key results of the brazil energy [r]evolution scenario
The growth in the demand for energy is based on three main factors: population growth, which determines the number of consumers; economic growth, for which gross domestic product (GDP) is the most commonly used indicator; and the amount of energy needed to produce a unit of GDP , measured by indicators of energy intensity and elasticity of demand for electricity.
For this report, two scenarios were developed. The first, called the reference or trend scenario, uses data from the EPE (Energy Research Company), an organization under the Ministry of Mines and Energy, which are used in the studies, “Ten Year Plan for Energy Expansion 2012-2021” and the “National Energy Assessment 2012.” The second, the Energy [R]evolution, was developed based on projections from researchers at USP, Coppe/UFRJ and premises from the European Renewable Energy Council, DLR (German Aerospace Agency) and Greenpeace.
Both are based on the same projections for growth in population, the economy and generation of energy for 2050.The difference between the two outlooks is that the reference scenario is based on trends in energy planning signaled by the Brazilian government for the coming decades. While the Energy [R]evolution is based on the implementation of new renewable energies and efforts to reduce the use of energy in electricity, transportation and industrial sectors.The creation of the scenarios is the result of the work, technical supervision and review of experts in electricity and transportation and economists.
5.1 growth projections
5.1.1 population growth
According to the Reference Scenario by the International Energy Agency (IEA)—which uses demographic growth projections from the United Nations—and projections from the Brazilian Institute of Geography and Statistics (IBGE), the population of Brazil will increase at the same rate as the Latin American average and slower than other developing regions, rising to 223 million inhabitants by 2050.The average annual growth will be 0.64%. This trend toward stable growth has positive consequences because it alleviates pressure on the demand for energy resources and the environment.
5.1.2 economic and population growth
Economic growth is determined by the production sectors of the domestic economy and is one of the main drivers in the demand for energy and electricity.The economic data were projected by Itaú/BBA , resulting in the following rates of growth shown in Table 5.1.
The amounts for the decade 2011 to 2020 are close to the average amounts for the previous decade—2001 to 2010—and higher than the average GDPs of the 1980s and 1990s, and project possible economic growth for the period.The estimates for the coming decades (2020, 2030 and 2040) are supported by current economic conditions, considering different factors that tend to maintain growth around 2.5%.
The factors include:
- The fact that Brazil has achieved rates close to full employment;
- The passing of the demographic bonus that drives economic growth due to a larger economically active population. In this way, the Brazilian population should stabilize by 2025;
- The need to maintain inflation at acceptable levels, which implies limiting GDP growth rates;
- The slow nature of investment to expand infrastructure and production capacity;
- Crisis and uncertainties on the international scene, impacting investment and industry, and the likelihood that this situation will continue for a number of years in developed countries;
- The competition for markets with countries whose labor costs are lower;
- Lack of confidence by investors due to regulatory uncertainties and the direction of economic and monetary policies by the government.