Brazil's Green Energy Revolution

With nearly half of all its energy produced from renewable sources, Brazil has one of the world’s cleanest energy matrixes. Sugarcane stands out as the country’s second most utilized source of green energy, slightly behind hydroelectricity. Today, sugarcane is processed to generate food, feed and energy in modern integrated bio-refineries that produce sugar, alcohol, fuel ethanol, bioelectricity and in the near future, bioplastics.

Preliminary data shows that ethanol production in the South-Central region of Brazil reached 19.9 billion litres in the 2007/08 sugarcane harvest, 11% more than Brazil’s total output for the previous year. As in other years, Brazil’s domestic market absorbed the major portion of the ethanol produced, and projections for 2008 are promising. Thirty new plants should go on stream this year, with total investments expected to reach US$ 33 billion by 2012.

The success of Brazil’s ethanol program is driven by two main factors: mandatory blending and the success of Flex-Fuel Vehicles (FFVs). All gasoline sold is blended with 25% ethanol, and almost nine of every ten new cars sold in the Brazilian market are FFVs. By the end of 2008, 26% of Brazil’s light vehicle fleet (more than six million vehicles) will be FFVs, with the figure expected to reach 50% in 2012 and 65% in 2015. The auto industry has invested heavily in Flex technology and now offers more than 63 models at the same price as straight gasoline-powered versions.

The use of fuel ethanol is not limited to light vehicles. By mid-2008, a fleet of 17 buses running on ethanol will be launched in São Paulo as a pilot project. The environmental benefits from the introduction of biofuels in public transportation can be substantial. It’s estimated that replacing 1,000 diesel buses with ethanol-powered models would reduce CO2 emissions by 96,000 tons per year, which is equivalent to the emissions of 18,000 gasoline cars. Some motorcycles and small airplanes made in Brazil also run on ethanol.

Looking at the international market, the Brazilian Sugarcane Industry Association (UNICA) welcomes recent legislative steps announced by the United States and the European Union. The new Renewable Fuels Standard adopted last December and the proposed directive on renewable energy sources submitted by the European Commission on January 23rd will consolidate the ethanol market in these two regions, opening potential opportunities for imports from Brazil.

Although 2007/08 export volumes originating in South-Central Brazil, the country’s main ethanol-producing region, are expected to be similar to the year before, the destination of Brazilian ethanol has become substantially diversified. Sales to the US have decreased as a result of increased domestic production, while exports to the European Union jumped from 230 million litres in 2006 to almost 800 million litres in 2007.

Bioelectricity: the new frontier
Ethanol is not the only energy output obtained from sugarcane. Bioelectricity is also produced by burning the bagasse that remains after sugarcane is processed. However, much more energy could be produced if all the bagasse, as well as the straw removed from sugarcane stalks, were utilized. Because they are not, approximately two thirds of the plant’s energy potential is still underused. The composition of sugarcane is one-third juice, one-third bagasse and one-third straw. Until recently, the juice was being used to produce sugar and ethanol while only part of the bagasse was burned to generate bioelectricity. With technology improvements, ethanol will soon be produced also from the bagasse and straw though hydrolysis, both of which will also be used to generate additional bioelectricity.

In many sugarcane plantations, the straw is burned before the cane is cut to facilitate the harvest. This is a source of pollution for rural workers as well as towns and cities in the vicinity of sugarcane fields. To remedy this inconvenience, many sugar mills have subscribed to the “Green Protocol” sponsored by the Government of São Paulo state and UNICA. The protocol calls for the eradication of straw burnings by 2014 in areas where mechanized harvesting methods can be introduced and by 2017 where mechanized harvest is currently not feasible. With the harvest fully mechanized, the straw will no longer be wasted. Instead, it will be used in high efficiency boilers, along with the bagasse, allowing a growing number of sugar and ethanol plants to become bioelectricity providers to the national grid.

Today, electricity supplied by sugar and ethanol plants totals 1,800 megawatts, a modest 3% of Brazil’s overall needs. With increased use of biomass from sugarcane, it is estimated that it would be feasible to expand the use of bioelectricity to 15 percent of the country’s needs by 2015, or 11,500 megawatts. Bioenergy from sugarcane is a particularly relevant option for Brazil because the harvesting period, when more biomass is available, occurs during the dry season, when water levels are lower and hydroelectric facilities can produce less electricity. This makes the two sources of electricity complementary.

Obviously, this technological revolution based on sugarcane demands significant investments, especially to retrofit older plants with new high-pressure boilers. Still, the industry is strongly committed to expanding this new and potentially very profitable market. The sugarcane industry and the federal government are currently discussing conditions under which plants will be connected to the grids and prices to be paid for surplus electricity they produce.

A date has been set, in late April, for the first auction dedicated to bioelectricity, which should confirm its status as one of the most significant frontiers still to be explored in Brazil’s sugar and ethanol industry – one that can lead to a revolution similar in magnitude to that brought about by ethanol. Bioelectricity can strongly reduce the need to build new hydroelectric projects in environmentally sensitive regions, while helping to do away with costly and potentially harmful options like expanding nuclear power or gas, fuel oil and coal-fired thermoelectric facilities.