It is urgent that President Luiz Inácio Lula da Silva corrects the most serious mistake made by Congress in extending incentives for coal-fired power plants until 2040 by approving Temporary Measure No. 1,304. There is no technical, economic, social or environmental justification for maintaining subsidies. Coal does not meet the needs of Brazil’s electricity system, is expensive, drives up consumer bills even more, and is the source of the most greenhouse gas emissions. It is worrying that members of Congress are turning a deaf ear to all this evidence. Unless Lula uses her prerogatives to veto this debacle, the consequences will be dire.
There is no shortage of energy in Brazil. Over the past decade, installed power generation capacity has increased from 95.5GW to 236GW. This increase was almost entirely (97%) from renewable energy, primarily wind and solar energy. In 2015, Brazil was already attracting attention with its 74% renewable energy share in power generation. Currently, this percentage is 88%. In the US, the figure is 21%, in China 24% and in Europe 38%. Brazil has become a model for the world in the energy transition race to reduce gas emissions. There is no reason to pollute this trajectory by subsidizing coal.
- Miriam Leighton: Coal subsidies could cost Brazilians up to R$107 billion by 2040
Advances in alternative sources are not without problems. This segment is also an avid supporter of perks that consumers pay for. Wind and solar energy are putting pressure on system security and trust. This electricity is intermittent and relies on solar and wind power, so power outages and excess power generation require quick responses. Recognizing this, the coal lobby convinced Congress that thermal power plants, along with hydroelectric and gas-fired power plants, were part of the answer. I forgot that it takes 9 to 12 hours for a coal-fired power plant to start injecting energy into the grid. When they are ready, sunrise approaches. It’s not only expensive for the environment, but also for the consumer’s wallet.
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According to calculations by the Arayala International Institute, revealed in a blog published by journalist Miriam Leighton on GLOBO, coal subsidies amounted to about 11.5 billion reais between 2013 and 2024. Including maintenance until 2040, the total cost will be between 76 billion and 107.7 billion reais. The lowest value corresponds to a partial operation scenario, and the highest value corresponds to a complete operation. The costs of debt and environmental pollution are not included in this calculation. “We estimate that for Santa Catarina Island alone this cost will be R$20 billion, and in Rio Grande do Sul it will be an additional R$5 billion,” said John Uldig, energy transition manager at Alayala. The Brazilian Sustainable Carbon Association (ABCS) has questioned this calculation, but has not provided a satisfactory estimate. The whole world urgently needs to stop generating coal energy. Mr. Lula must not be afraid to veto the extension of incentives.
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