DISCUSSING BRAZIL’S NUCLEAR FUTURE

Overview

Since the 2001’s electricity shortage, Brazil has been searching alternatives for expanding its power generation. Increasing thermal

power generation has been proposed as a strategy for the country to reduce its dependence upon hydropower. Among the foreseen

thermal power technologies, nuclear energy has been receiving special attention. The impetus with which the revival of nuclear

energy is coming back to the international energy debate also helps to revitalize the nuclear discussion in Brazil. Initially, the

domestic contest focused on whether Brazil should resume the construction of its third nuclear power reactor, Angra III. The paper

describes how the Brazilian nuclear community has been arguing in favor of and mounting the political pressures to influence the

federal government to retake Angra III’s construction. Subsequently, the government issued proposals for a much larger nuclear

power program trying to establish a more aggressive and nationalistic nuclear-based energy strategy. The paper describes the main

aspects of such policy, which must be considered in a historic perspective. Indeed, nuclear power is a historic project for Brazil.

Such history is briefly described from the launching of Brazil’s first reactor, Angra I, in the mid-1960s, to the disappointing

partnership with Germany during the 1970s, which led to the construction of Angra II. The Brazilian flaw experiences with nuclear

energy must be revisited to avoid major failures in the country’s future energy policy. The paper advocates against the immediate

construction of Angra III. Yet, given the current uncertainties regarding the expected role that nuclear energy may play in the future

as well as the interesting opportunities Brazil can take advantage of at the present, the authors suggest a different approach for a

Brazilian nuclear policy, focusing rather on technological development and naval applications, and also including partnerships with

Brazil’s neighboring countries.

The brief panorama of nuclear power in the global energy debate

Due to safety concerns and financial troubles, things have not gone well for the nuclear energy since the Three Mile Island accident

in 1979. However the picture seems to have been changing more favorably to nuclear lately. There are broad discussions regarding

the revival of the nuclear industry in the major western countries. Nuclear energy’s political and economic situation seems to have

been improving lately and increasing therefore its social acceptance.

In many parts of the world and particularly in Asia, nuclear energy was never ruled out. As shown by the IEA (2006a), nuclear

power kept its 15% share in the total world power production from the mid-1980s to 2005. By promoting energy security, countries

such as China, Korea, Taiwan, Japan and Russia continued to move towards energy diversification including some nuclear capacity.

China expects to boost significantly its nuclear power program. In 2007, only 2% of China`s total installed power capacity (i.e.,

about 8 GW) was based on nuclear. The country aims to increase its nuclear power capacity to 150 GW up to the year 2050.

Since the year 2001 and primarily due to climate change and energy security concerns, most western countries have increasingly

restarted to look at building new nuclear facilities as well. Sweden and Germany had formerly and officially banned the nuclear

option setting up policies to phase out all their nuclear capacity over determined period of time. Both countries started to realize the

costs that such policies may impose them. The replacement of all nuclear facilities as well as the need to drastically reduce

greenhouse gas emissions make difficult to find a balanced energy policy for the future. Embracing a nuclear-free energy policy left

the two countries with little room to maneuver among the remaining energy alternatives. As a result, the Swedish and German

public opinion is already accepting (although still with some restrictions) that the former nuclear-free energy proposal will likely

terminate in simple rhetoric.

Changes in public opinion regarding the future role of nuclear energy have also been pushed by part of the scientific community in

many countries and particularly in the UK. Since the 1980s, Britain experiences a kind of moratorium on building new nuclear

Edmilson Moutinho dos Santos, IEE - University of Sao Paulo, 55-11-4153-1693, edsantos@iee.usp.br

Paul Louis Poulallion, SINDE, 55-21-2240-5140, ppoulallion@sinde.com.br

Murilo Tadeu Werneck Fagá, IEE - University of Sao Paulo, 55-11-3091-2634, murfaga@iee.usp.br

reactors and its 16 stations are getting older and requiring replacement or significant revamping. According to scientists assembled

at the Royal Society, the UK should clearly support a diversified energy policy, combining different energy sources and including

nuclear power as an option to be fostered together with more renewables and energy efficiency measures. Such diversified policy

should guarantee the UK’s future electricity supply to match continuous fast growing demand as well as drastically reduce the

country’s carbon dioxide emissions (Royal Society, 2006).

As suggested by Cohen (2006) and Taylor (2006), nowhere the public opinion vis-à-vis the acceptability of nuclear energy seems to

be shifting more strikingly and surprisingly than in the USA. The revival of nuclear power is increasingly considered as an essential

strategy for the USA to keep its leadership in the nuclear world. In 2004, according to the IEA (2006b), the USA were the world

largest electricity producer (4,148 TWh, representing 23% of the total global production). By holding almost 100 nuclear reactors

in operation (with total annual production of 816 TWh), the USA had still the largest nuclear industry, representing approximately

30% of all nuclear-based electricity production in the world. Yet, the share of nuclear power in the total US electricity production

was 20%, while in countries such as France and Sweden nuclear played a leading role (with respective shares approaching 75% and

50% in the total national electricity production). Increasing the share of nuclear would reaffirm the US commitment to keep the

leadership and push forward the development of new nuclear technologies.

Besides, Americans are increasingly accepting the nuclear energy as the easiest strategy for the USA to secure the future supply of

electricity at the same time as plummeting the national dependence on imported fossil fuel and the greenhouse gas emissions

produced by the power sector. One can hardly believe that, almost 30 years after the Three Miles Islands accident, nuclear energy

can stand up again for Americans as a clean and environmentally friend power source. Growing global warming concerns have

favorably changed the environmental game for nuclear, helping to captivate even many long-opposed-to-nuclear environmentalists.

Furthermore, the re-embrace of nuclear power in the USA transcends political party affiliation. In October 2004, the US Congress

issued a Senate Concurrent Resolution highlighting the increasing Bipartisan support to the expansion of nuclear power. The

Resolution recognized the value of nuclear energy in generating safe, consistent affordable and emission-free electricity. The Bush

Administration proposed an expansion in nuclear power in the Energy Policy Act of 2005The need for the USA to support the

expansion of nuclear energy was then officially acknowledged (Holt, 2007).

Such more positive political momentum for nuclear in the USA transcends the country`s borders. In May 2007, mministers and

other senior officials representing energy-related governmental agencies from China, France, Japan, Russia and the USA (having

Britain as observer) issued a joint statement in support of a Global Nuclear Energy Partnership (GNEP, 2007). The major aim of

such joint effort is to provide increasing access to peaceful uses of nuclear energy, including power generation, through a

worldwide international cooperation scheme. Such initiative followed an even more striking outcome form the 2006`s G8

Presidency Meeting in Russia. The St. Petersburg Plan of Action on Global Energy Security stated a strong joint support for

nuclear energy to contribute to global energy security and climate change mitigation (G8, 2006). Just by presenting a single view on

how nuclear energy is eventually supposed to play a leading role in the future, the G8 already proved that distrusts against nuclear

power had already substantially diminished, even among those countries that previously did not accept to issue supportive

declaration favoring the nuclear option.

Despite all the clear signals of a more positive outlook for nuclear energy, uncertainties are still present and the international debate

vis-à-vis the future role of nuclear power is still opened. As the climate change issue is increasingly perceived as the largest

environmental worry for the sustainability of the human beings on Earth, the nuclear industry can improve its acceptability in

respect to the producers and final users of fossil fuel. Gradually, the case for supporting the revival of nuclear energy as the leading

and most cost-effective carbon-free electricity production alternative seems to become stronger. Better management is allowing the

nuclear power plants to run more efficiently and to perform much better environmentally. In many countries, nuclear electricity has

turned into the cheapest solution. France became, to some extent, the nuclear icon by proving the feasibility to run a national power

grid based almost on nuclear power. In the long term, France turned into a major electricity exporter within Europe.

The US case must be closely followed. No new nuclear reactor has been built in the USA in the last 20 years. No reactor has been

ordered in the United States since 1978. The last new unit stared the operation in 1996. Since then only uprating or retirement of

existing units were registered. However, after the full amortization of main capital costs, the nuclear facilities still in place rank

among the most competitive generating units, producing inexpensive and high reliable electricity. Such picture is imposing

revisiting the long-term competitiveness of nuclear energy as compared to other options. The Energy Policy Act of 2005 removed

important regulatory barriers that used to scare the electricity utilities to even think about trying to license and build new nuclear

facilities. Moreover, the action of local communities has been positively boosting the national public support vis-à-vis the nuclear

energy. The globalization of the world economy has been treating harshly several small towns in the USA, the economy of which

has been devasted with manufactories shutting down and jobs being lost. Some of those communities are eager to attract the

utilities` billionaire investments to build and operate new large nuclear plants. Their dreams of potential economic revitalization

help to increase the national enthusiasm and the social and political support to nuclear power.

Holt (2007) emphasizes that, together with higher fossil fuel prices and the possibility of greenhouse gas controls; the Federal

government incentives to nuclear power have already helped to spur renewed interest by potential nuclear reactor developers. Plans

for about 30 new reactors have been announced. Yet, no actual commitment has been made to build those plants. The delay to get

the licenses and launching the construction works may weaken the revival of nuclear power in the USA. In fact, according to the

EIA (2007), even with the projected increase in nuclear capacity and generation, the nuclear share in the total electricity generation

is expected to fall from 19% in 2005 to 15% in 2030. In the AEO2007`s reference case, up to 3 GW are projected to be added by

uprates in existing facilities, which shall balance the 2.6 GW of older plant retirements. Only 9 GW of new nuclear capacity is

expected to be built in response to the Energy Policy 2005 Act. Others 3.5 GW might be added in later years in response to higher

fossil fuel prices. Yet, even such less optimistic vision may not materialize. No new nuclear facility was in construction by mid-

2007. Therefore worries of future electricity shortages in the USA are rising and the urgent additional supply can only be match by

other power technologies taking much shorter to be built.

Moreover the USA may be just starting a new phase in its energy history. It is really not sure whether Americans will be able to

keep matching the electricity demand and supply always increasing production and without restructuring their electricity

consumption. Deep restructuring in the electricity demand will eventually allow the USA to avoid the need of an early return to

nuclear energy.

The revival of the nuclear energy debate in Brazil

The impetus with which nuclear energy is debated internationally also helps to revive the nuclear discussion in Brazil. Initially, the

political debate focused on whether the construction of Brazil’s third nuclear reactor, Angra III, should be pursued. Such discussion

has been evolving up and down with different paces for more than ten years. In 2006, the Federal government issued the so-called

National Energy Plan with projections to 2030 (NEP2006). As shown in Table 1, Angra III is still expected to be the only new

nuclear plant to be built in the 2007-15 period. Nevertheless, the NEP2006 sets up a larger national nuclear program for the period

2016-30. The NEP2006 suggests that, by 2030, Brazil may add from 4 to 8 GW of new nuclear capacity. In other words, the

projection for new nuclear energy in Brazil is comparable in scale to what the Energy Information Administration is estimating to

the USA.

TABLE 1: Expected new nuclear power capacity in Brazil – 2007 to 2030 (in MW)

Scenarios: 2007 – 2015 2016 – 2020 2021 – 2025 2026 – 2030 2016 - 2030

LOW 1360 (Angra III) 1000 1000 2000 4000

MEDIUM 1360 (Angra III) 1000 2000 3000 6000

HIGH 1360 (Angra III) 2000 3000 3000 8000

Source: NEP2006 – EPE

Since the 2001’s electricity shortage, Brazil has been searching alternatives for expanding its power generation. Among the

foreseen power technologies, nuclear energy received special attention. In fact, nuclear power is a historic project in Brazil. As

shown in Table 2, the first reactor, the Westinghouse PWR Angra I, the construction of which was launched in the mid-1960s,

begun to operate only in 1985. Then, disappointed with its partnership with the USA, Brazil decided to co-work with the former

West Germany in the 1970s. A broad Nuclear Program previewed the construction of up to 8 major KWU PWR reactors plus the

complete technology transferring, which would supposedly allow Brazil to fully command the uranium cycle from mining,

processing, fuel-manufacturing and enrichment. The Nuclear Program with Germany also failed. Only one power station, Angra II,

was built, coming on service in the year 2000.

As shown in Figures 1 and 2, hydropower was the main driver for the expansion of Brazil`s electricity system up to 1995. By the

mid- 1990s, the searching for thermal alternatives to generate power had already risen up the political agenda. Thermal power

generation was seen as essential strategy for Brazil to reduce its dependence on the “humors of water”. From 1995 to 2005, thermal

power generation grew much faster than hydropower generation. Moreover, since the year 2000, thermal installed capacity,

including nuclear capacity, became the main driver for the expansion of the system. Primarily, the Federal government supported

the construction of many oil-and-gas-fired power plants. Then, Angra I and II also played a leading role increasing substantially

their power generation. During the electricity crisis, the nuclear reactors were essential to help the country to alleviate its electricity

shortage. In this context, the discussion about resuming the construction of Agra III heated up and became a major political issue.

TABLE 2: Power Generation Installed Capacity by Fuel - 1985 - 2005 (in MW)

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Total Installed Capacity 44,107 44,953 47,561 49,575 52,125 53,050 54,141 55,049 56,222 57,629 59,120 60,801 62,972 65,209 68,181 73,712 76,255 82,458 86,505 90,733 93,158

UTILITIES 40,818 41,664 44,260 46,265 48,836 49,761 50,852 51,760 52,751 54,105 55,533 57,194 59,150 61,312 63,960 68,669 71,117 76,807 80,287 84,108 86,300

AUTO-PRODUCTION 3,289 3,289 3,301 3,310 3,289 3,289 3,289 3,289 3,471 3,524 3,587 3,607 3,822 3,897 4,221 5,043 5,138 5,651 6,218 6,625 6,858

Total Hydro power 37,077 37,786 40,329 42,228 44,796 45,558 46,616 47,709 48,591 49,921 51,367 53,119 54,889 56,759 58,997 61,063 62,523 65,311 67,793 68,999 70,858

UTILITIES 36,453 37,162 39,693 41,583 44,172 44,934 45,992 47,085 47,967 49,297 50,680 52,432 53,987 55,857 58,085 60,095 61,551 64,146 66,587 67,572 69,274

AUTO-PRODUCTION 624 624 636 645 624 624 624 624 624 624 687 687 902 902 912 968 972 1,165 1,206 1,427 1,583

Total Thermal power (by fuel) 7,030 7,167 7,232 7,347 7,329 7,492 7,525 7,340 7,631 7,708 7,754 7,682 8,083 8,450 9,183 12,649 13,732 17,147 18,712 21,734 22,300

UTILITIES

NON-NUCLEAR 3,708 3,845 3,910 4,025 4,007 4,170 4,203 4,018 4,127 4,151 4,197 4,105 4,506 4,798 5,217 6,567 7,559 10,654 11,693 14,529 15,019

NUCLEAR 657 657 657 657 657 657 657 657 657 657 657 657 657 657 657 2,007 2,007 2,007 2,007 2,007 2,007

AUTO-PRODUCTION

NON-NUCLEAR 2,665 2,665 2,665 2,665 2,665 2,665 2,665 2,665 2,847 2,900 2,900 2,920 2,920 2,995 3,309 4,075 4,166 4,486 5,012 5,198 5,274 Source: BEN2006

Both Angra I and II had never performed well during reasonable period of time. As revealed by Table 3, from 1986 to 1994, the

average utilization factor was lower than 40%. Then, it gradually grew up to 80%. In 2001, the utilization factor of those two

nuclear plants turned very positive. For the first time in history, it was greater than 80%, achieving the international standards.

From its historical “lower than 1.5%”, the market share of nuclear energy in the total power generated in the country increased to

4.0% in 2000 and 4.3% in 2001. Nuclear energy helped to increase the market share of total thermal power from the historical

“lower than 10%” to 12.8% (2000), 18.5% (2001) and 17.2% (2002). The share of nuclear energy in the total thermal power

generation was approximately 23% during those three consecutive years. In 2005, due to technical problems in Angra II, the

average utilization factor of Angra I and II declined to 56%. Yet, according to early data issued by the government regarding the

forthcoming BEN2007, nuclear generation increased 44% in 2006 with the resuming of continuous operation in Angra I and II, the

production of which increased from 9.9 TWh in 2005 to 13.8 TWh in 2006.

Figure 1: Figure 2:

0

20

40

60

80

100

120

140

160

180

200

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Installed Capacity - Annual expansions of Hydro - Total Thermal and Nuclear vis-à-vis the Total Expansion of the System (1985 - 2005)

"Total expansion of the system"

"Hydropower expansion"

"Total thermal power expansion"

"Nuclear power expansion"

0

50

100

150

200

250

300

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Power Effectively Generated - Annual expansions Hydro - Total Thermal and Nuclear

vis-à-vis the Total Expansion of the System (1985 - 2005)

Total expansion of the system

Hydropower expansion

Total thermal power expansion

Nuclear power expansion

Source: BEN2006

TABLE 3: Market Share & Annual Average Utilization Factor per Fuel - 1985 - 2005 (in %)

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

MKT SHARE - INSTALLED CAPACITY:

Mkt Share Hydro 84.1% 84.1% 84.8% 85.2% 85.9% 85.9% 86.1% 86.7% 86.4% 86.6% 86.9% 87.4% 87.2% 87.0% 86.5% 82.8% 82.0% 79.2% 78.4% 76.0% 76.1%

Mkt Share Thermal 15.9% 15.9% 15.2% 14.8% 14.1% 14.1% 13.9% 13.3% 13.6% 13.4% 13.1% 12.6% 12.8% 13.0% 13.5% 17.2% 18.0% 20.8% 21.6% 24.0% 23.9%

NON-NUCLEAR 14.4% 14.5% 13.8% 13.5% 12.8% 12.9% 12.7% 12.1% 12.4% 12.2% 12.0% 11.6% 11.8% 12.0% 12.5% 14.4% 15.4% 18.4% 19.3% 21.7% 21.8%

NUCLEAR 1.5% 1.5% 1.4% 1.3% 1.3% 1.2% 1.2% 1.2% 1.2% 1.1% 1.1% 1.1% 1.0% 1.0% 1.0% 2.7% 2.6% 2.4% 2.3% 2.2% 2.2%

NUCLEAR / TOTAL THERMAL 9.3% 9.2% 9.1% 8.9% 9.0% 8.8% 8.7% 9.0% 8.6% 8.5% 8.5% 8.6% 8.1% 7.8% 7.2% 15.9% 14.6% 11.7% 10.7% 9.2% 9.0%

MKT SHARE - POWER GENERATED:

Mkt Share Hydro 92.1% 90.2% 91.3% 92.6% 92.3% 92.8% 92.9% 92.4% 93.3% 93.3% 92.1% 91.3% 90.6% 90.6% 87.5% 87.2% 81.5% 82.8% 83.9% 82.8% 83.7%

Mkt Share Thermal 7.9% 9.8% 8.7% 7.4% 7.7% 7.2% 7.1% 7.6% 6.7% 6.7% 7.9% 8.7% 9.4% 9.4% 12.5% 12.8% 18.5% 17.2% 16.1% 17.2% 16.3%

NON-NUCLEAR 6.2% 9.7% 8.2% 7.1% 6.9% 6.2% 6.5% 6.9% 6.5% 6.6% 7.0% 7.9% 8.4% 8.4% 11.3% 11.0% 14.1% 13.2% 12.5% 14.2% 13.8%

NUCLEAR 1.7% 0.1% 0.5% 0.3% 0.8% 1.0% 0.6% 0.7% 0.2% 0.0% 0.9% 0.8% 1.0% 1.0% 1.2% 1.7% 4.3% 4.0% 3.7% 3.0% 2.4%

NUCLEAR / TOTAL THERMAL 22.1% 0.7% 5.5% 3.8% 10.7% 13.9% 8.7% 9.6% 2.6% 0.3% 11.6% 9.5% 10.9% 10.8% 9.5% 13.6% 23.6% 23.2% 22.7% 17.4% 15.0%

Annual Average Utilization Factor:

Total System 50.1% 51.3% 48.8% 49.5% 48.6% 47.9% 49.4% 50.1% 51.2% 51.5% 53.2% 54.7% 55.8% 56.3% 56.0% 54.0% 49.2% 47.9% 48.1% 48.7% 49.4%

Hydro 54.9% 55.1% 52.5% 53.8% 52.2% 51.8% 53.3% 53.4% 55.2% 55.5% 56.4% 57.1% 58.0% 58.6% 56.7% 56.9% 48.9% 50.0% 51.5% 53.1% 54.4%

Thermal 24.9% 31.4% 28.0% 24.6% 26.6% 24.5% 25.2% 28.6% 25.3% 25.7% 31.9% 37.9% 41.0% 40.9% 51.9% 40.2% 50.4% 39.7% 35.8% 35.0% 33.6%

NON-NUCLEAR 21.4% 34.3% 29.1% 26.0% 26.0% 23.2% 25.2% 28.4% 27.0% 28.0% 30.8% 37.5% 39.7% 39.6% 50.5% 41.3% 45.1% 34.5% 31.0% 31.9% 31.3%

NUCLEAR 58.7% 2.5% 16.9% 10.6% 31.8% 38.9% 25.1% 30.6% 7.7% 1.0% 43.8% 42.2% 55.1% 56.7% 69.1% 34.4% 81.2% 78.7% 76.0% 66.0% 56.1%

Source: BEN2006

By mid-2002, having started raining again and the electricity demand having declined substantially as a result of many

rationalization initiatives put in place in 2001 (the Brazilian electricity consumption declined by almost 20% during the crisis), the

electricity supply/demand balance turned fast from deficit to oversupply of power. The electricity price collapsed to astonishing

less than 4 $/MWh. The thermal power plants, some of which built as merchant plants, without the backup of long-term power

purchase agreements, started running into financial difficulties. The units protected by long-term contracts were subsidized in some

extent. Thermal power could no longer co-exist in a market dominated by low-cost hydroelectricity. Angra I and II only survived

due to their long-term sales agreement with the state-owned Furnas, which paid for nuclear energy significantly more expensive

than it could otherwise have paid for the electricity available in the spot market.

Angra I and II are operated by Eletronuclear, a state-owned enterprise, which sells all the power generated to Furnas. Both

companies are controlled by another state-owned enterprise, the holding company Eletrobras. The process of setting up the price

for the electricity generated by Angra I and II is rather political (and decided within the government and Eletrobras). The nuclear

plants are not supposed to operate in full market conditions. Since December 2004, after tough negotiation, Furnas agreed to pay to

Eletronuclear approximately 37 US$/MWh generated by Angra I and II. This price does not reflect the full cost of those plants. It

results from an adjustment mechanism by which Eletronuclear sells its energy at a price compatible to Furnas hydroelectric plants

and the difference is balanced by the Federal government.

As shown in Table 3, since 2001, the market share for hydropower in terms of total installed capacity has been continuously falling

as new (non-nuclear) thermal plants are built and made available for operation. As far as the power effectively generated is

concerned, the market share of hydro has actually increased by almost 2%. The hydro system`s utilization factor increased from

48.9% in 2001 to 54.4% in 2005. As a result, the whole thermal system reduced its average utilization factor from 50.4% in 2001 to

33.6% in 2005. Taking the system as a whole, the average utilization factor, after having declined to its floor level in 2002

(reaching 47.9%), increased continually from 2002 to 2005. Though, it is still far from the levels registered just before the

electricity shortage. The presence of more thermal facilities should, nevertheless, allow the system to operate with higher utilization

factor. The recent investments may have helped to increase the electricity supply security, but they damaged the efficiency in the

overall capital allocation.

Unless the electricity demand starts growing much faster, the more intense operation of Angra I and II requires the non-nuclear

thermal facilities to reduce even more the charge and run with higher idle capacity. Any early investment in new nuclear power

facility will have to turn even less competitive the non-nuclear thermal plants. In other words, promoting even more nuclear power

in Brazil could eventually lead to growing over supply of electricity and expressive reduction in the average utilization factor of the

system. In 2004 and 2005, while Angra I struck its production records, Angra II presented operational problems, which resulted in

interruptions and load reductions. Such situation allowed the non-nuclear thermal plants to stabilize the average utilization factor in

31%. However, in 2006, as already mentioned, nuclear power generation increased by more than 40% as Angra II resumed its

normal operation. Moreover, as also to be shown by the BEN2007, coal-and-biomass-fired power plants also registered expressive

growth in power generation (respectively 8.5% and 7.2% as compared to 2005`s levels). The nuclear, coal and biomass-fired plants

responded for almost 60% of all the thermal power generated in 2006. The biomass (wood fire, sugar-cane residues as well as other

wastes) became the main fuel for thermal power generation in Brazil, producing almost 20 TWh (or about 28% of the total thermal

power generated). The oil-fired plants also presented a growing power generation (2% from 2005 to 2006). Such results were

achieved due to the 3.1% reduction in the use of natural gas for power generation. Since 2001, Brazil invested from US$ 7 to 10

billion in gas-fired power plants, the operation of which has never been appropriate, primarily due to insufficient market.

Yet, the debate regarding the construction of Angra III was not frozen. Actually, it has been amplified by the publication of the

NEP2006 proposing boosting the future role of nuclear power in Brazil. Moreover, nuclear energy definitively returned to the

domestic political agenda in July, 2007, when President Luiz Inacio Lula da Silva officially announced the launch of Brazil New

Nuclear Program. The President reaffirmed the Program’s peacefulness and no intention of pursuing nuclear weapons, but he also

avowed that Brazil would resume its historical objective of fully controlling the uranium cycle and building up an extensive nuclear

power program.

Starting from 2004, the debate regarding nuclear power and the construction of Angra III intensified. Following similar arguments

found in the international debate, the case for more nuclear power as an energy diversification strategy became stronger. The gas

supply for Brazil, both domestically produced and mainly imported from Bolivia, which had previously been assumed as abundant

and at low risk to supply a major power program based on gas-fired plants, suddenly turned into nightmare. Despite the rapid

growing dependence on gas imports from Bolivia, the policy of promoting gas-fired power plants had been considered the most

cost-effective strategy to increase the security of electricity supply in Brazil. However, as described by Moutinho dos Santos et al

(2007), the gas relations between Bolivia and Brazil started to deteriorate in 2004. Scared by mounting energy nationalism in

Bolivia, the Brazilian perception of risk regarding the gas supply substantially increased. Natural gas turned rapidly to be

understood as the major source of energy insecurity for Brazil and its electricity system. The NEP2006 echoed such new

perspective and gave priority to the development of domestic energy sources, including the considerable expansion of nuclear

power.

On the other hand, Eletronuclear has also been propping up the Brazilian return to nuclear energy based on environmental grounds.

Again, the arguments favoring nuclear power in the international debate are imported to Brazil and then adapted to the domestic

reality. In fact, the nuclear power environmental benefits of reducing the greenhouse gas emissions are not straight realized in a

country where power is mainly generated by hydro sources and the potential for new hydropower is still huge. As shown by Table

4, the Brazilian hydro system can be divided into eight major hydro basins, which present different levels of hydropower

exploitation. The total hydroelectric potential is estimated at 260 GW. Only 68% of that potential has ever been inventoried, which

means that the total potential might be even larger. The Bacia do Rio Paraná and Bacia do Rio Amazonas are the two basins with

the highest hydro potential. The first is located close to the main markets in the South and Southeast regions. It is already exploited

in more than 60%. No new large hydropower facility is expected to be built in this basin. The latter is roughly unexploited, but its

remote location challenges potential investors willing to develop such huge hydro potential.

Eletronuclear has been emphasizing the potential conflict between energy and environmental interests in the occupation of the

Amazon region, which shall make difficult for the country to completely exploit its hydro resources. As highlighted by Figures 3

and 4, the energy sector as well as the Brazilian environmental authorities, which have been expanding the National Protection

Areas in Brazil (aiming to preserve both the forest and the biodiversity), are both moving towards the Amazon region. In the long

term, the conflicts will likely arise and there are uncertainties regarding how much of the total available hydropower potential will

actually be ever exploited. Following such argument, the nuclear industry suggests that Brazil should rather continue enforcing

policies aiming to increase the power generation diversification. Keeping the nuclear program in expansion is proposed as the main

option for Brazil to substitute the hydropower not to be developed in the Amazon region. According to Eletronuclear, quoting EPE

(2006), the options for large power plants, which can provide large-scale blocks of new energy in the future, are not countless. Only

six new hydro plants expected to come in operation in the period 2006-2015 can offer installed capacities larger than the 1.3 GW

foreseen for Angra III. Those projects are all located in remote areas in the Amazon region. They all involved environmental

difficulties as well as significant technical and economic challenges, including the long-distance transmission lines required to make

their energy available to the main markets. It is in comparison to those options that nuclear energy should be revisited in Brazil.

TABLE 4: Hydropower Potential in Brazil - In average available MW (*) - As stated by March 2003

Hydro Basin

Name

Hydro

Basin

Code

Inventoried

Potential (a)

Inventoried

+ Estimated

Potential (b)

Installed

Capacity

(c)

Exploited Index

(c) / (a) (c) / (b)

Bacia do Rio Amazonas 1 40.883,07 105.047,56 667,30 1,6% 0,6%

Bacia do Rio Tocantins 2 24.620,65 26.639,45 7.729,65 31,4% 29,0%

Bacia do Atlântico Norte e NE 3 2.127,85 3.198,35 300,92 14,1% 9,4%

Bacia do Rio S. Francisco 4 24.299,84 26.217,12 10.289,64 42,3% 39,2%

Bacia do Atlântico Leste 5 12.759,81 14.539,01 2.589,00 20,3% 17,8%

Bacia do Rio Paraná 6 53.783,42 60.902,71 39.262,81 73,0% 64,5%

Bacia do Rio Uruguai 7 11.664,16 12.815,86 2.859,59 24,5% 22,3%

Bacia do Atlântico Sudeste 8 7.296,77 9.465,93 2.519,32 34,5% 26,6%

Brazil - 177.435,57 258.825,99 66.218,23 37,3% 25,6%

Source: ANEEL – 2002 - Atlas de Energia Elétrica do Brasil - Found at: htt://www.aneel.gov.br

Data provided by CENTRAIS ELÉTRICAS BRASILEIRAS – ELETROBRAS.

(*) Measured in terms of Firm Energy, i.e., the continuous maximum generation in the hypothesis of future repetition of the most critical

Hydrological season ever registered (assuming average load factor ~ 55%).

Figure 3: Figure 4:

Source: ANEEL – 2002 - Atlas de Energia Elétrica do Brasil - Found at: htt://www.aneel.gov.br

Ministério do Meio Ambiente – www.mma.gov.br

Avoiding past mistakes and proposing a Brazilian nuclear policy aiming to the future

Despite the heating contest regarding the revival of nuclear energy in Brazil, the uncertainties in relation to the Brazilian New

Nuclear Program are as big as or even larger than those surrounding the international nuclear reality. Even the decision of retaking

the construction of Angra III has been engendering controversies within the society and divisions within the government itself. In

parallel to those supporting a growing nuclear program, respected voices, for example, Goldemberg (2007), alert about the risks of

Brazil repeating the same flaw experiences with nuclear energy as it happened in the past.

As in the case of UK, there also seems to be a kind of alliance between the Brazilian nuclear industry and part of the academic

community and even many environmentalists. Some scientists lend their support based on the argument that Brazil must keep

developing the nuclear technology for its tomorrow needs. Others just argue on practical topics such as the fact that Brazil has

already spent about US$ 1.0 billion in Agra III (with early acquisition of equipments as well as their annual maintenance costs or

even with early civil works already done) and such investment can only be recovered by indeed building the plant. Yet, the

discussion is still gloomy and the politics seems to prevail over the economics.

According to Eletronuclear (2006), Angra III`s fixed investment cost is estimated at 75 to 80 US$/MWh. Then, supposing the plant

working with utilization factor higher or equal to 80%, the total cost is estimated at 90 to 100 US$/MWh (such estimates based on

fuel cost projected at 15 to 20 US$/MWh). The next nuclear facility in Brazil should have slightly higher costs (approximately 100

US$/MWh for fixed investment cost and 120 to 130 US$/MWh for total cost). However, by expecting growing economy of scales

and scope as well as increased learning process, Eletronuclear suggests that the costs of the nuclear plants should decline overtime

as a large-scale nuclear program is put in place.

Those figures must be compared to other power options in the country. For example, according to the so called CCEE (2007) (the

CCEE is the Brazilian Electric Power Commercialization Chamber, which is a not-for-profit organization in charge to carry out and

settle the wholesale transactions in the Brazilian power system. It operates as a Clearing House for the electricity transactions), the

First Auction for alternative energy in Brazil took place in June, 2007, when approximately 30TWh from small hydro and biomass-

fired power facilities were commercialized at average prices ranging from 68 to 71 US$/MWh. About US$ 2 billion of new

contracts were signed among 38 companies participating in the Auction (19 small hydropower producers; 19 thermal producers;

and 17 buyers). Near 640 MW of new installed capacity were contracted (15% coming from small hydro facilities – with contracts

extending over 20 years -; and 75% based on biomass-fired plants – with contracts extending for 15years). One shall expect this

Auction, which aimed to promote more costly alternative energy, indicating a kind of ceiling price for new power in Brazil. Angra

III would hardly be able to win any contract in this competitive bidding.

Besides, the Brazilian power system is characterized by two different sub-markets. In the free market, independent consumers as

well as generators and marketers can liberally negotiate contracts in competitive terms. Moreover, consumers` unexpected demands

must be covered by acquisitions on a kind of spot market (also orchestrated by CCEE). In the regulated market, the utility

companies hold monopoly rights for electricity distribution and marketing, supplying captive consumers in specific geographic

areas. After having estimated their future needs, the utilities must annually buy electricity from authorized suppliers through

auctions promote by CCEE. The totality of the foreseeable market must be covered by competitive acquisitions in which the

winning suppliers in each auction will offer the smallest prices. The buyers must sign up power purchase contracts (3 or 5 years in

advance) to anchor the new generators, which will have to assume financial commitments to obligatorily build the plants. The

utilities can also buy with one year in advance from existing generators. Moreover, very marginally, aiming to cover unforeseeable

demands up to 1% of the total load, the utilities make use of Adjustment Auctions promoted by CCEE.

In 2007, the fourth CCEE`s Auction for new power registered transactions totaling 171.5 TWh (equivalent to almost US$12 billion

in revenues) with prices ranging from 67 to 70 US$/MWh. In this auction, only thermal plants burning fuel oil presented winning

proposals. The fifth Auction for new power was initially cancelled by the government and then rescheduled to the end of September

and mid-October 2007. The fifth Adjustment Auction registered no transaction. In any case, Angra III would probably have failed

to offer the most competitive price in the last auctions organized by CCEE, which eventually highlights that the Brazilian utilities

are still not prepared to turn towards the nuclear energy.

Yet, the perspective of a tighter electricity market is increasing in Brazil. As far as the electricity demand is concerned, the

Brazilian economic growth in 2007 and 2008 is expected to be larger than initially previewed. According to IBGE (2007), the

Brazilian GDP increased 5.4% in the second quarter of 2007 as compared to the same period in 2006. Such result is the largest

economic expansion registered since the second quarter of 2004. It seems that Brazil is resuming a sustainable and strong economic

growth. As a consequence, the electricity demand is also expected to grow with higher annual rates. On the other hand, the

perception of risk regarding the future electricity supply is rising. The availability of gas for new power generation is not at all

certain. Petrobras has been announcing the construction of at least two LNG terminals aiming to supply the existing gas-fired

power stations that currently cannot be dispatched due to the lack of gas supply. Yet, it is not clear how competitive those power

stations will be by burning much more expensive LNG rather than the domestically produced gas. As far as the new hydropower is

concerned, the government has mainly focused on two major projects (Santo Antonio and Jirau), which is supposed to be built on

the Madeira River in the Bacia do Amazonas. Those plants should add up to 6.4 GW of new capacity by 2012, requiring total

investment estimated at US$13 billion. Nevertheless, everything related to those plants seems to be ambiguous, from their

environmental licensing, which was approved, but also imposed many restrictions, the additional costs of which still must be

assessed, up to the political, economical and engineering challenges. The projects are expected to be driven primarily by the state-

owned Eletrobras, which still has to come up with sounding financial solutions for them.

Given the anticipate growth of electricity demand and the difficulties to guarantee additional power supply for the future, the

electricity price in Brazil experiences a rising trend. According to Comerc (2007), from January to June, 2007, the total electricity

demand in the free market increased by 3.2% vis-à-vis the same period in 2006. The large independent consumers paid, over the

first semester of 2007, an average electricity price ranging from 75 to 80 US$/MWh. In total, 676 companies (large industries in the

great majority) have operated in the free market and may have jointly saved, over the same period, approximately US$ 1 billion in

comparison to what they would have otherwise paid (more than 100 US$/MWh) for the same electricity in the regulated market.

Based on those numbers, the independent consumers should be very much interest to revisit Angra III as an option for their future

secure electricity. Yet, such more market-driven scenario, where large private consumers would anchor the construction of Angra

III by signing up long-term power purchase agreements with Eletronuclear is far from realism.

It may sound weird that consumers with outsized perception of risk vis-à-vis an eventual new electricity shortages, and willing to

secure the future electricity supply, are not prepared to assume risks and tie their energy future to nuclear power. Indeed, it is a very

intricate problem. The two most relevant points seem to regard: (1) the real energy cost one may expect from Angra III; and (2) the

risk of delays in delivering the promised power. The past history of the Brazilian nuclear industry does not help to create a

perception of high reliability on nuclear. In the past, Brazil struggled with tremendous technological difficulties in building Angra I

and II, the costs and construction time of which overrun any reasonable expectation. Long delays led to uncontrollable additional

financial costs. Then, high inflation led the government to adopt controls over the electricity prices turning the state-owned energy

companies into insolvency and unable to keep up with their initial construction commitments.

Although the Brazilian economic reality seems much improved as compared to the huge instabilities of the late 1970s and the

1980s, favoring, therefore, long-term projects such as a new nuclear facility, there is indeed a growing feeling of uncertainty

regarding the future behavior of the global economy. The 2007`s increasing volatility in the international financial market is

cautiously seeing as a potential crisis approaching, which can leap the global economy towards a major recession. Such scenario

would significantly cool down the growing rhythm in the global as well as the national electricity consumption. Consequently, the

Brazilian industrial sectors as well as the electricity utilities may not seem to be geared up to backup a major long-term

commitment supporting the construction of Angra III.

In addition, the Brazilian consumers seem not to rely on Eletronuclear`s ability to deliver the electricity from Angra III just in time

and in tune with their eventual needs. Such low confidence may firstly arise from observing Eletrobras` last failures on delivering

formerly pledged new power. As shown in Figure 5, Eletrobras` announced investment plans in the last years did not fully

materialize. In 2005 and 2006, the private investments overcame in respectively 68% and 120% Eletrobras` actual investments. The

apparently absence of private developers willing to promote Angra III’s construction does not help to increase the reliance in the

project.

Figure 5 – Historical investments in Energy (in R$ billions)

Eletrobras Private Sector

Planned (or expected) Actual

Source: Instituto Ascende Brasil (2007)

Furthermore, there seems to be a general perception that Eletronuclear and the Brazilian nuclear industry as a whole have actually

lost their expertise in managing large scale projects. The state company counts upon a small group of high skilled operational

professionals. The more senior staff, which has lived the real experience of building Angra I and II, retired. There has not been a

continuous process of transferring the past experiences to the juniors entering the company. Eletronuclear no longer commands the

necessary independent knowledge to solve more intricate problems that often surprise those construction works. In fact, even for

the operation of Angra I and II, the company is often obliged to call upon the Brazilian research centers to find specific expertise to

solve technical problems. Whenever those problems cross beyond the competences of those research centers, Eletronuclear must

appeal to foreign contractors.

As seen above, in the last CCEE`s auction, only the oil-fired plants won and signed 15 years-long contracts with the electricity

utilities. The easier construction guarantees that those plants can come in operation without delay. The fuel availability is also just a

minor issue. Those variables seem to have been decisive for those plants to thrash any potential attempt from Eletronuclear to

participate and win the necessary contracts to justify Angra III’s construction in sounding economic basis. Yet, as the crude oil

price continues escalating beyond 80 US$/barrel in the international market, the fuel cost of those thermal plants will skyrocket

beyond the 150 to 200 US$/MWh, i.e. much higher than Angra III’s expected total cost. In other words, by choosing oil-fired

plants rather than nuclear power, both the consumers and the generators will have to face important additional costs if those plants

operate with high utilization factor. Such decision sounds peculiar in an economic environment characterized by potential

shortages, rising prices and insecurity of supply, which can all lead to a more intense use of those thermal plants.

In fact, the oil-fired plants are proving to be more competitive to operate within an environment marked by growing uncertainties

and in tune with the dominant hydro system. They are only supposed to work in critical moments. They will probably be the last

units to be dispatched. Such picture is very Brazilian specific. The nuclear reactors can never operate in the same way. They are

fitted to match the demanded base loads, having, therefore, to compete with the hydropower (both the existing and the projected

new hydro plants). As the whole electricity system in Brazil is still operating with low utilization factor, the competitive room for

thermal plants willing to operate with very low utilization factor as well increases. On the other hand, base-load-related thermal

plants such as nuclear reactors have to face tremendous competitive disadvantage.

Imposing the construction of Angra III (or even a large nuclear program) based on politics rather than on the above economic

reality will help the whole hydro system to retain more water during the dry seasons, reducing, therefore, the risks of eventual

shortages in the future. Nevertheless, it will equally decrease the average utilization factor in the hydro system, augmenting,

therefore, the likelihood of wasting water in the raining seasons. In the long term, the hydro system will operate with higher average

water level, increasing eventually the flows of water over the dams. Such policy can definitively reduce the risks of electricity

shortages, but it also drives the country into a poorer management of its natural resources as well as a substantial worsening in the

economic allocation of long-term capital. Any definition of sustainability may be lost when the available hydropower must be

wasted and the consumers must pay for more costly nuclear energy.

Indeed, the Brazilian decision to revival the nuclear energy should not be just a political issue. The construction of Angra III does

not seem to be the most appropriate icon for anchoring the launch of a New Nuclear Program aiming to the future. As highlighted

by Goldemberg (2007), the decision of building Angra III seems to be incorrect for several reasons. In first place, it will not help to

solve the eventual electricity supply crisis that one might fear to be configuring for 2009 or 2010. Most optimistically Angra III will

only begin to operate in 2013. The construction works may likely take another 10 years to be ended. Therefore the non-delivery of

a pledged large amount of new energy can expose the system to even higher risks. Besides, Angra III, even assuming

Eletronuclear’s expected costs, is definitively not competitive with other more attractive options such as hydropower and biomass-

fired (as well as oil-fired) thermal plants. On top of that, the figures proposed by Eletronuclear were not submitted to inclusive

independent analyses, which could appropriately validate them and give them more credibility. The Brazilian nuclear industry

presents long tradition of low transparence, which usually leads to miscalculations clearly aiming to underestimate costs. Finally,

the vowed environmental benefits declared by the nuclear community internationally will contribute very a little to reduce the

greenhouse gases emissions in Brazil. If the government is, in fact, concerned in reducing the Brazilian carbon emissions, it should

rather focus on reducing deforestation and forest burning, as well as on improving the management of agro-business-generated

residues and the use of vehicular-fuels in the transportation sector.

As in the USA and other countries, the Brazilian current difficulties to keep increasing limitlessly its power sector shall be revisited

before even starting thinking about Angra III or any other major New Nuclear Program. Brazil needs to evolve through a

tremendous and painful restructuring of its electricity demand in order to improve the final use of electricity, including a major

reduction in the thermal uses of electricity. By promoting abundant, but less cost-effective, nuclear power and recreating an energy

scenario based on excess of electricity supply, Brazil may just postpone, again and artificially, the major changes its energy matrix

urgently requires. Yet, given the current uncertainties regarding the expected role that nuclear energy may play in the future as well

as the interesting opportunities Brazil can take advantage of at the present, it might be interesting to think about different

approaches for a Brazilian New Nuclear Program. Rather than focusing on an early development of Angra III, a New Nuclear

Program really aiming to the future should primarily centers the attention on the technological aspects, developing the domestic

nuclear expertise. The nuclear technology is achieving new edges with new generators being conceived for the next decades. Brazil

does not need to lead the global effort in developing those new technologies. The country can, in fact, substantially benefit from

letting the others make the inevitable and expensive mistakes in developing the new generation of nuclear reactors (more safety,

reliable and cost-effective).

The Brazilian Environmental Ministry alleges that the nuclear energy still involves high risks with not yet solved environmental

issues related, for example, to the nuclear waste disposal. Many scientists would not completely agree with that argument saying

that the technologies are available and currently operate with acceptable safety level. In Angra I and II, only temporary solutions

have been adopted for waste disposal. The life cycle of those solutions can still be extended for another decade or so. However, no

major expansion of nuclear power can stand upon those precarious solutions. Brazil has to start thinking about the definitive

measures for the final disposal of its nuclear waste. This engages not only technical expertise, but rather a tough social discussion.

Finding a final repository for the nuclear waste is a major political issue, which Eletronuclear will have to face. Moreover,

Eletronuclear must still achieve long-term adequate performance on Angra I and II, before the company can convince the society

about its competence to well manage (with safety and reliability) a larger nuclear program.

The nuclear industry suggests that building up Angra III is necessary to allow Brazil to keep pursuing the development of nuclear

technologies aiming to fully command the uranium fuel cycle. As seen in Figure 6, very few countries detain the full command of

the nuclear fuel cycle. Brazil`s first attempt to enter such restrict nuclear club took place in the 1970s with the blemish agreement

with former-West Germany, which left very few fruits beyond Angra II. The domestic excellence is actually centered at IPEN (the

Institute for Energy and Nuclear Researches in Sao Paulo) and CTM/SP (the Navy’s Center for Nuclear Technology in Aramar, Sao

Paulo). In Figure 7, it is shown that those institutions developed the domestic technology outside the former Nuclear Program with

Germany. Brazil already dominates the whole technology behind the nuclear fuel cycle, including the enrichment of uranium.

However, some steps still have to be accomplished abroad. Additional investments would make it possible to internalize in the

country all the still lacking activities.

Figure 6: Figure 7:

Source: URANIUM INFORMATION CENTRE Ltd.

Source: ELETRONUCLEAR

As shown in Table 5, the NEP2006 projects two scenarios, self-sufficiency and exporting, for the Brazilian nuclear fuel cycle by

2030. It should be Brazil’s main objective to integrate and foster all its acquired competences towards the full control of the

uranium cycle. Yet, integrating industrial and military activities into just one lucid and articulate program also involves major

political negotiations, especially in the definition of priorities and setting up the budgets. In an open and democratic debate, the

most strategic decisions should be prioritized to receive the public investment. According to the Brazilian Navy, by investing

another US$ 250 million in its research centers, Brazil could already have the full access to the uranium cycle by 2010.

Nevertheless, the government keeps reducing the Navy’s budget and Brazil’s major nuclear research centers find themselves in an

almost calamity. It is hard to believe that Angra III is the best strategy for Brazil to keep pace with the development of the nuclear

technology.

TABLE 5: Expected scenarios for the Brazilian uranium cycle projected to 2030

Scenarios: Self-sufficiency Exporting

URANIUM RESERVES (*)

< 130 US$ / Kg Ur

Measured and Inferred

500 thousand tons of U3O8

Measured and Inferred

1 million tons of U3O8

MINING & MILLING

To U3O8 – YELLOW CAKE 2 thousand tons of U3O8 + 3 thousand tons of U3O8

CONVERSION

To UF6 - Gas uranium

hexafluoride

2.5 thousand tons of UF6 + 3.75 thousand tons of UF6

ENRICHMENT

To SWU – Separative Work

Unit

1 thousand tons of SWU 1.5 thousand tons of SWU

(*) In 2007, Brazil measured and inferred uranium reserves totaled 309 thousand tons of U3O8 representing the 6th

world largest.

Those reserves can sustain 35 GW of installed capacity operating with utilization factor equal to 85% during 40 years.

Potential reserves are estimated at 800 thousand tons of U3O8.

Source: NEP2006 – EPE

The nuclear industry sustain that Angra III is essential to create the critical domestic demand for enriched uranium to support the

construction of Brazil`s first commercial uranium enrichment plant. However, the enriching activity is far from being a competitive

business. Brazil should not really care about the initial poor economic perspective of its first uranium enrichment facility. As far as

Angra I and II are concerned, Eletronuclear (2006) estimates that doubling the fuel cost might have a minor effect (only a 2.5%

rise) in the total generation cost. Such difference can be easily rearranged by internal negotiations between Eletronuclear, Furnas

and the Federal government. In fact, the leading aspect should be to achieve the self-sufficiency in enriched uranium and boost the

security of fuel supply for those plants. Regarding Angra III, as already seen, its poor economics has nothing to do with the fuel

cost. It is unacceptable the argument that Angra III, which requires billionaire investments, is taken as a precondition to justify the

construction of a much less-costly enrichment plant.

Developing the full uranium cycle at industrial level, rather than Angra III, should receive the main investments, including eventual

subsidies. Then, Brazil must decide whether enriching uranium just for its domestic purposes or eventually even for exports given

its availability of uranium reserves as well as a potential growing market for enriched uranium. However, important barriers still

need to be overcome for that strategy to be executable. The most critical obstacle is to find the financial resources to maintain and

foster the Brazilian nuclear intelligence. For that, the country needs to look at the future and propose credible and feasible projects,

for which the support can be obtained close to the public opinion.

The New Nuclear Program should rather focus on technological developments for naval applications of nuclear energy. The

Brazilian Navy has been spending too long time and too much effort to build Brazil`s first nuclear submarine. The naval nuclear

reactor will find broader and more useful applications in the future merchant marine, reducing Brazil`s exporting and importing

costs by diminishing the oil-dependence in the naval transportation sector. The use of nuclear energy in the naval transportation

sector seems to be a much more realistic policy. About 30% of the total generated energy is transformed into final useful energy in

the big engines of large merchant vessels. Then, starting from the development of the naval nuclear engine, Brazil can gradually

conceive the most appropriate technology for a true national nuclear power reactor, which better expresses the future energy needs

of the country.

Finally, the New Nuclear Program should be seen as an integration effort from Brazil towards its neighboring countries. In 1953, in

a speech delivered by President Dwight D. Eisenhower at the United Nations, the USA launched the “Atoms for Peace” program as

a visionary initiative to bring the civilian applications of nuclear energy close to less developed countries. It was under the auspices

of this program that Brazil was supplied with its first research reactor, entering the nuclear era. Today the USA is highly focused on

international terrorism and the Iraq war. The Bush administration has made little efforts to build up strong links with South

America. The void left by the USA in the region allows Brazil to come up with new joint strategic alternatives to develop with the

neighbouring nations. Brazil should be prepared to support the expansion of peaceful uses of nuclear energy in the region. A kind

of “Atoms for a Latin Peace” should be inspired, encouraging the countries of the region to reaffirm the “non-proliferation of

nuclear weapons” principle, and helping the less privileged nations to get access to pacific uses of nuclear energy, helping them to

finance and construct their own research reactor. Moreover, the Brazilian nuclear naval engine should be developed in partnership

by countries that share similar challenges.

Conclusion

Not a single new nuclear facility is in construction in the major western countries, but nuclear power seems to be back as a public

favourite. All the changes described throughout the paper sound like music for an industry that spent more than 20 years

restructuring procedures, improving operational and environmental standards, reducing costs and expanding markets mainly

eastward. The nuclear industry appeared organized, very well articulate and ready to harvest long-awaited fruits. In spite of that, the

pending uncertainties continue important. It is impossible to develop a better judgement on how such more positive moment will

turn into real, profitable and competitive investments in nuclear energy.

One shall never forget though that each nation has its own energy particularities, priorities, legislation and capabilities, resulting

ultimately in different needs and opportunities for the nuclear energy. The paper provided an overview on Brazil`s New Nuclear

Program and discussed topics that are crucial for a better understanding of Brazil actual demand for an early revival of nuclear

power generation. No anti-nuclear position was previously conceived and the authors do not believe any energy technology should

be ruled out on ideological basis. Yet, the arguments here presented do not favor a position pro-nuclear per se. The text is

definitively against the construction of Angra III and/or the launch of an even more aggressive nuclear program in Brazil. For the

world, pushing nuclear policy seems to be a wise policy. For Brazilians, with so many other energy opportunities available for the

power industry, the eagerness to have a sounding nuclear power program is just foolish.

But nuclear energy is not only producing electricity. Brazil should seek to develop a new consensus on enabling expanded use of

nuclear energy to meet other growing demands. More competitive and cost-effective naval transportation is an essential tool for a

country developing a fast rising exporting industry mainly focused on agricultural, industrial and agro-business commodities. Many

decades ago, after the World War II, when nuclear energy flourished as the most promising energy source the human beings have

ever touched, the immediate use of this new energy was on naval vessels whose size rapidly increased at the same time as the global

economy boomed. The nuclear technology then leapfrogged from the naval uses to the power sector where it found its most fertile

soil to grow up in size and sophistication. The paper proposes that Brazil should look backward at history of nuclear energy in

order to eventually find its own path toward a new future.

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