM m3 /day. In order to develop the maturation of this capital-intensive market and answer the question of this chapter, it is necessary to consolidate public policies, as shown in Sect. 13.4, as has occurred in other countries, to encourage the insertion of biogas into the Brazilian energy matrix. Therefore, some of the highlights for this are actions that promote the collection, disposal and energy reuse of waste, valuing environmental aspects (as well as RenovaBio) by using life-cycle analyses, and regulating the carbon credit market. Acknowledgements All the authors gratefully acknowledge support from SHELL Brazil and São Paulo Research Foundation (FAPESP) through the Research Centre for Greenhouse Gas Innovation (RCGI) (FAPESP Proc. 2014/50279-4 and 2020/15230-5), hosted by the University of São Paulo, and the strategic importance of the support given by ANP through the Research & Development levy regulation. Peyerl and Barbosa thank the financial support of grant Process 2017/182088, 2018/26388-9, 19/0455-3, (FAPESP). This work was partially financed by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior.

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Chapter 14

The Main Challenges of the Brazilian Energy Governance for the Mitigation and Adaptation to Climate Change Leonardo Yoshiaki Kamigauti, Ana Luiza Fontenelle, Felipe Coutinho, Ana Maria Heuminski de Ávila, and Drielli Peyerl Abstract Given the importance of the energy sector and the necessity for an urgent energy transition worldwide, this research identifies the main challenges of Brazilian energy governance to mitigate and adapt to climate change effectively. Through the climate action perspective, the study analyzes the Brazilian Decennial Energy Planning documents from 2009 to 2019. The tools used are the SWOT and GUT, both commonly applied to assess scenarios and support decision-making. The most critical challenge identified is the political instability inside and outside Brazil regarding climate action, besides the other six challenges. The conclusions highlight that the challenges prevented the Brazilian governance from being aligned with the international climate action. In brief, the identified issues culminate in an underappreciation of Brazil’s enormous potential renewable sources. L. Y. Kamigauti (B) Department of Atmospheric Sciences, Institute of Astronomy, Geophysics and Atmospheric Sciences, University of São Paulo, R. Matão 1226, São Paulo 05508-090, Brazil e-mail: [email protected] A. L. Fontenelle Division of Water Resources Engineering, Faculty of Engineering, Lund University, P.O. Box 118, 221 00 Lund, Sweden e-mail: [email protected] School of Mechanical Engineering, University of Campinas, Av. Mendeleyev 200, Campinas 13083-860, Brazil F. Coutinho Mackenzie Presbyterian University, Rua da Consolação, 930 Consolação, São Paulo, Brazil e-mail: [email protected] A. M. H. de Ávila Center for Meteorological and Climatic Research Applied to Agriculture, University of Campinas, Av. Dr. André Tosello, 209, Campinas 13083-970, Brazil e-mail: [email protected] D. Peyerl Institute of Energy and Environment, University of São Paulo, Av. Professor Luciano Gualberto, n° 1289, São Paulo, Brazil e-mail: [email protected]; [email protected] University of Amsterdam, Science Park 904, 1098 Amsterdam, The Netherlands © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Peyerl et al. (eds.), Energy Transition in Brazil, The Latin American Studies Book Series, https://doi.org/10.1007/978-3-031-21033-4_14

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Keywords Climate change · Governance · Energy planning · Brazil · Energy systems

Introduction The growing concern about climate change triggers challenges and opportunities for a sustainable energy transition that requires a transformation in the energy sector and society (Dobravec et al. 2021). To face the challenges of this energy transition, it is necessary to ensure the environmental, economic, and social costs, risks, and benefits that can be considered sustainable (Chen et al. 2019; Sareen and Haarstad 2018). Therefore, sustainable development can be an opportunity to mitigate the impacts of climate change (Neofytou et al. 2020). In addition, the international climatic agreements have been representative of governments to meet CO2 reduction targets, climate change adaptation, and a more sustainable world by adopting alternative energy sources. However, these agreements alone do not guarantee that the proposed climate goals will be achieved, even when they are distant from reality, especially in developing countries (Relva et al. 2021). Furthermore, global efforts toward a sustainable energy transition have contributed to rethinking the necessity of robust and audacious strategies in governance, mainly to mitigate and adapt to climate change (Chen et al. 2019; Shah 2006). Besides, the role of the local governments and other stakeholders is essential to achieving sustainable development, managing the transition pathways, and improving resilience to the communities (Staden 2017). Similarly, governance systems and energy planning have influenced the speed and direction of the energy transition (Loorbach et al. 2008). However, the main governance systems barriers focus on policy integration and enforcement (Lange et al. 2018). Therefore, the governance system and the energy planning and management need to be integrated to achieve global decarbonization targets. In 2020, the energy sector (electricity, heat, and transport) was responsible for 73.2% of global greenhouse gas emissions (GHG) (Ritchie and Roser 2020). Immediately, actions, such as implementing the Nationally Determinate Contributions (NDC) through the signatories’ countries of the Paris Agreement, have demonstrated commitment to mitigation and adaptation to climate change. For instance, the Brazilian Government stated intentions to mitigate GHG in the energy sector following this international context. Besides, conciliating different actors such as the oil and gas industry and renewable energy market adds complexity to this challenge. Fulfilling this gap is fundamental to promoting the Brazilian sustainable energy transition in the following few years. Therefore, this research aims to evaluate and discuss how international and national climate actions are guiding Brazilian energy planning and governance from 2009 to 2019. Although it is not a normative document, the Brazilian Decennial Energy Planning (PDEs) have shown necessary actions and efforts, especially indicating the financial resource allocation. Therefore, this analysis provides the strengths, weaknesses, opportunities, and threats of energy planning

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and indicates which actions must be enhanced to contribute to climate action. In addition, the research also scrutinizes the gravity, urgency, and tendency of the Brazilian actions in the energy sector to suggest where the efforts could concentrate in the following years.

Climate Action and Sustainable Development International Context As the climate change worsens, climate policies must support the energy transition. Since the Earth Summit (Rio de Janeiro, 1992), the United Nations (U.N.) has promoted environmental and climate discussions through the creation of the United Nations Framework Convention on Climate Change (UNFCCC). Some of the most important results of the UNFCCC are the Kyoto Protocol (1997), the Copenhagen Accord (COP-15, 2009), and, more recently, the Paris Agreement (2015). The current agreement was established in 2015 during the Conference of Parties in Paris. The main goal of the Paris Agreement is to strengthen global climate action, demanding mitigation and adaptation strategies (UNFCCC 2015a). In total, 194 countries and the European Union (E.U.) signed the Paris Agreement and 190 (including E.U.) ratified it until 2021 (UNFCCC 2015a). Brazil was one of the first countries to sign (April 22, 2016) and ratify the agreement (September 21, 2016). The core of the agreement is the Nationally Determined Contributions (NDC), which are efforts to reduce GHG emissions and promote adaptation and resilience (UNFCCC 2015b). Also, in 2015, another important document was launched. The U.N. organized the 2030 Agenda for Sustainable Development (2030 Agenda) to amplify and consolidate the work of the Millennium Development Goals (MDG) (U.N. 2015). The agenda is divided into 17 Sustainable Development Goals (SDGs) and 169 Targets, aiming to integrate people, planet, and prosperity through partnership to promote peace. Among all the SDGs, SDG 7 (clean and affordable energy) and SDG 13 (climate action) are directly connected to the energy transition. The Paris Agreement and the 2030 Agenda are complementary to decreasing climate change impacts and providing a sustainable future. In summary, the international agreements mentioned above seek a global effort to mitigate climate change. However, the reality of each country makes this a challenge. National aspects need to be carefully analyzed, observing each country’s actions to contribute to climate change issues at the global level.

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Brazilian Context In 2009, some of the first Brazilian strategies to promote climate action were motivated by COP-15. Law nº 12114 (December 9, 2009) created the National Climate Change Fund, and Law nº 12187 (December 29, 2009) defined the Brazilian National Climate Change Policy (PNMC in Portuguese) (Law N° 12114—National Climate Change Fund 2009; Law No 12187—National Climate Change Plan 2009). It started as a goal to reduce GHG emissions by 38.9% by 2020. It is essential to note that in 2019, the Brazilian GHG emissions were 14% higher than in 2009 (Observatório do Clima 2021). Regarding energy transition, these policies determine the growth of renewable sources participation in the electricity mix supply and increase energy efficiency (Law No 12187—National Climate Change Plan 2009). The commitments should guide Brazilian policies related to climate change mitigation and adaptation. Aligned with the Paris Agreement, the Brazilian NDCs aim to decrease GHG emissions to 37% until 2025 and 43% until 2030, using as reference the year 2005 (Paris Agreement Brazil’s Nationally Determined Contribution—NDC 2020). It is crucial to note that the GHG emissions in the year before the Paris Agreement (2014) were already 43% lower than the emissions in 2005, according to the available documents (MCTI 2016). This value was recently revised with new methodologies as 25% (Observatório do Clima 2021). Figure 14.1 shows the emissions history in Brazil since 2005. Besides, the country intends to adopt further measures that are consistent with the 2 °C temperature goal. Box 14.1 shows the Brazilian NDC statements regarding the energy sector. 3000

Million of tCO2e

2500 2000 1500 1000 500 0

Waste

Industrial Processes

Energy

Agricultural

Change in Land Use and Forests

Fig. 14.1 GHG emissions history in Brazil. Source Produced by the author with data from Observatório do Clima (2021)

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(…) increasing the share of sustainable biofuels in the Brazilian energy mix to approximately 18% by 2030, by expanding biofuel consumption, increasing ethanol supply, including by increasing the share of advanced biofuels (second generation), and increasing the share of biodiesel in the diesel mix; in the energy sector, achieving 45% of renewables in the energy mix by 2030, including: ● expanding the use of renewable energy sources other than hydropower in the total energy mix to between 28 and 33% by 2030; ● expanding the use of non-fossil fuel energy sources domestically, increasing the share of renewables (other than hydropower) in the power supply to at least 23% by 2030, including by raising the share of wind, biomass and solar; and ● achieving 10% efficiency gains in the electricity sector by 2030 Box 14.1 Brazilian NDC statements regarding the energy sector. Source Paris Agreement Brazil’s Nationally Determined Contribution—NDC (2020) Complementing the mitigation actions, the Brazilian National Adaptation to Climate Change Plan (PNA) was launched on May 10, 2016, through Ordinance nº 150. PNA aims to reduce national vulnerability to climate change and manage its impacts (Plano Nacional de Adaptação à Mudança Do Clima 2015). Brazil also internalized the 2030 Agenda as a framework for sustainable development. The 169 Targets were reviewed and adapted to Brazilian context in the ODS—Metas Nacionais dos Objetivos de Desenvolvimento Sustentável in 2018 (IPEA 2018). When the international climate action strengthened after the COP-15, Brazilian energy planning started incorporating these climate discourses in the PDEs. However, it is necessary to understand how climate actions effectively guide planning. The implementation has various potential threats and weaknesses, such as economic interest, political changes, and energy security. Therefore, this research analyzed the PDEs from the perspective of international climate action.

Methodology This research approaches the question “How international and national climate actions are guiding the Brazilian energy planning and governance?” as a manner to analyze the database of all published Brazilian Decennial Energy Plans from 2009 to 2019. The PDEs analyses emphasized GHG emissions and energy supply mix using the SWOT and GUT analyses (Fig. 14.2). The SWOT analysis (explained below) allowed us to summarize the document’s main internal factors directly related to the PDEs and external aspects of concern such as political and economic. The GUT analysis (explained below) was applied to the negative internal and external factors identified by SWOT analysis. The GUT

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Fig. 14.2 Methodologic procedures

analysis ranks the issues in order of importance based on their current state and escalation over time.

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SWOT Analysis The SWOT analysis is a strategic planning tool that analyzes internal factors as strengths (S) and weaknesses (W) and external factors as opportunities (O) and threats (T) (Humphrey 2005). The analysis produces a matrix that shows those perspectives in a summarized table, making it tangible for decision-making and strategic planning (Gürel and Tat 2017). The analysis is made in an iterative discussion. The first iteration is an aggregation of broad factors by the impression of each author. The subsequent ones are the refinement of each factor toward a concise list of representatives, assertive and coherent factors, via debates and discussions. The analysis was applied to the 12 PDE’s individually and focused on the introduction, GHG emissions, conclusion subsections of the environmental impact analysis, and summary for policymakers’ chapters, guided by the climate action perspective. We extended the analysis to other relevant chapters in the PDEs when necessary. Then, the results were aggregated in three SWOT matrices by period: before COP15 (PDE’s 2015, 2016, and 2017) (EPE 2006, 2007, 2008), between COP-15 and Paris Agreement (PDE’s 2019, 2020, 2021, 2022, and 2024) (EPE 2010, 2011, 2012, 2013, 2015) and after Paris Agreement (PDE’s 2026, 2027, and 2029) (EPE 2017, 2018, 2020b). All the identified external factors are related to the planned perspective in 10 years.

GUT Analysis: Priority Analysis The GUT analysis is a tool that defines prioritization considering the process of aging (Kepner and Tregoe 1981). It is part of the Kepner–Tregoe decision-making analysis that allows qualitative information to be converted into quantitative (Kepner and Tregoe 1981). The GUT analysis was employed to address the weakness and threats (issues) identified by the SWOT analysis considering its temporal evolution in the period, guided by literature review and the authors’ knowledge. The GUT is based on scoring three distinctive attributes: gravity (G), urgency (U), and tendency (T) (Table 14.1). Gravity refers to the weight of the analyzed difficulty, studying the result that can arise in the medium and long term. Urgency refers to the amount of time needed to solve problems. Tendency refers to the possibility of the problem growing over time. The process comprises a series of iterations where the authors discuss each characteristic of the issues and reanalyzes them relative to each other to assert a rank of importance. The process stops only when there is a consensus among the authors. Table 14.1 shows the initial criteria of the process before the iterations. The final numeric values are relative and nonlinear (i.e., an issue with ten points is more important than an issue with five; however, it is not necessarily two times more important).

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Table 14.1 Reference of the criteria used in the GUT analysis Points

Gravity

Urgency

Tendency

5

Extremely serious problem

Immediate intervention

Situation will get worse if nothing is done

4

Very serious problem

Urgent situation

Situation will worsen in the short term

3

Serious problem

Must be resolved as soon as possible

Situation will worsen in the medium term

2

Problem with little severity

Can wait

Situation will worsen in the long term

1

No severity

Not urgent

Won’t change

The Strengths, Weaknesses, Opportunities, and Threats of the Brazilian Energy Planning Following, we discuss the results obtained through SWOT and GUT analyses. The SWOT strengths and weaknesses regard the planned actions, not the effective ones. Figure 14.3 shows a timeline with important events discussed below. The first PDE was launched in May 2006; therefore, between this date till COP15, three PDEs were launched (PDEs 2015, 2016, and 2017). The SWOT analysis regarding this period is given in Table 14.2. Regarding opportunities, the environmental and climate discussions played an essential role in the international agenda in the analyzed period, motivated by the Earth Summit (1992), Kyoto Protocol (1997), and pushed by the Stern Review (2006). The discussions already pointed to the urgent necessity to decrease global GHG emissions related to the energy sector to mitigate climate change via a clean energy transition. In the Brazilian context, the international agenda was not an effective motivation to improve the share of renewable sources in the energy sector. Thus, the main threat found is that there was a lack of governmental pressure under the justification of the Brazilian energy supply mix being considered clean in comparison with the global standard due to the high use of renewable energy sources (e.g., PDE 2016, 55; PDE 2017, 410), with 48.4% of renewable sources in Brazilian energy supply mix (EPE 2021) compared with 13% in the rest of the world (IEA 2021). However, it

Fig. 14.3 Timeline of significant events to the analyzed periods (before COP-15, PDE’s 2015, 2016, and 2017; between COP-15 and Paris Agreement, PDE’s 2019, 2020, 2021, 2022, and 2024; and after Paris Agreement, PDE’s 2026, 2027, and 2029)

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Table 14.2 SWOT before COP-15 regarding PDEs 2015, 2016, and 2017 Strengths

Weaknesses

Increase in investment in R&D of renewable sources, such as sugarcane-based fuels and wind energy

Massive investments in fossil fuels production due to Pre-Salt discovery

R&D in energy efficiency

Increase in natural gas use in thermal power plants

Decrease of oil participation in thermal power plants Opportunities

Threats

Environmental and climate discussions played Lack of governmental pressure to increase the an essential role in the international agenda share of renewables on the energy supply mix

is important to note that, regardless of the period analyzed, PDE documents always highlight the clean level of the Brazilian supply mix compared to the global standard. The main driver to change in the energy supply mix in Brazil in the early 2000s was a severe energy crisis in 2001, known as Crise do Apagão (Blackout Crisis). This crisis highlighted the energy vulnerability, especially in the electric sector, due to the high use of hydropower generation, lack of investment, droughts, and economic growth (Goldenberg and Prado 2003). To avoid new crises, the Brazilian Government created a series of initiatives, for instance, the PROINFA (Program for Alternative Sources of Electric Energy) in 2002 (Law No 10438—PROINFA 2002). This program promotes the increase of non-traditional renewable sources in the electric supply mix, such as wind energy, biomass, and small hydropower plants. As strengths, the SWOT analysis captures the increase in investment in R&D of renewable sources, such as sugarcane-based fuels and wind energy, supported by PROINFA (e.g., PDE 2016, 141) aligned with the R&D in energy efficiency (e.g., PDE 2015, 76; PDE 2016, 135). Besides, the focus on biomass production influences the decrease of oil derivatives in thermal power plants by 10% on average in the period. PROINFA contributed to the Brazilian energy supply diversification, improving the participation of other renewable sources by 2.9% on average in the period. As for weaknesses, we identify the increase in natural gas use, present in all periods, commented below (on last SWOT) to avoid repetition, and a massive production investment in fossil fuels, influenced by the Pre-Salt oil reservoir discovery (2006). Pre-Salt exploration changed Brazil’s status from oil importer to exporter. The government promised only to export the oil and derivatives produced in the reservoir (to protect the internal market/energy supply mix). However, it was considered a weak statement as it is highly dependent on the external oil market (Pires and Schechtman 2009). In other words, the internal use of the oil produced by the Pre-Salt was more interesting than export due to the low external price. The Great Recession (2008–2009) was marked by a massive drop in oil prices, and the PDE 2017, which was produced in the same period, demonstrates a planned increase of oil-related sources’ participation in the energy supply mix of 3.2%, much higher

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Table 14.3 SWOT between COP-15 and the Paris Agreement regarding PDEs 2019, 2020, 2021, 2022, and 2024 Strengths

Weaknesses

Increase in investments in other renewable sources in the planned energy supply mix

PDEs present inconsistent statements about the importance of the energy supply mix in the GHG reductions Expected investments in renewable sources as a whole lost space to non-renewable

Opportunities

Threats

Strengthening the climate debate

Lack of governmental pressure to increase the share of renewables on the energy supply mix

Definition of the NDCs Creation of PNMC

Crise do apagão Increase in fossil fuel production

than the previous PDEs (0.2% and 0% increase from PDE 2016 and PDE 2015, respectively). Table 14.3 shows the SWOT analysis for the period between COP-15 and Paris Agreement. In 2009, COP-15 strengthened the climate debate worldwide and the signatories’ countries defined the NDCs. In the Brazilian context, the NDCs based the PNMC creation in the same year and influenced the energy planning since it is used as reference and guidelines in all PDEs during this period. For instance, PDE 2019 cites the PNMC to support a higher importance of the GHG mitigation measures in energy demanding process (PDE 2019, p. 292), PDE 2021 has the goal to reduce GHG emissions by energy production and use following the COP-15 and PNMC (PDE 2021, p. 320), and PDE 2024 presents objective measures to reach the reduction goal implemented in the planning. Box 14.1 summarizes the NDCs regarding the energy sector. Besides, the PNMC states a series of principles and actions to be considered and adopted in all public policies and governmental programs (Law n° 12187, December 29, 2009) (Law No 12187—National Climate Change Plan 2009). However, critical aspects of PNMC were vetoed on the same day of its creation. Among others, the commitment to energy transition to a 100% clean energy supply mix and the prevention of contingency in budget execution were vetoed based on the comparison of the Brazilian energy supply mix emission with other countries (Message n° 1123, December 29, 2009) (Brazil 2009). The PDEs were cited in the regulation of the PNMC as one of the main strategic plans to be based on the stated principles (Decree nº 7390, December 9, 2010, articles 3º and 5º; PDE 2020, 285) (Decree No 7390 2010). However, the PDEs present inconsistent statements about the importance of the energy supply mix in the GHG reductions. The main reason is the direct comparison with the land-use change (LUC) and other countries. In Brazil, LUC was the main responsible for GHG emissions (58% of Brazilian emissions in 2015; PDE 2019, Table 197). The PDEs stated the decrease of the planned LUC emissions over time would mean a “greater importance” of the energy sector regarding GHG emissions (e.g., PDE 2019, 292; PDE 2022, 319), due to its expected growth (the energy sector was responsible for 37%

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of Brazilian GHG emissions in 2012 and LUC was responsible for 15%; MCTIC 2020). Nevertheless, this importance is contested in the same document by showing that the Brazilian energy sector planned and effected GHG emissions would be small compared to countries like the USA and China. The PDEs in this period expected an increase in both fossil fuels production and renewable sources. The first is motivated by the Pre-Salt discovery and the second by the climate discussion and the energy vulnerability due to the Crise do Apagão. There was indeed an overall increase in fossil fuel production in the period grounded in the funding of over 224 billion USD to the mega capitalization of Petrobras in 2010 to accelerate its development (PETROBRAS 2010). The 2014 oil crash did not stop this increase when the Organization of the Petroleum Exporting Countries (OPEC) dropped oil prices in response to the intensive exploitation of shale oil and gas in the USA and Canada (Stocker et al. 2018, 4). In the period between COP-15 and the Paris Agreement, the PDE also planned an overall increase in investments in other renewable sources in the planned energy supply mix from 3.7 to 8.1% of the total investments in the energy sector. The main increase was wind energy, which had several projects approved between 2009 and 2010, pushed by political interest and companies such as Siemens and Odebrecht (Viola and Franchini 2014). However, the PDEs in this period have dropped the planned investments in sugar cane fuels from 21.5 to 16.9%. The result was that expected investments in renewable sources as a whole lost space to nonrenewable (primary oil), from 47.8 to 45.2% of total investments in the period. Table 14.4 shows the SWOT analysis for the period after Paris Agreement. The Paris Agreement started to change the dynamic about addressing climate action globally, strengthening the international climate action pressure. It impacted the Brazilian context, influencing the PDEs, integrating the NDCs (Box 14.1) in the planning. The NDCs are mentioned in the texts at least 30 times per document, especially in the “Introduction”, “Socio-Environmental Analysis”, Table 14.4 SWOT after the Paris Agreement regarding PDEs 2026, 2027, and 2029 Strengths

Weaknesses

Decrease of gasoline usage due to increase of biofuels

Increase in natural gas and oil productions due the exploration of Pre-Salt

Climate change impacts analysis is considered, Increase in natural gas use especially in renewable resources Increase of renewable resources, especially, non-conventional

Numerical uncertainties of future scenarios are not provided, especially climate change related

Partial integration of the energy planning and the NDCs

Lack of GHG emissions inventory of the energy supply mix during the period

Opportunities

Threats

Strengthening of international climate pressure Political instability inside and outside Brazil regarding climate action RenovaBio policy

New Gas Market

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and “Results Consolidation” chapters (e.g., PDE 2029, 265). The electric sector and biofuels are the main subjects of the mentions. Remarkably, the PDEs in the period cite the Brazilian biofuels policy (RenovaBio, Law nº 13576, December 26, 2017) (Law No 13576—RenovaBio 2017), which states about amplification of the use of biofuels, especially targets related to decarbonization and planning general action to promote better usage of these fuels—such as ethanol. Although the Paris Agreement is fundamental to climate action, its implementation largely depends on political factors such as guide policies and the interest of different stakeholders (Doukas et al. 2018). For instance, globally, Donald Trump’s administration between 2017 and 2021 in the United States of America (USA) was marked by massive actions against the environment and international climate action. The most important was the US withdrawal from the Paris agreement, announced in June 2017, and officialized in November 2020 (Selby 2019; Tollefson 2017). However, the action was never officialized (Abessa et al. 2019). Formerly, the transition from Dilma Roussef’s administration to Michael Temer’s in 2016 administration was marked by impeachment and the clear intent to change various policies in the course. It was followed by the replacement of some directors of the state-owned enterprise that makes the PDEs (Empresa de Pesquisa Energética, EPE) and the changes in the document itself and the availability of some usually public data. The most important regarding climate action was removing the GHG emissions inventory (e.g., PDE 2026, 239). Therefore, the political instability inside and outside Brazil regarding climate action is a threat to consider. The analysis accessed four strengths and four weaknesses regarding the PDEs in the period. The PDEs insert the analysis of climate change impact, especially in hydropower generation (e.g., PDE 2026, 94). There is an increase of conventional and non-conventional renewable sources of 4% over ten years (planned), representing up to 12% of the total energy share. The conventional and non-conventional renewable sources are the only source with a planned increase in the energy share for the period. Most of the electric demand is provided by renewable resources. For instance, PDE 2029 shows the use of renewable resources in nearly 80% of the installed electric capacity in its period, with a planned increase of the renewables (excluding decentralized generation and small hydropower centrals, PDE 2029, 71). It is planned to increase fossil fuel production and natural gas use. Oil production was estimated to rise from 2.6 (2016) to 5.2 (2026) millions of barrels per day (50% increase) in PDE 2026 and from 3.2 (2020) to 5.5 (2029) millions of barrels per day (58% increase) in PDE 2029. Natural gas production should also rise from 104 (2016) to 253 (2029) million m3 per day (PDE 2026, 152; PDE 2029, 153). However, the projected increase of fossil fuel production did not reflect in its consumption due to the expected decrease in oil consumption that overcame the rise of natural gas consumption. A notable factor that led to this was the decrease in gasoline usage due to increased biofuels (e.g., PDE 2029, 204). Regarding natural gas usage, its increase is supported by energy planning and other policies. The PDEs mention the New Gas Market (Decree n° 9934; July 24, 2019) (e.g., PDE 2029, 188) as an essential factor of influence. Natural gas was depicted as a clean alternative to oil (e.g., PDE 2026, 238; PDE 2029, 265), even if natural gas only emits 27% less than oil

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and 44% less than coal in thermal power plants in CO2 per Joule (U.S. DOE 2016). Under the lens of climate action, we classify it as a threat. Because the New Gas Market is expected to lower the natural gas price, making it more competitive against renewable sources, potentially hampering its investments (Gürsan and de Gooyert 2021) (see Chap. 8). Finally, documents in this period mention the lack of the numerical uncertainties of future scenarios as a matter of concern. This point is fundamental to governance, especially climate change related because it can directly impact renewable sources, for instance, the water supply to hydropower generation and the atmospheric circulation to wind energy. The PDEs address it using “what-if” scenarios in some analysis but recognize the need for robust uncertainties (PDE 2026, 13; PDE 2029, 8).

The Important Challenges The GUT analysis brings a temporal perspective that complements the SWOTs regarding their gravity, urgency, and tendency. Its score reveals relative importance in the list of problems to address. The calculated GUT score is not a direct quantitative indicator of this importance. However, it is a tool to rank the issues and support the decision-making process and, therefore, the governance of the energy sector. We estimated the relative risks of the weaknesses and threats identified in the SWOT analysis in this analysis. Table 14.5 summarizes the items analyzed. The most essential issues detected in the GUT analysis are strongly related to the energy sector governance. Also, even those points related to more practical aspects are governed by the decision-makers, making governance a central theme in the analysis. We discuss the most important aspects and the expected implications if they are not addressed. Table 14.5 GUT matrix Rank SWOT

Gravity Urgency Tendency GxUxT

1

Political instability inside and outside Brazil regarding climate action

5

5

4

100

2

PDEs present inconsistent statements about the 4 importance of the energy supply mix in the GHG reductions

5

4

80

3

Increase in fossil fuel production

5

3

5

75

4

Numerical uncertainties of future scenarios are 4 not provided, especially climate change related

4

4

64

5

Increase in natural gas use

4

5

60

3

6

New Gas Market

3

4

5

60

7

Lack of GHG emissions inventory of the energy supply mix during the period

2

3

3

18

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The international climate actions directly impacted the Brazilian energy planning via PMNC. It is noteworthy that all PDEs cited the PNMC, COP-15, and Paris Agreement as guidelines in their respective period of influence. PNMC focused on the LUC emissions reduction due to the historical influence of this sector as the leading GHG emitter in Brazil (MCTIC 2020). In the energy sector, it is important to highlight that the Brazilian energy supply mix relies largely on renewable sources, with 77% of installed electric capacity in 2005 (Executive summary of PDE 2015, 34) and 83% in 2020 (EPE 2020a). In brief, this leads to planning that uses the international climate action to valorize clean sources and simultaneously uses the lack of commitment of the energy sector to justify the emissions of fossil fuel sources. Therefore, we attribute a high gravity and urgency to this issue. We also attribute a high tendency as the contradictory narrative supports the continuity of the issue. The political instability regarding climate action inside and outside Brazil is a key of energy planning governance. The Brazilian Government influences the energy market via regulatory agencies (e.g., Agência Nacional de Energia Elétrica, ANEEL), public companies (e.g., Eletrobras), and direct economic incentives (e.g., PROINFA and RenovaBio). Energy planning is based on a medium- and long-term vision, making it susceptible to harm by quick changes in the government orientation, especially by the executive power elected every four years in Brazil. Regarding climate action, some of the main instruments to support the medium- and long-term planning are the international agreements such as the Paris Agreement. However, the adequate pressure created by these agreements is dependent on international politics and therefore is susceptible to harm by their instabilities. The fossil fuel usage in the electric matrix transitioned over the PDEs from coal and oil to natural gas, comparatively cleaner but not renewable. The fossil fuel production in Brazil rose consistently in the period (ANP 2021) by exploiting mainly the Santos and Campos Pre-Salt basins. The Pre-Salt discovery changed the perspectives of the Brazilian oil since 2007, and its exploration was heavily regulated in favor of Brazilian economic security. However, the fossil fuel regulations have been relaxed over the years, encouraged by political and economic episodes such as the Great Recession. Since most of the production was destined to be exported, the impact on the energy supply mix related to CO2 emissions could not be directly apportioned, suggesting a lesser impact on climate. This scenario does not contribute to governance toward climate action, especially with political instabilities. We attribute a high gravity and tendency to this issue as it connects directly to GHG emissions, and there is a clear trend of increase. However, the urgency is medium due to economic factors. Fossil fuel exportation generates an important income and is a political instrument to Brazil. Thus, it is necessary to take a slow and cautious approach to this issue to minimize harm to the economy. The PDEs present methodological issues as they do not properly approach the uncertainties of future scenarios, especially climate change. This is recognized and discussed in PDEs after the Paris Agreement and addressed by implementing “what-if” scenarios. The urgency and tendency of this issue have been aggravated by climate change due to the high dependence on hydroelectricity. The main consequence is worsening the energy security illustrated by the 2021 water and energy

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crisis. In addition, the PDEs before 2016 presented a GHG emissions inventory, which is a fundamental indicator to track the progress of the sector in the international commitments of the Paris Agreement. The lack of the inventory after 2016 does not imply that the emissions were not accounted for; however, it is directly against the “disclosure of information with public interest, regardless of requests” guideline of the information transparency policy (Law n° 12527, article 3°, item II, November 18, 2011, translated by the authors) (Law N° 12527 2011). The difficulty accessing this data motivates initiatives from non-governmental organizations (e.g., Observatório do Clima) to democratize this information. The increase in natural gas use is a general trend over the years (ANP 2020) supported by the rise of fossil fuel production and national incentives as the mentioned New Gas Market. We identify a high tendency because of the supporting scenario and the existing trend. The medium gravity is because natural gas is a cleaner alternative to oil and coal, and it has been pointed as the transitional fuel to a renewable energy supply. However, we identified a high urgency in this matter because natural gas is not currently employed with the goal of a cleaner energy supply in mind and can also be a serious obstacle in the path toward climate actions by offering a cheaper alternative to renewable sources as mentioned earlier (Furlan and Mortarino 2021).

Final Remarks In retrospect, there is a long path between international climate action and Brazilian energy governance. The COP-15 and Paris Agreement directly impacted energy planning because Brazil pointed to the energy sector as a key sector to accomplish its commitment (right after the land-use change). Other international climate actions did not impact energy planning explicitly due to the lack of formal commitment. There is a series of factors to consider. Brazil was a global reference for an energetically clean country because most of its electrical sources were hydropower. However, Brazil did not accomplish the commitment of reduction of GHGs emissions in COP-15 and made a commitment to just maintain the emissions in Paris Agreement (considering the emissions inventory available at the time). This leads to a lack of governmental pressure to increase the share of renewable sources in the energy supply mix and other challenges. We conclude that the Brazilian energy governance had not effectively followed the international climate action due to the identified challenges. These issues culminate in an underappreciation of the enormous potential renewable sources. The path to climate mitigation and adaptation is full of challenges, some already in the process of resolution, some affected by practical and economic hindrances. We recommend that the energy sector governance incorporates long-term plans oriented toward climate action, even if eventual increases in GHG emissions are required in its middle. Ideally, the planning must be applied effectively in the governance, resilient against potential political instabilities, and not dependent on governmental pressure.

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Acknowledgements This work was partially financed by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior—Brasil (CAPES) by providing the scholarship to Ana Fontenelle, and Rylanneive Teixeira, Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq), by providing the scholarship to Leonardo Kamigauti. Peyerl thanks the current financial support of grant Process 2017/18208-8 and 2018/26388-9, São Paulo Research Foundation (FAPESP). Mariana Ciotta thanks especially Coordenação de Aper-feiçoamento Pessoal de Nível Superior (CAPES), for the scholarship. All the authors gratefully acknowledge support from SHELL Brazil and FAPESP through the Research Centre for Gas Innovation (RCGI) (FAPESP Proc. 2014/502794 and 2020/02546-4), hosted by the University of São Paulo, and the strategic importance of the support given by ANP. This work was partially financed by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior—Brasil (CAPES). Finally, the authors thank the essential help of Lucas A. S. Filho.

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Chapter 15

Effect of the COVID-19 Pandemic on the Brazilian Energy Sector Mariana Ciotta, Drielli Peyerl, and Luis Guilherme Larizzatti Zacharias

Abstract This work investigates the Brazilian energy sector between 2018 and 2021 from the perspective of the COVID-19 pandemic. The pandemic has affected the energy sector by widely changing consumption and behaviour patterns. This study is based on four layers of analysis: energy consumption, social isolation, greenhouse gas emissions, and household income data. This work correlates with how the pandemic affected the Brazilian energy scenario and whether it is possible to discuss consumption reduction and energy justice in the face of these factors. Thus, understanding the Brazilian context as a whole is sought in light of questions about reducing consumption, climate perspectives and decision-makers’ position and influence on the Brazilian energy sector. The results show a clear decrease in consumption for most fuels and sectors investigated. However, part of this decrease seems to be only pent-up demand and has unplanned, unsustainable origins, not correlated with the concept of energy justice. The observations of this study also address the perspective of climate resilience, given the challenges of dealing with the new paradigms of the global energy sector. Keywords Energy transition · Covid-19 · Energy sector · Energy justice · Climate resilience · Brazil

M. Ciotta (B) · D. Peyerl · L. G. L. Zacharias Institute of Energy and Environment, University of São Paulo, Av. Professor Luciano Gualberto, n° 1289, São Paulo, Brazil e-mail: [email protected] D. Peyerl e-mail: [email protected]; [email protected] L. G. L. Zacharias e-mail: [email protected] D. Peyerl University of Amsterdam, Science Park 904, 1098 Amsterdam, The Netherlands © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Peyerl et al. (eds.), Energy Transition in Brazil, The Latin American Studies Book Series, https://doi.org/10.1007/978-3-031-21033-4_15

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Introduction The World Health Organization declared in March 2020 that COVID-19 is a pandemic, and since then, the world economy has been affected profoundly (Sohrabi et al. 2020). While the pandemic’s effects on national health and economic systems tend to be mentioned in the media, the implications of the disease for the energy sector and climate issues are rarely mentioned (Sovacool et al. 2020). The relevance of thinking about the energy sector from the perspective of the recent pandemic and climate change is that the former serves as a test of resilience to the impacts and changing patterns expected by the latter (Chen et al. 2021; Jin 2020). When looking at pre-pandemic patterns in the energy sector, by year-end 2019, oil supply and demand conditions indicated some stability, exemplified by the Brent oil price, which had its lowest variability in five years (EPE 2020f). However, the arrival of the pandemic in early 2020 brought consequences for the energy sector that are not yet fully understood, such as changes in energy use and mobility patterns. The pandemic has been testing the resilience of the structure of energy sectors in the face of unexpected events, which is particularly relevant in a scenario of growing concern over climate change and its effects on the energy universe. COVID19 can act as an external force causing changes in systems, just as were the oil shocks, economic crises, resource scarcity, and among others (de Mello Delgado et al. 2021; Sovacool et al. 2020). The destabilization of paradigms or regimes allows the reconfiguration of the energy system, establishing windows of opportunity for redirecting the modes of production and energy consumption (Renewable Energy Agency 2020). The elucidative nature of the context gives the importance of this type of analysis: the conditions caused by the pandemic allow us to analyse situations of stress in the system. The pandemic changed the path traced by energy planning and the energy market (Chen et al. 2021; EPE 2020f). How are decision-makers managing the energy system in the face of unexpected and complex changes in energy consumption? Within this crisis, is the government managing to meet the current energy demand of the population? What lessons can we learn from the pandemic to plan a more resilient system? Can the COVID-19 pandemic help us face a future of climate change with greater preparedness? Furthermore, we present the discussion of the data concerning the conceptualization of energy justice in the body of the work based on significant references in the area. Brazil is the case study of this book chapter. The aim is to investigate how the pandemic has affected the Brazilian energy sector between 2020 and 2021 (2018 and 2019 as a basis for comparison), bringing an overview and discussing pertinent issues in the energy context in the country. The pandemic-energy nexus was analysed from four perspectives: social isolation, household income, energy consumption, and greenhouse gas (GHG) emissions. Based on the results, the impacts and existing relationships will be discussed from the perspective of energy justice and climate resilience. The analysis used in this work relies on four levels of data, considering the time before and during the pandemic: (i) Power sector consumption from reports made available by the Ministry of Mines and Energy (MME), Energy Research

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Company (EPE), and National Electric System Operator (ONS), (ii) GHG emissions were taken from the System for GHG, and Removals Estimates (SEEG) and recent publications from research institutes such as the National Institute for Space Research (INPE), (iii) Isolation data obtained from reports available by Google and In loco and (iv) Income data from the National Sample Survey of Households (PNAD) was conducted by the Brazilian Institute of Geography and Statistics (IBGE).

COVID-19 and the Energy Sector in Brazil Social Distancing Data The importance of studying data on social isolation stems from the impact this measure has on mobility and, therefore, on the energy consumption associated with various types of transport. The country’s social distancing measures varied between Brazilian states and municipalities (Aquino et al. 2020). It means that the different results of this isolation are felt differently across the Brazilian territory (i.e. changes in energy consumption patterns and emissions). However, we approach estrangement from a national perspective, commenting where necessary on local variations (Inloco 2021). The isolation data from Brazil during the pandemic of COVID-19 were drawn from three key sources: the reports made available by Google, comments from official Brazilian government websites, and the InLoco website. It can be seen from the data on isolation (started in February 2020 and discontinued in March 2021) that only in March 2020 did social isolation exceeds the 60% mark (Fig. 15.1) (Inloco 2021). The latest data published by Google indicates that in March 2021, a reduction in mobility was noticed throughout Brazil in retail and leisure (− 24%), parks (− 31%), public transport stations (− 16%) and workplaces (− 4%), with the only regions with an increase in traffic being markets and pharmacies (+ 26%) and residential areas (+ 9%) (Google 2021). Data shows that, although variable, a certain level of isolation remains constant in the country for the period and may intensify depending on government measures and the death toll from the pandemic. Observing these social distancing levels is important as changes may cause trade-offs between intense residential energy uses and decreased transport/commercial use.

Emission Data Brazil is the sixth-largest emitter of GHG on the planet, but with a unique profile, in which land accounts for more than two-thirds of the emissions (Table 15.1) (SEEG 2020). The pandemic potentially can reduce GHG emissions in Brazil, with

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Fig. 15.1 Social isolation index, data from Inloco (2021)

reductions in the sectors linked to industry and waste, offsetting or neutralizing the increase in emissions from livestock (SEEG 2020). However, the trend is that Brazil’s GHG emissions in 2020 will increase compared to 2019 (SEEG 2020) because the main source of emissions, land-use change (44% of emissions in 2018), is rapidly expanding due to deforestation in the Amazon, and it continues to advance despite the pandemic (SEEG 2020). In the energy sector, a large part of the emissions is associated with fossil fuels. In 2018, 21% of Brazil’s GHG emissions came from this sector, with 49% corresponding to fossil fuel burning in transport, 15% industrial energy consumption, 13% fuel production activities and 12% electricity generation (SEEG 2020). The Brazilian energy sector emitted, on average, 78.8 kg of CO2 to produce 1 MWh, a low rate when compared with countries in the European Union, the United States and China Table 15.1 Participation of sectors in Brazil’s GHG emissions (2018) and assessment of the impact of pandemic COVID19 emissions, data collected from SEEG (2020) Sector

Emissions (tCO2 e GWP)—2018

% of total emissions—2018

Potential impact of Emissions COVID on trajectory trend in emissions 2020

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427,919,097

21

Reduction

Potential reduction

Industrial processes

101,233,912

5

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Agriculture

492,166,292

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Increase

Waste

92,892,835

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845,912,581

44

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1,939,121,718

100

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Increase

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(EPE 2021a). In 2020, for each ton of oil equivalent (toe) released, Brazil emits 1.42 tCO2eq /toe, which is equivalent to 72% of what the European Union emits (1.97–1.42 tCO2eq /toe), 64% of what the United States emits (2.21–1.42 tCO2eq /toe) and 47% of what China emits (2.89–1.42 tCO2eq /toe) (EPE 2021a). In 2020, the total anthropic emissions associated with the Brazilian energy matrix reached 398.3 MtCO2eq , with most of it (179.8 MtCO2eq ) generated in the transportation sector (EPE 2021a). In this way, the impact of social isolation brings about a great change in emissions linked to the energy sector because fewer mobility results in less use of oil and its oil products. Considering the electricity sector in 2020, Brazil emits 99.6 kgCO2eq /MWh, about 1/2 of the value emitted by the European Union (322.8 kgCO2eq /MWh), 1/4 of what is emitted by the American electric sector (417.7 kgCO2eq /MWh) and 1/7 of the emissions of the Chinese electric sector (684.9 kgCO2eq /MWh) (EPE 2021a).

Income Data Brazil has been in economic difficulties for some time, with its GDP having fallen by 3.55% in 2015 and 3.31% in 2016. The average economic growth between 2017 and 2019 was 1.09% (Garcia et al. 2021; IBGE 2019). The main income indicator in Brazil is the salary mass, measured by the IBGE’s continuous PNAD. The salary mass corresponds to the sum of the wages and incomes of all Brazilians in the most diverse social occupations (i.e. self-employed, informal, public employees) (IBGE 2021). Data from the Continuous PNAD, measured by the IBGE, in the quarter from July to September 2020, show that Brazil reached 14.6% unemployment, totalling 14.1 million people without occupation (Fig. 15.2). This is the highest level since January 2012, when the survey was implemented (IBGE 2021). Unemployment at such a high level has a strong impact on income, as indicated by official indicators. Also, unemployment was already a trend observed in recent years, even before the pandemic. The wage bill in Brazil fell by 9%, from R$219.8 billion in 2019 to R$199.4 billion in 2020 in the same comparable quarter, the lowest level since the PNAD survey was implemented in Brazil (IBGE 2021). The permanence or lack of COVID emergency wages provided by the government has relevant impacts on Brazilians’ income and, therefore, on their living standards (Garcia et al. 2021; Levy and Menezes 2021). Greater purchasing power can result in greater energy consumption and, therefore, more emissions. At the same time, lower purchasing power can mean lower quality energy (i.e. paraffin and firewood for cooking), ultimately resulting in higher emissions.

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Fig. 15.2 Unemployment rate, by age, from Q1 2012 to Q4 2020. Data from IBGE (2021)

Power Sector Consumption Perspectives of the Brazilian energy sector during the pandemic can be observed from various aspects: demand, supply, electricity sector, fossil fuels, and among others. This topic aims to comment on general aspects of the energy sector, focusing on consumption and its patterns of variation. The onset of the pandemic has already shown changes in Brazilian electricity consumption: the first quarter of 2020 saw a 0.9% reduction in electricity consumption compared to 2019 figures (EPE 2020a). The three consumption classes-residential, industrial, and commercial—showed falls of 0.3, 0.4 and 2.2% in the quarter (EPE 2020a). In the second quarter of 2020, electricity consumption in Brazil retracted by 8.3% compared to the same period of 2019 (EPE 2020b). In terms of classes, the largest drop was observed in the commercial sector (− 21.5%), followed by the industrial sector (− 11.8%). In comparison, the residential sector recorded a growth of 2.8% in the period analysed (EPE 2020b). From July to September 2020, electricity consumption grew by 0.9% compared to the same period of the previous year. There was a growth of 7.4% in the residential sector and 2.1% in the industrial sector, while the commercial class continued to fall (− 10.6%) on the same comparison basis (EPE 2012, 2020c). In the last quarter of 2020, it is noted that electricity consumption grew by 1.5% against the same period of 2019. However, when analysing these data by sector, there are distinct behaviours: the residential and industrial sectors grew by 7.0% and 3.2%, respectively, while the commercial class showed a drop of 8.6% (ANP 2020; EPE 2020d). From January to March 2021, average energy consumption grew by 3% compared to last year’s same quarter (EPE 2020e). Breaking it down by class and comparing it with the previous quarter, commercial consumption fell by 4%. In contrast, the residential and industrial followed the growth trend observed in recent quarters, expanding by 5% and 7.2%, respectively (EPE 2020e).

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4,30,00,000

1,40,00,000

4,10,00,000

1,30,00,000

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1,10,00,000

2019

Month

82,00,000

Oct

Dec

Nov

Jul

Sep

2018

62,00,000

2019 Dec

Oct

Nov

Sep

Aug

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Jun

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Apr

52,00,000 Jan

Dec

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Apr

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1,20,00,000

72,00,000

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MWh

92,00,000

1,50,00,000

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(b)

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MWh

MWh

Concerning the consumption of oil products in the Brazilian demand for fuel during the period of social isolation in 2020, data from the National Agency of Petroleum, Natural Gas and Biofuels (ANP) indicate a drop in sales of aviation kerosene, QAV (− 85%), C gasoline (− 29%), and B-oil diesel (− 14%) made in April 2020, compared to the same period in 2019. On the other hand, sales of liquefied petroleum gas (LPG) increased by 4% in the same month (ANP 2020). Also, data from the Ministry of Agriculture, Livestock and Supply (MAPA) point out that the marketing of ethanol decreased by 37% in April (Ministério da Agricultura Pecuária e Abastecimento 2020). Figures 15.3 and 15.4 present the electricity consumption in the grid, residential, industrial, and commercial and fuel sales of gasoline, ethanol, diesel, and aviation kerosene.

2020

Month

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(d)

2500

4000 3500 3000 2500 2000 1500 1000 500 0

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10³ m³

10³ m³

Fig. 15.3 a Electricity consumption in the grid (total), data from EPE (2020f), b residential consumption, data from EPE (2020f), c industrial consumption, data from EPE (2020f) and d commercial consumption, data from EPE (2020f)

2018 1000

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Fig. 15.4 a Gasoline sales (EPE 2020f), b ethanol hydrated sales, c diesel sales, and d aviation kerosene sales, data from EPE (2020f)

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The data from the National Energy Balance for 2019 and 2020 allow changes in the sector to be assessed (EPE 2020a, 2021a). In 2019, the transport sector surpassed the industrial sector in energy consumption in Brazil, accounting for 32.7% and 30.4%, respectively (EPE 2020a). This position was maintained in 2020, with transport accounting for 32.2% of energy and industry for 31.1% (EPE 2021a). However, the overall scenario was a 2% reduction in energy use in 2020 compared to 2019, going from 259.9 to 524.6 Mtoe, and the services sector was the one that presented the greatest decline (EPE 2021a). The impact of the pandemic on industries was most intense in April and May 2020, and electricity consumption even varied negatively by double-digit rates (EPE 2021a). Meanwhile, energy consumption in transport has been reduced by 6.4% compared to 2019. The big highlight is aviation paraffin, with a drop of 42.8% and an increase of 8.4% in biodiesel (EPE 2021a). The impact of the pandemic on energy consumption in homes and businesses is due to social isolation measures and the closure of businesses, especially in the first months of the health crisis. Residential consumption grew by 3.4% year-over-year in 2019, with natural gas consumption increasing by 8.4% (EPE 2021a). In the second quarter of 2020, a reduction of 7.7 and 11.2% were observed in the trade and services sector (EPE 2021a). When comparing the pandemic data with the expected growth values in the 10year energy expansion plan for 2021, a discrepancy between the predicted values and the values obtained in reality can be seen (EPE 2012). The pandemic, therefore, causes a rupture in the usual energy planning.

Reflections on the Effects of the COVID-19 Pandemic Energy consumption within the residential, industrial, commercial, and rural sectors is related to the population’s size, consumption profile, growth rate, and purchasing power. It means that countries with growing populations must be especially attentive to expanding their energy supply mix, which implies real questions about the limits of energy expansion based on the availability of natural resources (Fiorino 2017; Kocsis 2018). Two crucial discussions at the interface between household income and natural resource availability come into play: consumption reduction and energy justice. The decreased energy consumption is associated not only with the knowledge that the Earth has finite natural resources. But, it also embraces the idea of energy demand as a conception that connects various fields of knowledge such as social practices, geography, historical moment, and material possibilities (Goggins et al. 2019; Jensen et al. 2018, 2019). The concept of energy justice, on the other hand, is more linked to issues of unequal access to energy resulting from social inequalities and associated factors (Heffron and McCauley 2017; Jenkins et al. 2016; Sovacool and Dworkin 2015). The idea of energy justice emerges from the discussion of the social science agenda that seeks to apply concepts of justice to energy policy, energy production, energy consumption, energy security and climate change (Carley and Konisky 2020;

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Jenkins et al. 2016, 2018; McCauley and Heffron 2018). Energy justice issues are widely connected with climate justice debates and the concept of just energy transition (Jasanoff 2018; Milanez and Fonseca 2012). The challenges of reducing GHG emissions result in a gradual replacement of fossil fuel use and make it imperative to discuss access to clean and affordable energy (Healy and Barry 2017; McCauley et al. 2019). As demonstrated above, bringing these two lines of discussion to Brazilian reality requires analysing the national energy supply mix considering technical and social aspects. The major challenge in analysing the impacts of the COVID-19 pandemic on the electricity sector comes from the lack of historical perspective to say whether these effects are temporary or will remain long-lasting. Although it is possible to discuss this scenario in terms of pent-up demand, it is impossible to fully contemplate the temporal duration of the pandemic since it is the result of various factors, and, likely, it will never totally disappear, becoming endemic (Hunter 2020). Another important aspect is to observe how the variables studied influence each other and make it possible to check the Brazilian energy scenario. In the short term, the pandemic is reflected in the impact on energy demand and CO2 emissions in several countries (Carvalho et al. 2021). These effects are not homogeneous, depending on social class, gender, type of employment, and other aspects that shape the relationship of urbanization spaces (Carvalho et al. 2021). Still, considering the short term, the impact on mobility is extremely evident due to changes in public and private transport (Kuzemko et al. 2020). Therefore, the use of petroleum products and biofuels reduced consumption, with the impact being associated especially with social isolation and reduced mobility (EPE 2020g). With the slowdown in the transport sector, the oil and gas chain was impacted in Brazil and worldwide (Renewable Energy Agency 2020). An important aspect to understand is whether the pandemic causes a rupture of previous processes (such as the increased use of fossil fuels in the supply mix and impoverishment of the population) or just an acceleration (Jiang et al. 2021). This process can be different from country to country, reiterating the different state approaches observed in dealing with the pandemic. The degree of isolation and mobility restriction, proposals that depend on federal, state, and municipal policy spheres cause a greater or lesser effect of changing consumption patterns. It is extremely complicated to discuss post-pandemic perspectives as the pandemic was not yet over in 2021. Different paths may be traced depending on political choices regarding the pandemic and the energy sector. Variables such as a fully vaccinated population can change the isolation scenario and current living standards, depending on political actors and input availability. A relevant concept that needs to be articulated in the discussion is the idea of energy justice. In a world that considers today’s transformations, energy planning must consider the principles of energy justice (Heffron and McCauley 2018; Sovacool et al. 2017). These principles consider not only the technical or technological sphere of the energy universe but also an ethical layer that considers the dilemmas of allowing different populations to have access to energy adequately, not disregarding tradeoffs of environmental protection and various social inequalities (Salter et al. 2018;

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Sovacool and Dworkin 2014). Therefore, the concept of just transition is articulated. COVID-19 can spotlight this situation by revealing the vulnerabilities of the energy system (Ranjbari et al. 2021; Sovacool et al. 2020). The pandemic may bring about structural changes and changes in mentality. For the first time in the twenty-first century, a global emergency is perceived that invokes profound changes in human behaviour (Moya et al. 2020; Winter et al. 2020). In this sense, the discussion about the possibility of talking about reducing consumption in the face of an unfavourable economic reality comes into play. The consumption changes in the Brazilian scenario do not seem to arise from a behavioural change thinking about climate change, but they also seem to tend to return to previous patterns even in the face of difficulties (i.e., drop in population income) (Khanna et al. 2021; van de Ven et al. 2018). Perhaps this discussion can only gain weight in a scenario where the pandemic continues for a long time. It is possible to argue that long-term impoverishment and the need for isolation will eventually change consumption patterns. The most current data on the Brazilian scenario is difficult to read: even though some fuels continue to rise, such as biodiesel, the EPE’s expectation for the fuel market is that the pandemic will affect Otto cycle fuel sales in 2020 and will present effects in the short term (EPE 2020g). In 2021, there is a trend towards recovery in the Otto fuel market, although not fully restored to pre-pandemic levels (EPE 2021a). Renewable energy also indicates that it could accelerate Brazil’s GDP compared to other energy types (Magazzino et al. 2021). This is made even more uncertain by the uncertainty about the pandemic’s temporal continuity. In the long run, Pent-up demand can end up becoming a reduction in consumption. Furthermore, in 2018, while developed countries such as Iceland, Norway, Canada, and Sweden consumed, respectively, 54.6 MWh/capita, 24.1 MWh/capita, 15.4 MWh/capita and 13.3 MWh/capita, Brazil still consumed only 2.6 MWh/capita, reinforcing the idea of a Brazilian pent-up demand (IEA 2018). It is clear, however, that it is necessary to consider that these countries have colder climates and therefore have high energy consumption with heating. Also, the Brazilian context cannot be excluded from what happens in other countries in the face of the pandemic. Although they have different social contexts and approaches, what is observed in Europe, Asia, and the United States can teach valuable lessons for the Brazilian energy sector (Chien et al. 2021; Wang and Zhang 2021; Werth et al. 2021). Most European countries faced a fall in energy consumption in the first months of the pandemic (Werth et al. 2021). Consumption has also been reduced in China, and in the first months of the pandemic, it was possible to notice an increase in air quality (Wang and Zhang 2021). The experience of the United States, with less government restrictive measures, also sees a reduction in energy consumption in the first months of the pandemic but soon returns to the previous dynamics (Gillingham et al. 2020; Wang and Han 2021). However, the origin of these reductions differs from that expected in an optimal reduction scenario, which focuses on behavioural and structural changes in the energy system (Gillingham et al. 2020). Finally, it is important to argue that even if there were a reduction in energy consumption in Brazil, this reduction would not follow the concept of energy justice.

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A change that results in impoverishing the country’s population disagrees with social justice criteria and can also lead to other damages, such as increased emissions associated with cheaper and lower quality fuels (Ciotta and Peyerl 2021). The reduction of desirable consumption starts with knowledge about energy choices, which is not observed in the country. It is not possible to infer about the durability of this reduction because it is still nebulous the pandemic’s paths. Above all, it is not possible to say that this reduction occurs following the concepts of energy justice.

Final Considerations Although it is impossible to answer all questions fully, a few points can be clarified. Is the energy consumption reduction observed enough to say that the pandemic of COVID-19 has intensified a trend of permanently reduced energy consumption in Brazil? Given that the current consumption reduction seems to be linked to pent-up demand and reduced population purchasing power, we believe it is impossible to talk about “consumption reduction” in terms of a just energy transition. How are decision-makers managing the energy system in the face of unexpected and complex changes in energy consumption? Globally, the approaches were diverse, which is also verifiable in the Brazilian internal dynamics, where states took different attitudes towards the pandemic. The countries that presented more restrictive measures also presented more impacting results in reducing energy consumption and emissions. However, these measures are not sustainable in the long term, making it necessary to think about intervening in structural changes in the energy sector and communication about behavioural changes. Within this crisis, is the government managing to meet the current energy demand of the population? Approaches vary from country to country according to their possibilities for action, government guidelines and economic inequalities. In the case of Brazil, the federal sphere ended up being very absent in decision-making, and each state had relevance in its internal decisions, resulting in very different experiences even within the same country. What lessons can we learn from the pandemic to plan a more resilient system? Among the possible lessons, one can mention the understanding of a more refined sense of urgency regarding the need for preparation, collective organization and social education about extreme situations and their impacts. Can the COVID-19 pandemic help us face a future of climate change with greater preparedness? The pandemic teaches us the importance of having a robust and resilient energy system to deal with risky situations by putting us in front of an extreme and little-known case. Climate change tends to increase the likelihood of extreme events. If the Brazilian energy system is rethought in the face of this logic, only decisions in the social and political sphere can tell. However, this is a lesson that, if incorporated into the Brazilian energy context, may result in a less uncertain future for the sector and ensures that those in vulnerable conditions suffer less from extreme changes.

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Acknowledgements Peyerl and Zacharias thank the current financial support of grant Process 2017/18208-8, 2018/26388-9 and 2020/02546-4, São Paulo Research Foundation (FAPESP). Mariana Ciotta thank especially Coordenação de Aperfeiçoamento Pessoal de Nível Superior (CAPES), for the scholarship. All the authors gratefully acknowledge support from SHELL Brazil and FAPESP through the Research Centre for Gas Innovation (RCGI) (FAPESP Proc. 2014/502794 and 2020/02546-4), hosted by the University of São Paulo, and the strategic importance of the support given by ANP. This work was partially financed by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior—Brasil (CAPES).

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