Thermo generation needs US$6.5bn for new plants

Brazil needs to invest US$6.5bn in new thermo generators to reduce the risk of power rationing, O Estado de S.Paulo reported, citing a recent study undertaken by consulting firm Tendencias for the Brazilian Association of Thermal Generators (Abraget). The investment should be completed by 2011 if the economy recovers from 2004 onwards. The aim is to increase the participation of gas-fired thermo generation in the country's energy matrix. Hydro generation currently provides about 85% of Brazil's power needs. Electricity consumption should rise 6% if the 3.5% GDP growth forecast for 2004 takes place, according to Ernesto Guedes Filho, one of the consultants responsible for the study. Such investment would reduce the risk of electricity shortages from the current 5% to 0.3%, thus increasing the time scale for possible shortages from 20 to 300 years. According to Abraget president, Xisto Vieira, investment in thermo generation will become more attractive as new gas reserves begin to be tapped and after renegotiations for the supply of Bolivian gas to Brazil are concluded, which could lead to a 15% reduction in the price of the fuel. Thermo generation should be "as cheap or cheaper" than hydro generation in the future, Vieira said.