Liquid Growth – Brazil


June 2004

Electricity grids fail to reach many of the rural regions of Brazil and farmers are restricted to growing crops in the six-month rainy season. A local company, Village Ambiental, saw the potential connection between the demand for irrigation and appropriate technology to supply water – solar powered pumps. However, they needed working capital and conventional finance institutions were reluctant to back a new business. The Brazil Rural Energy Development (B-REED) initiative came to their assistance in increasing crop yields and making good business sense.

Brazil: environment

Perhaps the most striking thing about Brazil is its size. By all measures, Brazil is large. Physically its 8.5 million square kilometres sprawl over almost half the South American continent and, excluding only Alaska, it is as big as the United States. São Paulo, the capital, is the second most populous city in the world. Despite the number of people that it is home to, Brazil’s immensity means that – outside the cities – the country is very sparsely populated. The Amazon rainforest is, however, being logged and settled at a rate that is alarming from an environmental point of view.

At 6275 km, the Amazon is the longest river in the world. To put matters in a global context, a rapidly dwindling 30 per cent of the remaining forest in the world lies along its banks in Brazil. It is not just Amazonia that is subject to environmental destruction, however. Deforestation, desertification, poaching, air and water pollution, and other man-made problems threaten many of Brazil’s myriad species of flora and fauna. For what it is worth, though, Brazil is signatory to international agreements on Biodiversity, Climate Change, including the Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes and Tropical Timber.

Economy

The 1990s saw Brazil with a stable currency and attracting record foreign investment. The country is blessed with abundant natural resources. Its economy is easily the biggest in Latin America and constitutes a major factor in the global marketplace. On the other side of the coin, however, around two million jobs were lost between 1989 and 1996. Moreover, strife over agrarian reform persisted in Brazil’s extremely stratified society. In 1996, Brazil was deemed by a United Nations report to have the most unequal distribution of wealth of any country in the world.

In the new millennium, Brazil’s economy is once more on the path of growth, at least in terms of measures such as Gross Domestic Product (GDP), though these typically reveal nothing about, for example, social justice or environmental destruction. Perhaps 50 million Brazilians still live below the poverty line. There are immense problems with overcrowding in town and cities with a third of the inhabitants of Rio de Janeiro and São Paulo living in ‘favelas’ (slums). Meanwhile, rural areas suffer the twin scourges of landlessness and environmental degradation.

Though corruption is rife throughout Brazilian society, the 2002 election of ‘left-winger’ Luíz Inácio da Silva promises to bring some relief to country’s poorest while, hopefully, not deterring investment in the economy. ‘Lula’, as the President is affectionately known, has promised to reform the problematic tax system, tackle state bureaucracy and continue to fight inflation. More tellingly, his stated ambition is to end hunger in Brazil. This simple-sounding task may prove impossible to achieve, however.

Brazilian campesino at work (courtesy of Kerry A. Olson)
Brazilian campesino at work (courtesy of Kerry A. Olson)

Nowadays, although agriculture has slipped to contribute only 8 per cent of GDP in Brazil, in a pattern familiar in the developing world, it employs over half the workforce. Important agricultural products still include coffee and sugar cane, as during three centuries of colonial rule, plus soya beans, wheat, beef, rice, corn and cocoa.

Energy Supply

Apart from oil, the imports that Brazil depends most heavily upon are machinery, vehicles, electrical equipment and chemical products. Most of the nation’s electricity, around 83 per cent, is generated from large hydropower schemes. Brazil is, nevertheless, obliged to import some 10 per cent of its total electricity requirement. In addition, despite it huge reserves, Brazil uses more oil than it produces and the nation is also a net importer of natural gas. Overall, Brazil is burdened by a huge external debt and receives substantial international aid.

Rural Areas and Solar Power

In many rural areas Brazilians do not have access to mains electricity and other services. For farmers this means a limit on the produce they can grow, imposed by their restricted access to pumped water for irrigation. Of course, there are technologies available that are suited to meeting electricity demands in rural areas. Because the so-called developing countries are largely found in the South, especially the tropics, one of the most suitable sources of energy is the sun.

Administrative regions of Brazil (courtesy of Doug Holmes)
Administrative regions of Brazil (courtesy of Doug Holmes)

By this token, the Mato Grosso region of Brazil has enough sunshine to meet many of its electricity needs all year round. Photovoltaic (PV) cells connected and assembled into panels or modules, and thence erected in ‘arrays’, can provide power for water pumping, lighting, refrigeration, telecommunications and numerous other tasks. PV systems can provide a reliable source of electricity at the site where the power is required. There are, therefore, virtually no power losses or costs associated with transmission. Moreover, PV systems are environmentally friendly, producing no pollution, carbon dioxide, noise, odour or heat.

Solar powered irrigation

Theoretically, the maximum solar energy that can arrive at the earth’s surface is around 1 kilowatt per square metre (kWm-2). In practice, all sites receive something less than this figure. As the name implies, photovoltaic (PV) cells change sunlight to electricity. PV cells are made of materials dubbed semiconductors, usually silicon. Generally, they are made to have a diameter of around 150 mm. Simply put, light as photons – quantities of electromagnetic energy – strike a PV cell and cause electrons in the silicon to be energised. When the electron energy exceeds a certain level a potential difference comes to exist across the cell and current flows. The product of potential difference or voltage and current is power. The power produced is direct current (DC) but, if required, to convert it to alternating current (AC) merely requires passing it through a device called an inverter, though inevitably some energy is lost in the process.

PV panels are usually rated in terms of peak watts (Wp), which is the power the panel would produce with 1 kWm-2 irradiance at 25°C. A PV irrigation system usually comprises a calculated number of solar panels, a DC pump and some form of controller to ensure a steady power output. The most commonly used system features a submerged motor and pump set, which is efficient and easy to install. Such systems can be used to pump water from a river or raise it from a borehole. Apart from ease of installation, the advantages of PV irrigation systems are that they are have a long life and require little maintenance. The main disadvantages are the quite high investment cost and the need for water or power storage to cover periods of insufficient sunlight (insolation). In terms of cost, however, solar pumping compares increasingly favourably with diesel engine systems.

When designing any irrigation system, notice must be taken of the variation in demand for water through the year. A trickle or drip irrigation system is the most efficient and suitable for use with solar pumping. It is usually wise to incorporate water storage for a number of days into a PV irrigation system. Where regions are subject to a rainy season, rainwater harvesting (in other words, collection and storage of rainwater) is a compatible technology that can offset the reduced output to be expected from the PV powered pump during this time.

Renewable Energy for Village Farmers

Many of Brazil’s rural people depend on small-scale agriculture for their livelihoods. In the outlying villages of the Mato Grosso region there is no mains electricity grid and little chance of connection in the foreseeable future. Irrigation technology that could help increase food production and cash crop yields is therefore unavailable to small-scale farmers. They are restricted to growing during the rainy season and struggling for their very survival for most of the remaining six months of the year.

Entrepreneur Roberto Emilio Lopez was aware of the demand for water and – through solar power – the potential means to satisfy that demand. In 1999 he founded Village Ambiental, a company dedicated to supplying and maintaining renewable energy systems in remote areas, particularly to provide power to village farmers.

Finance

Roberto had almost everything in place to make his enterprise work: a proven demand, appropriate and available technology, and the know-how to install and maintain solar systems. The missing ingredient, though, was finance. Although small-farm-size solar irrigation systems have what would conventionally be regarded by economists as a very short and so favourable payback period, Roberto did not have the working capital necessary to offer credit to his potential clients. With conventional finance institutions unwilling to help, Roberto instead approached E+Co, managers of the B-REED fund in Brazil. Speedily appraising the viability of Roberto’s proposal and assisting him to prepare financial plans and proposals, E+Co were able to offer Village Ambiental a loan.

Following in the footsteps of the African Rural Energy Enterprise Development (AREED) initiative, The Brazil Rural Energy Enterprise Development (B-REED) aims to help rural populations in Brazil to meet their energy needs. B-REED makes available seed capital for small enterprises that promote renewable energy in remote areas. Working with local NGOs allows B-REED to build on their knowledge and experience, while concomitantly helping to develop their capacity. Moreover, B-REED actively encourages Brazilian finance institutions to invest in renewable energies by backing local entrepreneurs and rural enterprise. With funding from the United Nations Foundation (UNF), the partners involved in B-REED include the United Nations Environment Programme, The Danish Risoe Centre on Energy, Climate and Sustainable Development (URC), Brazilian NGO Instituto Eco-Engenho (IEE) plus, obviously, renewable energy investment company E+Co.

The B-REED approach offers businesses working in the field of sustainable energy access to enterprise development services and seed funding. Thereafter, B-REED prepares businesses to approach mainstream financers with solid plans and proposals. Working closely with government and NGOs, B-REED also facilitates the integration of sustainable energy technologies into communities and local markets. The overall aim is to demonstrate to public and private sector investors the benefits of backing clean local energy enterprises. These benefits include meeting the demand for energy in remote areas while protecting the environment. Moreover, new enterprises and access to energy facilitate education, employment and sustainable livelihoods, breaking the cycle of poverty that persists in Brazil.

A Solar Success Story

As an example of Village Ambiental’s venture and B-REED financing, the first farmer to install a solar irrigation system under the scheme repaid her loan within two years. The investment cost of US$4,000 can be compared with the annual cost of agricultural inputs, US$2,300, and the income from produce sold, US$9,000. Even to the least astute financial eye, installing a solar irrigation system evidently offers a good return on investment and makes sound business sense. Villagers in Mato Grosso are actually investing agricultural profits in additional solar systems to provide electricity to their homes. Perhaps, in the wake of the B-REED initiative and such successes, the conservative finance institutions in Brazil will wake up to the potential benefits to all concerned that can be gained from small-scale renewable energy schemes for village agriculture.

Acknowledgements

Thanks particularly to B-REED for supplying information to the author of this case study, Kelvin Mason

Further Information

Brazil Rural Energy Enterprise Development (B-REED) www.b-reed.org

United Nations Environment Programme (UNEP) www.unep.org/energy

E+Co www.energyhouse.com

United Nations Foundation (UNF) www.unfoundation.org

Risoe Centre on Energy, Climate and Sustainable Development (URC) www.uneprisoe.org

Solar Power & Irrigation

Practical Photovoltaics: Electricity from solar cells, Richard J. Komp, Chelsea Green Pub Co, 2002

Modern Irrigation Technologies for Smallholders in Developing Countries, Gez Cornish, ITDG Publishing, 1998

Brazil

The Masters and the Slaves: A Study in the Development of Brazilian Civilization, Gilberto Freyre, University of California Press, 1987

The World is Burning: Murder in the rain forest (the Chico Mendes story), Alex Shoumatoff, Little Brown, 1990

Breakfast of Biodiversity: The truth about rainforest destruction, Vandana Shiva et al., Institute for Food and Development Policy/Food, First Books, 1995

Lonely Planet Brazil, Mitchell Schoen et al., Lonely Planet Publications, 2002

Resources

ITDG Technical Briefs answers.practicalaction.org

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