Hydro power to remain central to Eletrobras' portfolio

Hydro power will continue to play an important role in Eletrobras’ portfolio, while its proportion of thermoelectric generation is expected to decline in the coming years, a spokesperson for the Brazilian holding company told BNamericas. 

Hydroelectricity currently accounts for over 90% of the company's total installed generation capacity (43GW), while thermal sources produce approximately 3%. 

In December, Eletrobras, which was privatized last year, signed an MOU with R20 – a specialist in sustainable infrastructure projects – Andritz Hydro Brasil and the Stone Court Capital fund to assess the feasibility of creating an investment instrument to modernize hydro plants that had their concession contracts renewed after the privatization.  

A resolution from the mines and energy (MME) published in 2021 established that the concessions for 22 plants would be renewed, outlining modernization and repowering of the plants, as well as the possibility of hybridizing them, with a planning deadline of three years. 

“It’s expected that part of the capex will continue to be directed to renewable energy, given the characteristics of Eletrobras' installed capacity and track record. However, investments in other sources and renewable technologies and the respective amounts still depend on the conclusion of the revision of our strategic planning,” the spokesperson said.

Meanwhile, the reduction of thermal power in Eletrobras’ portfolio will take place either by decommissioning some units or the expansion of other energy sources. 

By the third quarter of 2022, Eletrobras had 35 hydro plants, nine natural gas, oil, and coal-fired thermoelectric units, 20 wind power facilities and one solar plant. Together, they generated 137,482GWh in the period. 

New power generation undertakings that are under construction, such as the Angra 3 nuclear plant, the Santa Cruz gas-fired plant, the Coxilha Negra wind farm and the Cachoeira Branca mini-hydro plant, will add almost 1GW to Eletrobras' installed capacity by 2030. 

TRANSMISSION 

Regarding power transmission, Eletrobras has more than 74,000km of lines, which represent about half of Brazil’s total power grid. 

The country's transmission system enables the optimization of energy transfer between the various regions, considering seasonality, dry and wet periods, and diversity of demand, among other factors.

World Bank studies indicate that there are savings of more than 20% on electricity rates as a result of the country's full system interconnection via the 130,000km grid.

“Without a transmission grid of this magnitude, we'd be using a much larger quantity of fossil sources, which can be installed close to the loads,” the spokesperson said. 

ESG

With an eye on the ESG agenda, Eletrobras has 24 plants able to issue international renewable energy certificates (I-REC), which ensure that market facilitators adhere to best practices and good governance principles.

Between 2021 and 2022, Eletrobras had a turnover of more than 5mn reais (US$1mn) with I-REC transactions. 

In 2021, its subsidiary Furnas launched its own RECFY certification program, initially backed by two of the company's power plants, with a total capacity of 809MW and revenues of more than 2.5mn reais between that year and 2022, including auctions and bilateral transactions. 

The average unit price of RECs in Brazil (1 REC = 1MWh injected into the national grid) varies between 0.50 reais to 5 reais, and solar and wind sources, or those with complementary ecolabels, are currently those most valued by consumer agents.

Meanwhile, Eletrobras is studying the potential issue of carbon credits in the scopes of the GHG Protocol, from its undertakings, from reforestation projects and from emission reduction projects. 

The company's portfolio includes credits from hydroelectric special purpose plants, such as the Foz do Chapecó, Jirau and Santo Antônio hydro units, which have certified reductions of millions of tons of CO2/year. 

“For new generation projects, this economic opportunity must still be modeled, taking into account the voluntary markets and the future regulated markets,” the Eletrobras representative said.