Challenges

Water and energy resources are plentiful in Brazil, but highly unevenly distributed. Hydropower represents 83% of the country's installed capacity, while new energy needs are expected to be met by thermal plants fueled by natural gas. A recently completed natural gas pipeline from neighboring Bolivia was seen as a solution to future energy needs, but this contract is now likely to be renegotiated. Complicating the country's energy scenario is a partial privatization of the power sector, and a recent drive by President Lula and his administration to stabilize electricity tariffs.

As in other developing countries, Brazil is striving to respond to the challenges posed by rapidly growing urban populations. In Brazil's southeast, the cities of Rio and Sao Paulo strain under the weight of providing urban services to some of the largest urban slums – favelas - in Latin America. In the country's drought prone northeast, economic growth is concentrated along the coast, pushing those in the region's interior toward opportunities in the cities of Recife, Salvador, Fortaleza and Natal.

Background

Brazilian water utilities struggle to balance existing infrastructure with the changing demands presented by unplanned housing growth. As in other parts of the world, poor Brazilians lack urban services that more affluent Brazilians take for granted. When it comes to water supply,favela dwellers often resort to the services of water vendors, paying water prices that are several times higher then those paid by inhabitants with formal water service. To address these challenges the Alliance seeks to provide water utilities with a variety of Watergy efficiency tools. Watergy is a global program of the Alliance to Save Energy that provides water utility managers with the knowledge and tools to make their systems more efficient, improving water service, expanding water access, and saving considerable quantities of water, energy, and money. In the process, the strain on ground and surface water sources is reduced, as well as the environmental impacts associated with generating the energy needed to pump and treat water.

Early Alliance efforts in Brazil focused on individual utility partnerships. The longest standing of these partnerships was launched in 2001 with the water and wastewater utility of the state of Ceará in the country's arid northeast. The kick-off of this partnership coincided with a severe power crisis, due to a drought and the country's heavy reliance on hydropower electricity generation. Through Alliance assistance the Ceará utility – CAGECE - was able to meet state imposed power rationing goals set at reductions of 20% over normal usage. See the Watergy case study for Fortaleza, Brazil (PDF format) for more information. As a result of this partnership the Alliance and CAGECE emerged from the challenges of 2001 with a strong case to advance Watergy efficiency at the national level.

Objectives

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Approach

With the establishment of ABAE, the Alliance has created an independent Brazilian organization driven by local objectives related to energy and water efficiency. Early support for ABAE was voiced by the Brazilian federal energy efficiency organization PROCEL. From this early declaration the Alliance guided a process to position ABAE as a catalyst for efficiency, joining forces with the private sector to tap its extensive knowledge of energy and water efficiency, and moving the entire water sector towards improved service and lower costs. Today, equipment and service providers representing a variety of technologies and approaches are helping water utilities across the country address specific efficiency challenges. ABAE does this through technical seminars focused on efficiency topics, like metering and monitoring, pump and motor efficiency, system automation, and water loss reduction. Recent ABAE partnerships have brought in power utilities aimed at developing demand side management initiatives targeting the municipal water sector.

Running in parallel with ABAE work, the Alliance is demonstrating successful approaches for water utilities to take Watergy projects from project design and development through to financial closure with private partners. The Alliance has created partnerships with privately held water utilities in an effort to develop innovative models than can be adopted by other Brazilian utilities. Current activities include identifying viable projects and project developers and connecting them to energy service companies, financial institutions and government allies.

The effort to establish Watergy business models is now in the project identification phase, and will soon begin securing financing for these efforts. A variety of contacts with energy and water efficiency technology and service providers as well as energy service companies has led to increased opportunities for cooperation and new project identification. Four projects have been identified to date. Project approaches include peak shaving, motor exchange, pressure management, and application of variable speed drives.

Recent Events

In May 2005, the Alliance continued discussions on potential project funding with water utilities in the states of Espirito Santo and Pará, as well as the Federal District . Potential projects included small hydro applications within bulk water conveyance; pumping station reconfiguration designed to maximize efficiency; and variable speed drive implementation within existing pumping operations. The Alliance also initiatied new discussions with Aguas do Amazonas, a privately-owned water utility serving the city of Manaus (state of Amazonas) and the municipal water utility of Ribeirao Preto (state of Minas Gerais). Potential projects include pumping system reconfiguration, pressure control and the opportunity to install variable speed drives at existing wells, along with well rehabilitation in Ribeirao Preto. BerlinWasser and their subsidiary Pigadi are supporting Alliance efforts in these new discussions.

In June 2005, ABAE cooordinated a capacity building seminar for 134 participants focused on controlling water loss and non-revenue water interventions. The event in Belém was hosted by COSANPA, the state water utility of Pará, with technical expertise provided by GAGECE and COPASA, the state water utility of Minas Gerais. Public sector participants included Efficientia, Procel/Sanear – Eletrobras, Caixa Econômica Federal, PNCDA – National Program to Avoid Water Wasting, UFPA, and other state utilities. Private sector sponsors of the event included Estacon Engineering, Paulitec, Servic Constructions, Construbase, Egesa and CR Constructions.

During the seminar, preliminary meetings between COSANPA and Efficientia were held to discuss the potential projects that COSANPA will have available. With the help of the Alliance , CONSANPA will identify and develop the projects that will be part of the performance contracts. Efficientia will provide contracting models and evaluate the legal aspects of the contracts to address legal barriers to ESCO engagement in the public sector in Brazil.