Marcelo Junqueira

15.1. THE CONTEXT OF SANTA ELISA’S BAGASSE COGENERATION PROJECT

The demand for electricity in Brazil is growing fast, requiring new and cost-efficient ways to meet the country’s energy needs. Brazil’s predominant reliance on hydropower (80 per cent of the country’s total electricity use in 2002) is expected to decrease as diversification is being pursued. The competitiveness of large hydropower falls in face of relatively high construction and transmission costs. In addition, about half of Brazil’s remaining hydro potential is located in the Amazon area, where many social and environmental constraints hinder further development.

In response to that, Brazilian authorities have developed a thermoelectric program. The Brazilian Ten-year Expansion Plan for 1999-20081 counts on increased involvement of private capital in the electricity sector for the construction of new thermal plants. The thermoelectric expansion plan is based on the use of natural gas, mineral coal and, in the case of isolated electricity systems, petroleum derivatives. In the South and Southeast regions (where Companhia Energetica Santa Elisa is located) only natural gas will be used.

Within the above scenario, the amount of greenhouse gas emissions are expected to increase in Brazil. Meanwhile, the Kyoto Protocol and, in particular, the Clean Development Mechanism (CDM) provides a useful financial tool to foster the implementation of new solutions to supply the country’s energy demand, while also avoiding the increase of greenhouse gas emissions.

This chapter presents an actual case of mitigation of greenhouse gas emissions through the provision of renewable energy utilising biomass residues (bagasse) from the sugar and ethanol production at Companhia Energetica Santa Elisa. Santa Elisa is the third largest sugar producer in Brazil and also the third largest electricity — producing sugar mill through cogeneration[19] [20]. The project results from Santa Elisa’s

decision to expand its cogeneration system to increase efficiency and aggregate value to the bagasse originated from its sugar milling process. Santa Elisa intends to validate its investment within the CDM. An agreement has already been signed with the Swedish government concerning the certificates that will accrue from the project.

The Brazilian Inter-Ministerial Commission on Global Climate Change, which is responsible for defining national eligibility criteria for the application of CDM in the country, has determined that renewable energy cogeneration projects meet the sustainable development criteria sought by the Brazilian government. In this context, both sugarcane-based products and electricity provision are considered essential for the sustainable development of Brazil. Thus, the Santa Elisa project has received official support.