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Risk of blackout crisis and electric power rationing: back to the future?

If Robert Zemeckis filmed 'Back to the Future' in Brazil, shortages of water and power would be recurring themes in the plot. Water is an essential resource for the life of all living beings. Nonetheless, as usual with most natural resources, it only gets the attention of the population and public policy formulators when the volume offered is no longer suitable, whether in excess or lacking. In the year of 2021, in addition to the issues faced globally owing to the pandemic, we may refer to the old saying: when it rains, it pours.


There has been lack of rain particularly in the farmable regions of the Southeast, South and Midwest, remaining at a low average in a critical period for a significant part of the farm crops, with hence a negative effect on production. That should restrict the generation of exportable surplus, which has been an important resource to mitigate the many economic problems accumulated by Brazil since the beginning of the pandemic.


The impact of "conjunctural" (or structural?) water shortage is not limited to lower production levels of agriculture. In fact, the expected impacts should be much broader, and for several reasons. Shortage of agro-industrial products bears the risk of supply shortages and an increase in the price of foods. In addition, the difficulty in generating exportable products should reduce the flow of international reserves, further reducing our currency's purchase power. The combination of those aspects may lead to a generalized rise in prices or, more specifically, to inflation—currently at 8.12% per year (IPCA), a value that had not been reached since 2016—, which may only be cured with the bitter remedies that are well known by those who experienced the phenomena in past decades.


In the short-term, the bill will once again be paid by the population in a regressive manner, i.e. heavier on those with lower income. Adding up to the aforementioned problems is the increase in the electricity bill, at a time when many are working home-office, which forces them to assume the relative cost of power consumption required to work. The result: those who still have a salary, i.e. not unemployed, will find it harder to make ends meet at the end of the month, considering the higher expenses with electricity, water and food consumption. A near perfect recipe for inflation to explode, if not for the loss of the population's spending power. In that case, the bitter remedy may also assume a preventive nature. 


In this year of 2021, therefore, concerns with the Covid-19 impacts have been adding to other concerns with events that may build up and cause the return of inflation, a trend towards higher income disparity, without mentioning the already cited risks with a blackout crisis, after a little over twenty years since the first occurrence of such event in the country. Among the macabre triplet, we shall focus on the latter, which demands reflection from both the population and public administrators. For being a public asset, the government is responsible for regulating its access, ensuring multiple and sustainable use in benefit of current and future generations. Is it necessary to assess which public policies have established targets to solve or at least mitigate problems of such nature in our country. Which governments have presented important measures to ensure the supply of water and electric power—for different purposes—and have in fact made a difference? Is the blackout crisis, in fact, a conjunctural problem? Or it is rather a structural one?


Records show that the first broad blackout crisis took place on Wednesday afternoon, April 18,1984, when a major blackout  affected 12 million people in six states of the Midsouth region of Brazil, extending through the night. It was the first national blackout after the interconnection of the South-Southeast network and the largest one in the country until being topped, in the following year, by the blackout of 1985, and so on. The reason at the time was that the dimension of the demand had not been properly anticipated, which meant a rationing became necessary as of 2001 (exactly 10 years ago), to reduce the consumption of energy in the country by 20%, announced by former president Fernando Henrique Cardoso.


Since then, not much water under the bridge, we remain at the will of rains to ensure the economy is not interrupted all of a sudden, curbing the perspectives of resuming higher levels of production and employment.


The current management of water resources in Brazil is based on the National Water Resources Policy from 1997, the so-called Law of Waters. In 2019, 22 years after its publication, 233 water basin committees were in operation in the country, 240 plans of basins had already been developed with the charging for the use of water resources (ANA; 2021). The power matrix increased the transmission potential, which was 75,000 MW in 2001, and grew to 170,071 MW in 2020, 75% of which from renewable sources (ANEEL;2020).


The most recent blackout was in November 2020, in Amapá, with a rationing period of 22 days.


Thus, despite all advancements with research and technology, the Brazilian economy is, once again, subject to an elevated risk of blackout. Brazil is one of the few countries where the potential to expand the generation of electricity from alternative sources may still be considered high, including biomass, photovoltaic, wind and hydroelectric. The potential water and power crisis, nonetheless, has been a typical component in the country's many blackout events, which suggests the presence of a recurring problem of omission within the public (and private) administration of natural resources, whose planning fails to encompass climate change.


Generally speaking, the insecurity related to the availability of the minimum amount of water required derives from the following aspects: physical scarcity (aggravated by climate patterns); unsuitable administration (involving the regulatory background); and infrastructure issues. The evidence leads to concluding that the advancement in source generation and diversification, without forgetting hydroelectric power plants, is much needed.


There are arguments that the problem owes to the environmental policy and to the advancement of the agriculture frontier. However, there are many possibilities for generating "clean" electricity with the reuse of biomass, such as sugarcane chaff, and at relatively low costs both in production and distribution. Also, initiatives of waste biodigestion are increasingly available due to advancements achieved by science, when compared to alternatives such as wind energy.


According to the Empresa de Pesquisa Energética, in 2020 the increment of the wind and solar sources in generating electric energy and the higher offer of sugarcane biomass and biodiesel contributed so the Brazilian energy matrix could be maintained at a much higher renewable level than that observed in the rest of the world. The participation of renewable sources in the Brazilian electric matrix reached 84.8%, and in the general energy matrix, 48.4% in 2020 (while the rest of the world had merely 13.8%, and in rich countries, 11%) [1].


Still, we are not looking good, and due to the lack of public policies. Owing to the lack of planning and incentives, Germany and China today have more solar energy than Brazil, albeit having much fewer sunny days. Winds around here are also abundant, but the 'other renewable sources' correspond to merely 7.7% (sugarcane biomass, 19.1%, hydraulic, 12.6%, firewood and vegetal coal, 8.9%). And among those other renewable sources, solar has only 4.2%, and wind, 22.1% (biodiesel with 23.8 percent and leaching - biodigestion of waste slurry, at 43.1% [2]).


Also, it is an attestation of the public administration's inefficiency allowing that after 10 years there is still around 50% of losses in the electric power centers (47.7% in 2011 and 55.8% in 2020) and 27.6% [3] of losses in power transmission and distribution. More light should be shed on the design of instruments to intervene in the economic realm focused on efficiency, such as pricing mechanisms, incentives to the adoption of better technologies, and establishing production units closer to consumption areas.


As an example, each Brazilian discards 170kg of organic matter every year[4]; if biodigestion of those materials were promoted at local level, the blackout risk would be quite remote. Much like the DeLorean in "Back to the Future" that becomes fueled by waste, our energy policy needs much improvement before taking off. 


[1] EPE, Empresa de Pesquisa Energética, BEN 2021 | Balanço Energético Nacional Relatório Síntese | ano base 2020, 2021.

[2] Ibid.

[3] Ibid.

[4] ABRELPE, Associação Brasileira de Empresas de Limpeza Pública e Resíduos Especiais, Panorama 2020 – Abrelpe.a

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