The Brazilian Renewable Energy Incentive Program - The Second Phase of the PROINFA: Assessing Policy Efficiency And Barriers in Long-term Scenarios

Abstract

The PROINFA is a Brazilian government policy which is divided into two phases and whose objective is to promote the expansion of power generation through renewable sources. This paper aims to assess the efficiency of the second phase with regard to long-term scenarios (2009-2030), identifying gaps and barriers, and proposing policy options to address them. In the first phase, the Program calls for the generation of 3,300 MW of renewable energy with a national business participation rate of 60%, aiming to maximize the countrys regional potentials, create jobs, reduce CO2 emissions through thermal (fossil) displacement, and promote energy contracts with differentiated conditions for conventional sources, as well as specific tariff/MWh for each source. The second phase fixes a 90% nationalization rate and a 15% Brazilian electrical energy annual consumption rate to be supplied by these sources. The goals of this phase are expected to be reached within twenty years, and the price will be a weighted average between competitive hydroelectric and thermoelectric (natural gas) prices.