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What's watt?

01 December 2001

Is Brazil doing enough, fast enough, to solve the electricity crisis? By Julian Nichol, Senior Associate specialising in energy project finance at Clifford Chance Rogers & Wells, São Paulo, Brazil.

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Open the pages of a Brazilian broadsheet and it is rare nowadays not to find an article on the ?apagão? ? the Brazilian energy crisis. Although the demand centres of São Paulo and Rio de Janeiro are bearing the brunt, electricity rationing in Brazil is affecting everyone, from the micro-economic effects on companies and consumers, to the adverse macro-economic effects on the Brazilian economy.

The writing has been on the wall for some time. Brazil's 92% hydro-dependent electricity market has been seriously undermined by low precipitation over past years, while the inauguration of the Brazil-Bolivia natural gas pipeline in 1999 and increased natural gas-harvesting from Brazil's Campos Basin, failed to energise the much hoped development of gas-fired IPP's.

Brazil urgently needs more electrical capacity and the government is pinning its hopes on gas-fired thermoelectric projects to provide it under the guise of the ?PPT? ? the Thermoelectric Priority Programme. The PPT...

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