Elsevier

Energy Policy

Volume 33, Issue 13, September 2005, Pages 1745-1752
Energy Policy

Electricity generation:: regulatory mechanisms to incentive renewable alternative energy sources in Brazil

https://doi.org/10.1016/j.enpol.2004.02.012Get rights and content

Abstract

The dissemination of renewable alternative energy sources for electricity generation has always being done through regulatory mechanisms, created and managed by the government of each country. Since these sources are more costly to generate, they have received incentives in response to worldwide environmental concerns, above all with regard to the reduction of CO2 emissions. In Brazil, the electricity generation from renewable alternative sources is experiencing a new phase of growth. Until a short time ago, environmental appeal was the strongest incentive to these sources in Brazil but it was insufficient to attain its objective. With the electricity crisis and the rationing imposed in 2001, another important factor gained awareness: the need to diversify energy sources. Within this context, this work has the objective of analyzing the regulatory mechanisms recently developed to stimulate electricity generation from renewable alternative energy sources in Brazil by following the experience of other countries such as the United States, United Kingdom and Germany.

Introduction

A large part of the experiences with renewable alternative sources in the world was developed in function of the application of specific mechanisms to stimulate their use. For our purposes in this work, renewable alternative energy sources should be understood as wind energy, solar photovoltaic and some forms of biomass, such as vegetable oils and residues of lumbering activities, among others. Unfortunately, one of the barriers to the dissemination of these sources is their elevated cost when compared to conventional sources. Due to the incipient development stage of some renewable alternative technologies and their production on a non-industrial scale, they are not yet attractive from a strictly economic point of view. However, if the traditional form of evaluation of energy costs considered the environmental costs of conventional sources and the advantages of renewable alternative sources to the environment, certainly this picture would be modified (Cavaliero and Silva, 2002).

One of the environmental advantages of renewable alternative sources is the potential reduction of the gas emissions responsible for the greenhouse effect in the atmosphere, especially CO2. This fact, in association with the intensive growth of the electricity market and the difficulties in meeting its needs satisfactorily through large power plants, has motivated the support of decentralized energy generation (also known as distributed generation). In this case, the renewable alternative energy sources again constitute an important option to attend growing needs.

Several countries are working along these lines to define policies to foment the renewable alternative sources of electricity generation in an effort to make them more competitive with conventional generation sources. For this reason, the objective of this work is to analyze the regulatory mechanisms in development in Brazil by following the experience of the United States, United Kingdom and Germany.

Section snippets

The experience of the United States, United Kingdom and Germany

A large part of the initiatives being taken to promote alternative renewable energy sources is concentrated on regulatory activity, which is the responsibility of the government, a tendency that has also been observed in Brazil through actions of the National Legislative Power and the National Electric Energy Agency (ANEEL, 2003).1 However, it is important to mention that these activities were

Brazil

The Brazilian electrical sector presents a peculiarity that distinguishes it from the majority of countries: the predominance of hydraulic energy in electricity generation. In worldwide terms, the primary energy sources most explored are fossil fuels, like oil, coal and gas, followed by hydroelectric and nuclear sources, in a distinct context from the Brazilian situation, in which fossil fuels occupy a secondary position. In 2001, the hydroelectric participation was 61 GW, corresponding to 82%

Conclusions

All of the countries mentioned above have been able to increase the participation of renewable alternative energy sources in the electricity generation, either by way of subsidies granted by the government, or by way of incentive mechanisms. Motivated by questions in common, such as the need to reduce energy dependence, emissions of greenhouse gases, etc., each country adopted different lines of incentive: the creation of a fund collected from a tax, the auctions of energy from renewable

Acknowledgements

To the Fundação de Amparo à Pesquisa do Estado de São PauloFAPESP (Foundation for the Support of Research in the State of São Paulo—FAPESP) for the financial support, without which this study could not have been realized.

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