The energy sector
HPC4E Project information
Energy needs worldwide will increase yearly until 2020 and far beyond. The International Energy Agency (IEA) 2014 report estimates that the global energy demand is set to grow by 37% by 2040.
Energy scarcity (or inefficient usage) can lead to higher prices, which will have a critical impact on the economy, as emphasized by the Energy Challenge in the Horizon 2020 work programme (the Energy Challenge is designed to support the transition to a reliable, sustainable and competitive energy system), and by the priorities of the Brazilian Ministry of Science and Technology. Different governmental programmes both in EU and Brazil have been started to promote and improve the efficient use of energy, e.g. EERA, ESFRI Energy and KIC Energy in EU and the “National Strategy on Science, Technology and Innovation 2012-2015” in Brazil.
The EU is the biggest foreign investor in Brazil with investments in many sectors of the Brazilian economy. Around 50% of the FDI (Foreign Direct Investment) flows received by Brazil during the last 5 years originated in the EU. Brazil is the largest economy of Latin America and its trade with the EU accounts for 34,4% of the EU's total trade with the Latin American region (2013). Regarding investments, Brazil holds 53% of the entire EU Investment stocks in Latin America (2012).
Brazil boasts large energy resources in all the energy sectors covered by this project: hydrocarbons, wind and biomass. Brazil is one of the largest potential wind energy producers of the world with an estimated potential wind power of 145 GW. In 2014, Brazil put more than 4 GW into operation. This amount generated is enough to supply 8.5 million homes. The Brazilian Wind Energy Association (Abeeolica) expectation for 2017 is an installed potential of 9 GW. With the objective of diversifying Brazil’s electricity production sources, wind energy was added as a focal subsector to the Alternative Energy Source Incentive Program (PROFINA) in 2004. The Brazilian federal government adopted further steps to encourage investment in wind energy. Wind energy is seen as an opportunity to further advance the economic development of the Northeast Region, which is already home to over 80% of the wind farms that have already been auctioned. The EU is a world leader in wind energy technologies. There is now 128 GW of installed wind power capacity in the EU. The wind power capacity installed in the EU by the end of 2014 would, in a normal wind year, produce 284 TWh, enough to cover 10.2% of the EU’s electricity consumption.
The EU Energy and Climate Change Package along with the Fuel Quality Directive have specified new regulations for 2020 on EU biofuels. A 20% share for renewable energy in the EU total energy mix is targeted, with a 45% of this renewable energy coming from heat and power production of biomass-derived fuels. The future policy for EU biofuels include a 7% cap on conventional biofuels made from feed and food feedstock and further support of the transition to second and third generation biofuels. In particular, from the 30.8 billion gallons of biofuel produced in 2013, 23 million gallons (73%) were ethanol. The US and Brazil dominate the ethanol market, cumulatively accounting for 87% of the global total. In 2013, Brazil produced 6.7 billion gallons representing around 30% of the total ethanol produced worldwide. In the case of biodiesel, Germany and Brazil are the main producers after the US, with 820 and 790 million gallons in 2013 respectively. While Brazil has a dominant role in biofuel production, the EU has a larger infrastructure on biogas production and use. The latest news and statistics on biogas production and use in Europe are available from the European Biogas Association website. In 2013, there were over 14.500 biogas plants in Europe with an installed capacity of 7,86 GW. In 2013, the first UK plant to inject biomethane into the gas grid entered into operation. A further 200 UK sites had received planning consents by early 2014, with growth driven by policies to divert organic waste from landfill sites in order to meet the EU Directives. Elsewhere in Europe, rapid expansion has also been driven by policy changes. For example, Italy alone saw its number of operational biogas plants increase from 521 to 1,264 within a year, driven primarily by a high feed-in tariff and support focussed on small-scale plants. Brazil had 24 biogas production plants operating in 2013 with capacity totalling 84 MW, then the potential grow of the Brazilian biogas sector is very high.
The hydrocarbon needs are also expected to rise in the next decades. However, “some $900 million per year in upstream oil and gas development is needed by the 2030s to meet the demand”. One of the best prospects to maintain such high production levels are the deep Cretaceous salts offshore Brazil, which have trapped oil below them for millennia. Studies believe the total volume of recoverable Brazilian pre-salt oil and gas reserves to be of over 50 billion barrels of oil equivalent (boe), about 4 times greater than the current Brazil national reserves. The output from the Santos and Campos basins should make Brazil, by the end of this year, surpass Mexico as the largest oil producer in Latin America with almost 3 millions of barrels produced per day. The Pre-salt is composed of oil deposits located under thick layers of salt, in areas in average 18,000 feet below the ocean’s surface. The pre-salt discoveries can potentially make Brazil the 6th largest oil producer in the world by 2035. The depth of most oil fields in Brazil imposes a technology challenge on the exploration and production activities, even beyond that of last decade’s Gulf of Mexico scenario. One of these challenges is the required deep imaging techniques for pre-salt oil that minimize the exploration risks.