Carlos Roberto Silvestrin, CEO, COGEN, Brazil
Carlos Roberto Silvestrin, CEO of COGEN, talks about the benefits of implementing a cogeneration system in Brazil, explaining that not only is it simple and fast to implement, it reduces cost and use of resources as well, and in a resource constrained environment, this is a major key to success.
COGEN pursues the objective of enforcing competitiveness among the sector to ensure the best products and services in the market. Could you briefly describe how cogeneration works?
Cogeneration refers to a process where a single fuel source, for instance gas, will provide both electrical and thermal power at the same time. Cogeneration is considered a very efficient source, where lost heat from the production of electricity is recaptured and transformed into a viable source of energy such as thermal energy. Through this process less fuel needs to be consumed to produce the same amount of reliable energy.
Currently, Cogen is trying to implement different cogeneration solutions by establishing new energy centers inside Brazilian cities to reduce the extent of individual efforts to cool down, such as use of air conditioning systems, as well as to provide electricity. Basically, cogeneration machines installed in the basement of large buildings will provide cold water, heat, electricity and air conditioning to all the inhabitants within, without requiring individual, small-scale appliances. In countries like Japan, these energy centers are widespread, highly efficient, environmentally friendly and less costly than other solutions.
A similar method can be applied to industrial companies. For instance Coca-Cola could use a natural gas-fueled cogeneration system to produce electricity, cold water, steam, and could transform the gases left over from the production process (NO2 and CO2) to make their drinks. In practical numbers, this system has a utility value of 94 percent for every 100 units of energy used.
Promon Engenharia and Comgas, two Brazilian leading companies in engineering and gas distribution, have been helping us to develop the first cogeneration master plan in the metropolitan area of Sao Paulo, where new buildings are being constructed. Their collaboration should really accelerate the uptake of cogeneration systems in Brazilian cities.
Therefore, cogeneration has a lot of potential. We will need to change attitudes making our populace, industry, and government aware of the sustainable benefits cogeneration offers power system in Brazil.
What have been the most important milestones since Cogen was founded ten years ago?
Our main objective at Cogen has been to introduce cogeneration to our citizens, streamline our policy and regulation, and provide new opportunities to stakeholders, and further accurate research and study of cogeneration.
Cogen has a well-diversified portfolio of clients and therefore we work with producers of multiple sources of energy. For instance, biomass generated electricity did not exist in 2005. Today, 70 percent of sugar cane bagasse is produced in Sao Paulo state and provides electricity from biomass throughout the country.
Since 2005, our organization has been promoting biomass and our efforts have been rewarded by the sale of 6000 MW derived from this source at the last auction. In 2008, ethanol markets suffered from the global financial crisis and this reduced production. However, we are confident that new directives from the government will further develop this resource. Historically sugar mills had low-pressured boilers of around 30 bars whereas today we use high-pressured boilers of 100 bars, which can produce up to 200 MW. These initiatives are putting biomass on the right track and Brazil has the right conditions to make biomass a significant provider in our energy mix.
Cogeneration is the best alternative to thermal power plants, which today are supporting the hydropower sector. For example, if we use one million cubic meters of natural gas in a thermal power plant, its efficiency rate will revolve around 40 percent, whereas the same volume of natural gas used in a cogeneration system would have an efficiency rate of 60 to 80 percent. Cogeneration has clear benefits and is much quicker to implement—85 percent of projects are smaller than 10 MW. The technology base is growing rapidly as solutions are being created globally by companies like Caterpillar, Alstom and GE.
In the end, Cogen strives to promote biomass, natural gas, solar and biogas as reliable energy sources within cogeneration solutions making our energy system more efficient, competitive and sustainable.
Could you further develop on the benefits of cogeneration related to gas?
In the next five to ten years the prospects for new natural gas resources in Brazil are very promising. In fact emerging natural gas supplies are within 300 km of key industrial consumers. By reducing the distance of gas supply, we are seriously lowering transmission costs. Today, companies can be assured that their long-term PPAs will be guaranteed by the supply of gas from newly developed fields.
Furthermore, cogeneration does not need connection to pipeline networks; rather, it connects directly to the gas distribution grid. For this reason we do not need new investments in specific pipelines. The Sao Paulo region represents the main area for investments in the gas industry, yet only 10 percent of the city of Sao Paulo taps the gas distribution network. Comgas has been the main player here and is spreading quickly with significant opportunities for further growth. Significantly, alongside gas the consumption of electricity in Sao Paulo city is higher than in Argentina at 21,000 MW vs. 18,000 MW.
In the end, cogeneration is a great alternative especially in large cities like Sao Paulo. Not only is it simple and fast to implement, it reduces cost and use of resources.
In the next five years, what can we expect from cogeneration power using renewable sources and how much will Cogen have grown?
In the future, natural gas will grow in importance especially in metropolitan areas, particularly because large industrial companies, shopping centers and hotels will rely on large amounts of natural gas.
For biomass, the future is yet to be written and depends on incentives for the production of ethanol. Local production will remain a necessity for our country. The total potential of biomass offers more than 20,000 MW. Given that out of one ton of sugar cane, 60 percent is used for energy and the rest for leaves, this energy source should be supported in the future.
Cogen has been collaborating with Aneel providing a regulatory framework for the sale of solar products. Therefore, when private clients produce more energy than they consume, they will benefit from an energy credit of 36 months in which they can use this additional energy. We also hope to install solar panels on every petrol station with the aim to further promote local energy provision. Our country has constant sunlight exposure and in some areas reaches around 8 Kw/h per square meter—twice the solar power of panels located in Europe. Indeed, we should take advantage of our nation’s natural gifts.
Brazil ultimately is not a country that is divided into regions but rather electric areas. When we think about supply we must take into account distances between the base generators and use our main sources of energy, hydro and thermal, with complementary sources close to our areas of high demand. Today our planning is done after the result of energy auctions. For this reason if only wind is chosen from the auction, we face a poor result, as wind is not sufficient to provide base load energy. We need to change this system so before the results of energy auctions we make sure that the main energy sources are supported and that complementary sources provide ’top-up’ energy when required.