POWER November 2014 - 9

the only test facility adjacent to a full-scale
CCS project. SaskPower says it will offer the
facility and technical support to companies
testing post-combustion capture technologies.
Initial research at the CCTF will focus on
energy demand, collection efficiency, longterm
stability, operation, maintenance, and
reliability of amine-based post-combustion
capture technologies, but the facility has
been designed to accommodate other processes
as well.
Estevan is known as the province's Energy
Capital for its oil, natural gas, and
coal resources. Project developers say
Saskatchewan has 300 years of coal reserves.
By investing in CCS technology
development and research, the province
hopes to be able to supply affordable
power long into the future while advancing
cleaner coal technology adoption
around the world.
-Gail Reitenbach, PhD
Drought Stresses Brazilian
Electricity Market
A lack of rainfall is hitting the power industry
especially hard in parts of Brazil.
According to the U.S. Energy Information
Administration (EIA), the country depends
on hydroelectricity for more than 75% of
its electric power supply (Figure 2). But
with reservoir levels at historic lows in
some places, more electricity has been
required from fossil-fueled power plants.
The resulting supply and demand imbalance
has forced spot market prices to increase
dramatically.
The EIA noted earlier this year that
Brazil is experiencing its worst drought
in 40 years, saying that the lack of water
has contributed to electricity blackouts in
many parts of the country. Other sources
have even suggested that São Paulo, the
largest city in Brazil, is at risk of running
out of drinking water in November, if rationing
is not implemented.
According to Sabesp (the company responsible
for water services in São Paulo),
its Cantareira system-the largest of
six reservoirs that supply water to São
Paulo-was down to 7.4% of its capacity
near the end of September and 5.5%
by Oct. 8. Rainfall for the month had totaled
less than half of its historical average.
The Alto Tietê reservoir hadn't fared
much better with its level at 11.3% by
Oct. 8. Although the other four reservoirs
had higher percentages, none of them was
near 100%.
The lack of rainfall has limited hydroelectric
output but offers a big opportunity
for other power generators. The
EIA says generation from natural gas
and other fossil fuels was at record high
levels in August, while hydroelectric
generation was at its lowest level since
July 2005. The trend continued in the
first half of September, with hydroelectric
generation 16.9% less than during
the same period in 2013, according to
the Chamber of Electric Energy Commercialization
(CCEE), the nonprofit civil
association responsible for energy marketing
activity in Brazil. It says thermal
generation output increased 33% dur2.
Thirsty dam. Drought is no joke for a country like Brazil that relies heavily on hydroelectric
power. The Itaipu hydroelectric facility (pictured here) supplied 16.9% of Brazil's and 75% of
Paraguay's electricity last year. Courtesy: Itaipu Binacional
ing the period, picking up some of the
slack.
Much of Brazil's power is priced under
long-term contracts, but an estimated
25% to 30% is sold on the short-term
settlement price differences (PLD) market.
The CCEE sets the PLD rate weekly,
using two software programs that simulate
system operation. The model utilizes
weather forecasts, demand projections,
and power plant outage schedules, as
well as other factors.
During the fourth week of September,
the average PLD rate was R$745.91/
MWh ($308/MWh). While many factors
figure into long-term contract prices,
CCEE auction results published earlier
this year show that the average price
for electricity negotiated in the 13 auctions
held since 2004 was R$118.37/
MWh ($48.67/MWh).
In the PLD price announcement, the
CCEE noted that a few hydroelectric
plants-all located in the Amazon rainforest
region-were expected to increase
generation, which had helped to decrease
the spot price from the previous week. The
Santo Antonio do Jari hydroelectric plant
in northern Brazil was expected to bring its
first unit into commercial operation during
the week (and it did), and the Jirau plant
on the Madeira River in western Brazil was
commissioning another of its units. The
Tucuruí Dam was also expected to increase
generation, even though its reservoir level
was at only 44% of capacity.
As a sign of the country's demand
for power to replace hydroelectric generation,
the EIA reported that liquefied
natural gas (LNG) has been re-exported
from Europe (and likely originated in the
Middle East or Africa) several times this
year, including in late September. Petrobras,
Brazil's state-controlled oil and
gas firm and the sole importer of LNG
to the country, imported a record 2.833
million tons of LNG over the first eight
months of 2014. While LNG is important
for balancing demand spikes, the majority
of natural gas used in Brazil comes
from domestic production and pipeline
gas imported from Bolivia.
There is hope that the historically rainy
season of November to May will improve
hydro resources.
-Aaron Larson
Europe's Largest
Commercial Battery
Storage Facility Opens
Just as POWER predicted in its May issue
(see " The Year Energy Storage Hit
November 2014 | POWER
www.powermag.com
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POWER November 2014

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