Brazil Turning to Sugarcane Bagasse Power Generation to Reduce its Dependence on Hydropower

Sep 11, 2008 - Business Wire

SAO PAULO, Brazil--(Business Wire)-- Brazil is increasingly turning to alternative power generation fuels such as biomass in order to increase electricity supply and reduce its dependence on hydropower. Biomass power represents around 4.1 percent of the total installed capacity in Brazil at present and most biomass cogeneration is based on sugarcane bagasse. At present, sugarcane bagasse cogeneration accounts for 3.03 percent of the total Brazilian energy matrix.

New analysis from Frost & Sullivan (http://www.energy.frost.com), Sugarcane Bagasse for Power Generation in Brazilian Markets, reveals that the market reach 3.0 GW in 2007 and expects this to reach 12.2 GW in 2014.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the sugarcane bagasse for power generation in Brazilian markets, then send an e-mail to Jose Maria Jantus, Corporate Communications, at jose.jantus@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country. Upon receipt of the above information, an overview will be sent to you by e-mail.

The Brazilian sugar and alcohol sector envisages to market electricity surplus to the national grid. In order to produce marketable amounts of electricity, the sector is expected to invest in new technologies, including cogeneration equipment. There is a clear trend toward the implementation of boilers with higher steam-production capacity. New boilers and steam turbines with higher capacity and efficiency would substantially increase the electricity surplus the plants would be able to sell.

"The National Bank for Economic and Social Development (BNDES) has created several credit lines to finance power plants that require new equipment and upgrade in order to produce excess energy that can be sold to the national grid," notes Julio Campos, Industry Analyst at Frost & Sullivan. "At present, there are 47 projects under BNDES and these have the potential to contribute 1.4 GW of cogenerated electricity to the national grid in 2008 and 2009."

However, unattractive prices are discouraging companies looking to sell their excess electricity to the national grid. Brazilian sugar and alcohol plants produce around 95 percent of their electricity needs, purchasing the remaining 5 percent from national-grade transmission and distribution (GT&D) companies. Plants claim that the prices they pay to those companies for this additional power are several times higher than the prices paid by GT&Ds for the plants' electricity surplus.

"Another significant restraint for the cogeneration market is the lack of connection to the electric grid," says Campos. "In addressing this, many sugarcane cogeneration-related associations such as Associacao Paulista de Cogeracao de Energia (COGEN-SP-Paulista Association of Cogeneration) and ANEEL are working on building generation distributive center units that will collectively transmit electricity cogenerated in the mills and input it into the grid."

Structured tax and financial policies would serve as a driver for the expansion of sugarcane bagasse cogeneration technologies. Government and related regulatory agencies should develop clear planning and regulatory structures in order to boost cogeneration capacities in sugar mills. This includes the easy and efficient connection to the grid, and the establishment of fair prices to pay back the high investments of the mills.

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