A couple of weeks ago, just before the “Carnival” festivities began, I traveled to Brazil to meet with our sister company, Cimcorp, and to meet with a private utility research and technology company called LACTEC and attend their conference on utility Smart Grid issues. The trip was very informative as the Smart Grid conference covered a wide range of topics—from the characteristics of Brazil’s electric grid, to the efforts by several of its utilities to test new technologies for improving electric service. Brazil is definitely in the “pilot stage” of the Smart Grid evolution as regulators are “targeting” to release their view on Smart Grid around April this year to guide the path forward.
Brazil’s Electric Grid
Brazil is the ninth largest energy consumer in the world and has nearly 115 gigawatts (GW) of generation capacity, making Brazil similar in size the Midwest Independent Transmission System Operator (MISO) region of the United States (majority of the states of Michigan, Wisconsin, Indiana, Illinois, Iowa, Minnesota, and parts of Missouri, North Dakota, South Dakota, Montana, and Kentucky). Hydroelectric power is the dominate form of generation, accounting for 74 percent of the electric supply in Brazil. Natural gas fired generation and electricity imports each account for about seven percent of the power supply and the remainder comes primarily from oil, biomass, and nuclear. Power generation ownership is a combination of government entities and private companies such as AES and GDF Suez. Electric transmission remains exclusively owned by the government, whereas 49 companies having a mix of government and private ownership are responsible for distribution.
With the Brazilian economy in high gear, electric demand is forecasted to grow at a compounded annual rate in the five to six percent range, causing the Brazilian National Energy Plan to call for the construction of 54 GW of new generation capacity by 2017. Large-scale hydro projects are underway; as the country has few practical options given its natural gas infrastructure is currently immature. One of the interesting drivers of Brazil’s peak demand is about a five hour window in the evening when people not only crank up air conditioners, but also shower with hot water provided by an electric heating element incorporated into the shower head. Because of this “spike” in demand, Brazil is examining an optional time-of-use rate, called a “white tariff,” that will have three different electricity prices during “peak days” to encourage conservation during these peak demand times.
The other major challenge facing Brazil is improving the system reliability. The average customer experiences around 18 hours of outages throughout a year and the goal is to drop that to under 10 hours. By contrast, in the United States, most utilities operate in the range of one to a few hours of interruptions in a year. With the World Cup coming in 2014 and the Olympics in 2016, there is high motivation to improve reliability of service.
A Smarter Grid
The Brazilian efforts for “smartening” their electric grid are in the pilot phase, with distribution utilities testing a variety of programs. The pilot sizes vary from thousands to tens of thousands customers. The five prong R$35 million (US$21 million) program by Light S.A., a company the distributes electricity in the state of Rio de Janeiro and provides services to approximately 3.8 million customers, serves as an example of the types of programs being investigated:
- L1 (Smart Grid Platform): The development of the Smart Grid infrastructure such as smart metering, communication, and interoperability.
- L2 (Underground Distribution): Transformer and cables monitoring, network diagnostic and reconfiguration.
- L3 (Overhead Distribution): Self healing grid concepts, management of outages, load shedding, and islanding.
- L4 (Demand Side Management): Prepayment and other tariffs, submetering.
- L5 (Renewable and EV): Load shifting, energy storage, micro grids, renewable, and EVs/hybrids.
In support of this pilot program, LATEC has developed smart meter, smart plugs, and remote displays.
The biggest issue facing the scaling up of Smart Grid activity in Brazil is regulatory policy. Unlike the United States, regulation of the electric utility industry occurs almost exclusively at the national level by an agency referred to as ANEEL (Agência Nacional de Energia Elétrica). An ANEEL representative stated the agency top priorities are reducing energy consumption, technical losses, operating costs, peak demand, and carbon dioxide emissions and improving reliability. He pointed out the challenges of the “one rule for all of Brazil” such as the average monthly electric consumption being 157 kWh, with the average consumption for individual states ranging from 68 to 225 kWh. As far as Smart Grid was concerned, the agency has a goal of releasing its position around April which drew the ire from some in the audience. Apparently the industry has long-awaited the formalization of a Smart Grid policy for Brazil and it has been delayed several times because a consensus view has been hard to reach.
Brazil is a hot bed for economic and electric energy growth. With millions of meters and the potential for billions of dollars in investment in the offing, there are many interested in propelling the Smart Grid effort forward as evidenced by this well-attended event with participants from around the globe. The key driver will be the setting of regulatory policy, which for those in the room, could not come soon enough.
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