Minister: Power sector must debate natgas regulations

Brazil's power sector must get involved in discussions over the new natural gas regulations that the government is preparing to unveil in 2005, mines and energy minister Dilma Rousseff said at a seminar Thursday. The government wants to create a secondary gas market where power plants can resell their gas if the national grid operator ONS does not call on them to supply power. This would replace current take-or-play contracts that have hurt power plants financially. Rousseff, however, reaffirmed that gas-fired generation would be complementary to hydroelectric power in the country's power matrix but that such plants could act as baseline supply to eliminate fluctuations created by droughts and reservoir depletion. "Perhaps the biggest challenge for the power sector will be to actively participate in the constitution of a new natural gas model and this discussion must start from the predominant role of hydropower in Brazil, not against it," she said. Brazil has explored some 24% of its hydroelectric potential, whereas developed countries have explored 70% or more, the minister said. "Hydropower is a fundamental source and is very competitive," she said. EPE The new energy policy company or EPE, currently being created by the government, will carry out studies to determine how much power gas-fired plants will supply in Brazil's power and fuel matrix. Rousseff said that EPE would also help draft hydro studies to identify specific hydropower generation projects that will be put out to tender in the future. Such broad basin studies aim to speed up environmental licensing procedures, she said.