Brazil is well positioned towards a low-carbon society, since 45% of its energy matrix come from sources that do not release CO2 (renewable sources and nuclear power), compared to less than 20% in average worldwide. However, electrical power prices are increasing fast, posing a major challenge to keep a clean power matrix in Brazil. Electricity tariffs in Brazil are among the highest in the world. If the urgent increase in electrical power supply in the country — by 2019 the demand in TWh should increase about 56%, considering an average annual growth rate of 5.1% — is accomplished through thermal plants with operations based on charcoal or fuel oil, which release high amounts of greenhouse gases (GHG), the favorable condition that currently prevails in the country may change.
Renewable energy can be considered innovation with great potential to contribute to sustainable development, given the numerous social and environmental benefits that usually result from their dissemination and use in transportation or power generation. Brazil counts with a variety of options of power generation to grow: hydro power, biomass, wind power, solar power, and ethanol and biodiesel in the transportation industry. Although less developed, there is also ocean energy and geothermal energy. But, as important as increasing the supply of renewable sources, is increasing efficiency in the consumption of the power generated either from renewable or non-renewable sources, in industries, civil construction and transportation.
Advances in the society towards energy efficiency in global scale can actually occur in less time than the transition to a more renewable global power matrix, which is not going to happen abruptly, since the dynamics that supports the current non-renewable energy model is hard to revert due to the following reasons: (i) great material and power consumption in developed countries, which is also somehow reflected in emerging countries, (ii) existing non-renewable energy infrastructure, planned for the long-term and for capital-intensive businesses, (iii) growing demand for power-related services worldwide, and (iv) population growth.
Limiting the analysis of the Brazilian scenario only to the supply of electrical power, the model adopted by the country in the 20th century, based on hydro power generation, accounts for a high level of renewable components: in 2008, 85.4% of power supply came from clean sources. When it comes to electric power supply, it is pretty clear there is a focus on hydro power, accounting for 80% of the generation, and on biomass, particularly from sugarcane bagasse in co-generation projects, rather than other forms of renewable sources, such as wind and solar power.
According to the 2010-2019 Decennial Plan for Electric Power Expansion, renewable sources are expected to drop to 82.7% of the electric power supply, and large hydro power plants will be kept as main sources, but having lower relevance – expected to account for about 70% of the power supply in the country by 2019. It is worth mentioning the expected growth in the installed capacity of small hydroelectric plants (SHPs) in the country (4.2%), biomass (5.1%) and wind power (3.6%), which will account for 12.9% in 2019, compared to 9.7% in 2010. Those three sources were elected by the Program for Incentive to Alternative Power Sources (PROINFA), an initiative launched in 2002 by the Ministry of Mining and Energy to foster alternate technologies, excluding other types of renewable sources, such as solar power.