Blackout in Brazil / by Mark Langevin

In the midst of a constructive policy debate over energy policy, Brazil endured several hours of electricity outage on October 25 and 26th.   Reuters reports,

“Officials said a fire in a substation in the Amazon knocked out the whole northeastern electricity grid in the region's worst blackout since 2001. The outage, which follows two other big blackouts in Brazil in as many months, lasted up to four hours in some places and brought major industries to a halt.”

Brazil’s Ministry of Mines and Energy concluded that the outage was caused by the failure of the Second Circuit-Imperatriz of the Colinas 500 kilowatt transmission line owned by TAESA, a private firm controlled by CEMIG.  The system did not effectively back up the failure leading to the complete shutoff of all transmission lines connected to Colinas.

This most recent blackout calls into question whether Brazil’s policies and programs to expand power generation and transmission are sufficient to meet mounting demand, both industrial and residential, in the coming years.

“Brazil went through a so-called "blackout crisis" in 2001 and 2002, when a drought limited the output of hydroelectric dams. In response, the government rationed electricity in certain regions, severely crimping economic growth. While Brazil has invested heavily in electricity generation since then, it still has a long way to go. The government plans to build as many as 48 new hydroelectric plants by 2020 to keep up with the energy demands of rapid economic growth.”

Yet, in the past several years a growing current of opposition to the government’s plans to harness the untapped hydropower of the Amazon basin, including the Belo Monte dam project, has certainly slowed the growth of power generation and impacted decision making, including the calculations of private investors and elected officials.

With this most recent outage, Brazil is likely to revisit the national power generation policy and look for opportunities to accelerate expansionary activities, including the planned hydropower projects in the Amazon. Opponents to dam construction will be hard pressed to offer viable alternatives in the short run, but could convince policymakers to make greater investments in alternatives such as solar and wind in the coming years.   This debate revolves around the difficult effort to stimulate economic and social development through greater access to electricity and all the creature comforts that require increasing amounts of power. This debate impacts every sector and interest in Brazil, and will likely shape President Dilma’s own efforts to seek re-election in two years.