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Hermes Chipp, General Director, ONS, Brazil

Hermes Chipp, General Director of ONS, discusses the future of Brazil’s sustainable energy sources, and the trends he expects to see over the coming years that will assist the country in reaching it’s enormous energy distribution targets.

You first joined ONS in 1998 as operations planning director and you are currently the general director of one of Brazil’s major institutions in the energy sector. What were the reasons behind joining ONS and what does this entity represent for the sector? 

Before joining ONS, I dedicated most of my career to Eletrobras, Brazil’s largest electric utility company. In 1995, I was designated to be one of Eletrobras’ representatives in the process of restructuring the electricity sector, at a time when ANEEL, Brazil’s National Electric Energy Agency, and ONS were to be created. Specifically, I coordinated the restructuring of commercial rules and the restructuring of the transmission business, which were both affecting the sustainability of the power sector. When this process finished, I was asked to join ONS in 1998 as operations planning director and finally became the general director of ONS in 2005.

ONS is a grid operator, which does not have the property of any asset in the system. It is legally constituted as a non-profit private civil association. Our associate members are the generators, transmitters, distributors and free consumers. As a key actor for the energy sector, we must be always independent, impartial and transparent. Our decisions must always aim at the best solution for society, concerning both costs and safety in power supply.

What developments do you see among the sources at hand—hydro, wind, solar, biomass, coal, gas and nuclear—and what should be prioritized to ensure the sustainability of Brazil’s energy matrix?

I prefer the expression electricity matrix instead of energy matrix, because we are talking specifically about the variety of sources used to produce electricity in Brazil. Indeed, we have a mixed electricity matrix, with a very high percentage of renewable sources. However, since we are still an emerging country, our needs for additional energy rise four or five percent annually.

Hydroelectricity is the prevailing source for electric power in our country, representing today 77.9 percent of the installed capacity. We still have a large hydroelectric potential to be explored and, in the next five years, almost 18,000 MW of hydro plants will be added to the system. But the share of hydro in the total installed capacity will decrease to 73.3 percent in five years, due to the growth of other energy sources. Even with this significant growth, most of the new plants will be run-of-river plants, since it has become much more difficult to plan and to build hydro plants with large reservoirs to regulate their production. This is mainly because of difficulties associated to environmental licensing, land ownership rights and opposition from different segments of society.

If no investments are made in hydro reservoirs to increase the system regulating capacity, the role of thermal generation to firm energy production becomes vital. Today, conventional thermal generation represents 16.3 percent of the installed capacity of the Brazilian interconnected power system. In the next five years, this figure is expected to reach 16.9 percent, with nuclear, gas, coal and oil thermal plants adding up to almost 25,000 MW. This indicates that thermal power is not being strongly considered in current planning studies conducted by EPE, Brazil’s Energy Research Company.

But once the hydro expansion does not include large reservoir-based hydro projects, most of the hydro projects developed in the Amazon region are run-of-river plants or have small reservoirs, I believe that more thermal plants will be necessary to satisfy the increasing demand for energy.

Concerning nuclear, it represents a viable future for our country, as its technology is very secure. If we take for instance our experience with Angra II nuclear power plant, its energy performance is without a doubt much better than any other existing source today. Of course, with current events affecting nuclear energy around the world, nuclear power in Brazil remains undefined for now, but surely represents a solution for the future.

Non-conventional renewable sources are also playing an important role in our future expansion. The share of wind generation will grow from 1.5 percent to 5.8 percent in the next five years, with the addition of 6,700 MW. Besides this, the share of sugarcane biomass production will remain stable around 4 percent, with the addition of 900 MW until 2017. However, the non-exploited potential of these sources is much higher.

We are following the development of solar energy in the world. Brazil has a huge potential, with solar radiation levels comparable to the Middle East. For the first time solar projects will be included in the next auction for future energy. If the prices continue to decrease in the near future, these projects could play an important role in the electricity matrix.

Nevertheless, none of the non-conventional renewable sources alone will be the solution to cope with the increasing energy demand requirements of the country. To resolve this issue we strongly recommend having energy auctions by source and region. A regional and thermal auction would postpone the need to expand transmission lines, produce gains of predictability, energy efficiency and guarantee the availability of energy. Even though this process has yet to happen, we are seeing a great deal of improvements.

Of course Brazil is already a renewable-focused country, but to continue to be a green giant we must decide on which energy mix will provide us the best solution for energy sustainability. This is our endeavor.

A country’s transmission network for electricity represents the backbone of energy supply and sustainability. What are your views on the Brazilian transmission network?

In Brazil, the transmission grid doesn’t simply connects generation sites to load centers, but it is a fundamental tool to take advantage of the diversity of hydrological behavior of river basins, since the transmission of large blocks of energy between river basins and regions allows achieving optimization in the use of the available hydro resources.

The expansion of the new hydro projects in the Amazon region brought the challenge of transferring their energy production for around 2,500 kilometers to the major load centers, located in the Southeast and Northeast of Brazil. Therefore, HVDC technology came out as a natural solution. Our engineering capabilities, technology used and experience in high-voltage transmission lines make Brazil very competitive in this domain.

In the recent years, the country achieved important results in the integration of the electric power systems. The states of Acre and Rondônia were integrated into the grid in 2009 and this year we will complete the interconnection of Amazonas and Amapá. We expect to integrate the last remaining state, Roraima, by 2016.

With Brazil’s national grid fully connected and providing energy throughout the country, the objective is to reach the highest efficiency rates and innovate along these lines. What do you feel is the status of technological developments in the energy sector?

Due to the unique characteristics of the Brazilian power system, it was necessary to develop our own solutions to manage the energy resources. The Electric Power Research Center, CEPEL, together with our major universities have been playing an important role in the development of tools to achieve optimization.

The Brazilian electric power sector follows closely the international development of technologies for control centers and grid managements. Many fruitful national and international partnerships have helped us to reach high-level standards in power system operation.

Controlling the operations of generation and transmission companies is a very challenging task. How has ONS been successful in this initiative and what are the measures to be taken to assist companies in these segments?

ONS is pleased to be a member of the GO 15 “Reliable and Sustainable Power Grids” regrouping the major power grid operators across the globe, with more to come. The aim of this special association is to discuss the necessary transition and adaptation of power systems to make power grids more efficient through new technologies and to discuss the future of energy markets. These operators combined represent more than 70 percent of the world’s electricity demand and are discussing above all, which reforms need to happen to increase the participation of renewable energies for the sustainability of their countries energy models.

What we are observing today is that operators who own their grid have total control of what their equipment achieves. Here in Brazil this is not the situation. Nowadays we rely on 25 grid procedures and our objective is always to build on and improve these procedures relentlessly, in order to help us control and coordinate our complex grid.

Collaboration is a must in any industry and must be embraced to share experiences and even assets. This is exactly what GO 15 is about. These representatives are CEOs with clear ideas about the necessary reforms that need to be taken to improve power grid reliability across the globe. Therefore bilateral agreements have been signed, and currently we are under an agreement process with Spain for wind technology transfer in return for our experience for HVDC transmission lines.

Overall, what would you say are ONS’ priorities and ambitions for the future?

Our first priority is associated with the accomplishment of our institutional mission, which is to guarantee the economic and reliable supply of electricity to all consumers, taking into account the increasing complexity of the power system operation due to the diversity of energy resources and the continental size of the transmission grid.

Secondly, our ambition is to be up to date with new technological developments in power system operation, such as smart grids, demand management, solar panels and electrical vehicles. All these issues will very soon become part of our day-to-day reality.

To read more interviews and articles on Brazil, and to download the latest free report on the country, click here.



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