Green Building Report by U.S. Commercial Service in Brazil
The U.S. Commercial Service in Brazil (CS Brazil) is working closely with the Green Building Council Brazil in order to help Brazil to promote sustainable construction.
Actually, CS Brazil took, from November 12-16, 2012, an official delegation to the Greenbuild Conference & Expo, held in San Francisco, CA. The delegation, formed by 35 members, included the Green Building Council Brazil, engineers, architects, realtors, large contractors and government officials.
Also, CS Brazil participated at Green Building Council Brazil’s annual Conference and Expo, held in Sao Paulo in September 2012, and collaborated with the Brazil-U.S. Business Council in two “Export Green” Trade Missions, in 2011 and 2012.
Lucas Sant'Anna is a guest writer of the Brazil-U.S. Business Council and practices law in Brazil, as a senior associate, at the Infrastructure Department of Machado Meyer Advogados. He has an extensive experience in advising foreign companies in Public Tender Processes and Government Contracts in Brazil. Legal background: Faculdade de Direito da Pontifícia Universidade Católica de São Paulo (LL.B., 2004), Columbia University School of Law, New York, NY, USA (Master in Laws – LL.M., 2010). Worked as an International associate at Simpson Thacher & Bartlett LLP, New York (2009).
By Maureen Hinman, International Trade Specialist in the International Trade Administration’s Office of Energy and Environmental Industries
In the past few years, Brazil has experienced an upwelling in drinking water and sanitation infrastructure investment that is driving rapid growth and development in the sector. The swift transformation of the Brazilian water technology market has resulted from a confluence of federal policy, budgetary prioritization of water and sanitation infrastructure investments, and engagement of private sector investors, developers, and operators through public private partnership (PPP) models.
The water and sanitation sector in Brazil is marked by diversity in both the scope and size of projects. Brazilian contracts over the past several years have ranged from water and waste water treatment plant expansions, operation and services contracts, to green-field water and wastewater plant build-outs. From this level of diversity comes great opportunity for U.S. businesses interested in expanding into the Brazilian water technology and services market: between 2010 and the present, the Global Water Intelligence Public Private Partnership tracker* has listed a variety of projects collectively valued at over $12 billion.
The renewed emphasis on water and sanitation is predicated on the Lula da Silva administration’s development and implementation of Brazil’s first federal water and sanitation law in 2007 (Lei 11.445/07 para o saneamento básico). The law establishes universal access to water and sanitation as a governmental priority; sets standards for water supply, sanitation, and solid waste management; and considering Brazil’s social and ecological diversity, allows for adoption of methods that take into account regional environmental demands and the ability of users to pay for service**. These new water and sanitation standards have been coupled with a federal push for investment in infrastructure. In 2007, President Lula da Silva introduced the the Program for the Acceleration of Growth (PAC), investing $235 billion in transport, energy, water, and sewage infrastructure. Now in its second phase, the PAC calls for $16.6 billion in federal water and electricity investments between 2011 and 2014*** .
However, the success of the Brazilian water sector in rapidly deploying projects of such a vast scope and scale has been enabled by its ability to embrace a variety of financing, ownership, and operation models that mobilize private capital while simultaneously maintaining focus on customer service and affordibility as articulated in the national law. Diversity in water and sanitation models is inherent to the Brazilian system which is decentralized among Brazil’s 5,560 municipalities (3,887 of which have agglomerated into one of 26 state water and sewer companies). Nearly every model of ownership and finance have been employed including fully public state utilities, stock market capitalized utilities, and pubic to private concessions****. São Paulo’s Sabesp is even listed on the New York Stock exchange.
As Brazil’s sector continues to develop diverse models in project scope, finance, structure, and ownership these new models will continue to foster open opportunties for U.S. water technology and service providers.
** Baptistelli, S.C., and E.B. Marcelino. "The regulatory issue of outfall discharge in Brazil." International Symposium on Outfall Systems, May 15-18, 2011. Mar del Plata, Argentina: Companhia de Saneamento Básico do Estado de São Paulo – SABESP, 2011. 2-3.
*** Canuto, Otavian. "Growth and Crisis Blog." World Bank Institute. March 30, 2010. http://blogs.worldbank.org/growth/brazil-announces-phase-two-growth-acce... (accessed March 27, 2012).
**** World Bank Group. Sustaining Water for All in a Changing Climate: Brazil Case Study. Implementation Progress Report of the Water Resources Sector Strategy, Washington: World Bank Group, 2010.
by Ross Eisenburg, Counsel for the Environment, Technology, and Regulatory Affairs Division at the U.S. Chamber of Commerce
By all accounts, 2012 will be a difficult year to move energy legislation, thanks to deep political and ideological divides in the Congress and the looming Presidential election. One area that might have a chance, however, is energy efficiency. The Chamber has been searching for relatively simple, straightforward, cost-effective policies that might be able to generate enough support from both sides of the aisle to make it to the President’s desk.
There are a few good ones out there. The SAVE Act is one of them. The “Sensible Accounting to Value Energy Act,” or SAVE Act, introduced by Senators Michael Bennet (D-CO) and Johnny Isakson (R-GA) updates the underwriting and appraisal process for federally-backed mortgages to take into account energy costs, i.e., how much it costs to heat or cool a home. The U.S. Chamber supports the SAVE Act, which would provide homebuyers a more accurate representation of their monthly home ownership costs and incentivize homeowners to make energy efficiency upgrades because those incremental costs would positively affect the value of the home. Such investments would turn drive consumer demand for energy efficient products and services—in other words, creating jobs while saving energy. Most importantly, the SAVE Act does this without requiring massive, billion-dollar outlays from the federal government.
The SAVE Act has a very diverse group of supporters, including not only the Chamber but a wide range of manufacturing, green building, real estate and environmental groups. You can learn more about it at http://www.imt.org/save-act.
During President Obama’s first state visit to Brazil in March of 2011, he and President Rouseff formally initiated the US-Brazil Joint Initiative on Urban Sustainability to serve as a platform for demonstrating the economic, environmental, and public health benefits of greener urban environments.
This bilateral initiative, led by US EPA Administrator Lisa P. Jackson and Brazilian Minister for the Environment Izabella Teixeira, is charged with mobilizing investment in green infrastructure, highlighting innovative projects for visibility and investment, and creating a global model for building green economies and smarter cities in the US, Brazil, and around the world. By enabling positive market conditions and supporting investments in urban sustainability, the JIUS will be responsible for engaging communities to find locally-relevant and inclusive urban sustainability solutions, working with the international financial sector to develop options that shift investment practices to link more explicitly to improved measurement of sector-specific environmental and health outcomes, and creating a replicable template for project evaluation that can help to spur more strategic and innovative urban investments around the world.
Over the next 6 months, leading up to Rio+20, the JIUS focus on identifying green technology, products and services in the waste and stormwater management, clean-up, waste-to-energy, and green building sectors, among others. These projects will be highlighted in the JIUS final product, a green economy “cookbook”, intended to help match project developers and communities with financing for short- and long-term implementation of city-scale investments in urban sustainability.
For more information on the US-Brazil Joint Initiative on Urban Sustainability and to highlight innovative urban sustainability solutions from your company, please contact Elle Beard at the US EPA (202-564-7723; firstname.lastname@example.org).
by Andrew S. Bennett, Smart Grid Industry Analyst and International Trade Specialist, U.S. Department of Commerce: International Trade Administration
In Latin America’s largest country, the small-scale approach often doesn’t cut it. And when it comes to the Smart Grid, Brazil is, of course, going big.
Like many nations around the world, Brazil is setting out to replace traditional electric meters with smart meters that will enable two-way communications and expanded functions that could have a dramatic impact on improved energy efficiency for utilities and their customers.
Brazil’s goal: replace every household meter by 2021.
Brazil’s smart grid plan is one of the most ambitious in the world, but this type of big thinking is not out of step with the nation’s larger environmental and investment goals. The future host of the next World Cup and the 2016 Olympic games plans to have world class infrastructure in place by the time the world arrives in 2016. At the same time, Brazil has set ambitious environmental goals of reducing carbon emissions to 2005 levels or better by 2030.
The timely deployment of the smart grid in Brazil will be a critical component to the country’s efforts to meet both its infrastructure and environmental goals. In the United States, where smart grid deployments are moving forward in many states, the full deployment of the smart grid is predicted to reduce power demand by about 20%.
Both the public and private sectors in Brazil are aware of the smart grid opportunity and its benefits. That’s why the state-run utilities holding company, Centrais Elétricas Brasileiras SA (Eletrobrás),announced plans to double its yearly investment in grid modernization beginning in 2012. Meanwhile, the Brazilian Electricity Regulatory Agency (ANEEL) is moving to develop the necessary regulatory framework to enable the procurement and deployment of smart meters, which will generate billions more in investment over the next decade.
In fact, Brazil is expected to be one of the world leaders in smart grid investment over the next 20 years, behind only China, the United States, and India. With both Brazil and the United States pursuing ambitious deployments with the promise of great benefits to their citizens, the smart grid stands to become another important opportunity for collaboration between the two countries.
Such high levels of growth in the energy sector in the United States and Brazil was one of the factors leading to the development of the Strategic Energy Dialogue (SED), announced in a joint statement by President Obama and President Rousseff in March 2011. The Department of Energy and the International Trade Administration have since been working to make U.S./Brazilian cooperation through the Dialogue a reality.
In August 2011, Deputy Secretary of Energy Daniel Poneman held a series of high-level meetings and engagements with major energy stakeholders in Brazil, including his SED counterpart Dr. Márcio Zimmermann, Executive Secretary of Brazil’s Ministry of Mines and Energy. In a speech in Sao Paulo, Deputy Secretary Poneman stressed that the Dialogue “will explore ways to work together to develop safe, secure and affordable energy resources and will be an important mechanism that guides our collaboration on a wide range of energy issues,” including oil and natural gas, biofuels and renewable energies, nuclear energy, and energy efficiency.
“There are also tremendous opportunities for collaboration that will help both of our countries to use less energy by reducing the energy wasted in our homes, businesses, and factories,” the Deputy Secretary said.
And he noted that “none of the government efforts will succeed without the robust participation of the private sector. Indeed, the private sector will make or break our collective efforts to build a new, dynamic, clean energy future.”
It was with these goals-- improving energy efficiency and integrating the efforts of the private sector-- that the International Trade Administration’s Assistant Secretary for Manufacturing and Services, Nicole Y. Lamb-Hale, joined the Export Green Trade Mission to Brazil just weeks after Deputy Secretary Poneman’s speech.
Along with 14 green technology companies, Assistant Secretary Lamb-Hale visited Sao Paulo, Rio, and Brasilia, to further engagement between the governments of the United States and Brazil on energy issues while supporting the development of partnerships between U.S. and Brazilian companies in the smart building and energy efficiency industries.
Progress towards reaching big goals in smart grid and throughout the energy sector continues in Brazil.
The Brazilian government is working hard to develop the policy and regulatory framework that will incentivize energy efficiency. Through initiatives like Export Green, U.S. companies will help deliver the technology solutions necessary to achieve its big ambitions in smart grid, energy efficiency, and across the growing economy.
Renewable resources power over 85% of Brazil’s electricity supply, the vast majority of which is hydroelectric power. Brazil is taking steps to further diversify its energy portfolio by investing in wind power. In 2002, the Brazilian government provided incentives for alternative energy production through PROINFA (Programa de Incentivo a Fontes Alternativas de Energia Elétrica), a program aiming to reduce greenhouse gas emissions by improving the share of electric energy generated by wind, biomass, and small hydro plants. These incentives boosted wind energy production from 22 MW in 2003 to over 1 GW today, and production will continue to rapidly grow in the future. Brazil’s total technical potential for wind energy is 143 GW, most of which lies on the coastline.
Wind energy auctions have also been effective in promoting the development of wind power. In December 2009, ANEEL (Agência Nacional de Energia Elétrica) hosted the country’s first wind-only auction, contracting 71 wind energy projects for a total capacity of 1,800 MW. A second auction in 2010 resulted in contracts for an additional 50 projects that would generate over 1,500 MW. Brazil’s national bank BNDES (Brazilian Development Bank) has agreed to help finance projects from foreign developers if the companies agree to build manufacturing plants in Brazil.
By ratifying the Kyoto Protocol in 2002, Brazil joined global efforts towards the reversal of global warming. Though Brazil currently ranks seventh in greenhouse gas emissions, the government has shown commitment to creating a “greener” economy. The government has planned for 10 GW of wind energy to be in place by 2020, placing a high demand for turbine manufacturers and wind energy developers. Foreign companies are undertaking most of these wind projects, and U.S. manufacturers can capitalize on this emerging wind market.
Brazil’s energy consumption grew by nearly 8 percent last year and will continue to grow with Brazil’s economy in the near future. With aspirations of creating a more energy-efficient economy, Brazil has invested $204 million of federal stimulus grant money in smart grid development. As the smart grid develops, the use of energy-efficient and smart products will thrive in Brazilian homes and businesses.
The electricity grid in Brazil will begin its modernization in a project that will begin in 2012 or early 2013. Brazil’s energy regulator ANEEL will replace typical electricity meters with smart meters, allowing consumers to monitor their daily and monthly energy bills. ANEEL plans on installing 63 million smart meters by 2021, but this is only the first phase in the plan. After incorporating solar and wind energy into the grid, smart appliances will be incorporated into the system. Car chargers, washers, dryers, refrigerators, air conditioners, and a wide range of other products are being developed to save energy during peak cost times. Many of these appliances can be monitored and controlled remotely, allowing consumers to manage their home’s power system from phones and computers.
The Brazilian smart grid system is not fully developed yet, but energy efficient products are already in high demand. As the residential construction market is booming, energy-efficient windows, lights, and a wide range of energy-saving home goods are being installed across the country. Products which promote the efficient use of water, including specialized shower heads, toilets, and faucets, are also popular and quite useful in areas where water supply is highly variable. Brazilian consumers will be looking to save energy and money in many ways; opportunities in the energy efficiency sector are essentially limitless.
In 2007, the Brazilian government established national guidelines for basic sanitation, including clean water supply, sanitary sewage, urban-cleaning services, solid waste management, and rainwater management. The law states that these services must be provided in ways which are consistent with public health standards and protect the environment.
Brazil is currently a large market for green building, and it is continuing to grow. With 23 LEED projects complete and 245 in process, Brazil is fifth in the world for projects in the process of LEED certification, following China, the United Arab Emirates, the U.S., and Canada. One of the main drivers for green building in Brazil is the prestige associated with a certified green building in the commercial real estate market.
To assist green building, regulations have been set in place to affect federal buildings in Brasilia along with federally-funded Olympics projects in Rio, World Cup-related projects, and low-income housing around the country. The Tribunal das Contas has interpreted government procurement legislation to allow environmental factors to be assessed in awarding projects in public tenders. Subsequently, the Ministry of Planning has begun to develop a body of new regulations to govern the purchasing of products with a low environmental impact for all federal building projects. This includes water use, utilization of renewable energy resources, building material with low environmental impact, etc.
Opportunities in the area of technology include: energy efficiency solutions (hardware and software), controls (e.g., water use), sensors, and meter devices. Opportunities in the area of services include: engineering and design (in partnership with local construction firms) and remote-delivery monitory and control. São Paulo holds the largest section of opportunity with 66%, followed by Rio de Janeiro with 13%. The LEED type with the largest opportunity is commercial with 49%.
Renewable energy is a continuously growing area of research around the world, and even more so in Brazil—allowing for many market opportunities for U.S. companies. There are still many opportunities for U.S. companies in renewable energy generation, a sector growing at 18% annually, driven largely by the wind, solar, and biomass sectors.
Already over 47% of Brazil’s energy comes from renewables—significantly higher than the world average at 13%. Moreover, Brazil’s electricity generation matrix is already clean, with 85% hydroelectric. Brazil holds the world’s third largest hydro potential, and its potential is estimated to be about three times its current capacity, allowing room for expansion.
Brazil’s energy consumption has been increasing over recent years and is expected to continue. With this increase, it is expected that there will be new demands for electricity, so Brazilian utilities are currently working to transform the grid to make it smarter. Brazil is increasingly investing more in smart grid, which will allow easier integration and higher penetration of renewables.
While a Smart Grid offers great potential, there are a few drawbacks with incorporating renewable energy. Renewable energy such as hydro, biomass, and wind, will present challenges when integrating them into the grid. The grid was designed for one-way power flow, so a smarter grid will be needed to help integrate renewable energy into the grid.
The market for Green Technology has many opportunities for expansion in Brazil. Companies that engage in Green Technology are able to participate in different areas, such as green construction, clean energy, and energy efficiency. With the World Cup in 2014 and the Olympics in 2016, there are numerous market opportunities to expand to Brazil.
Outside the upcoming games, there are other major projects underway. One of these opportunities is the renewal of the Port area-Porto Maravilha, in Rio. This is a partnership between the municipal, state, and federal governments and the private sector that plans to revitalize and redevelop a large area of the Rio port district for residential and commercial purposes. Part of this area will be LEED certified as well. Another project is the “Museum of Tomorrow”, a project by Santiago Calatrava. It will include exhibitions dedicated to environment-friendly technologies, and it will also be built according to sustainable practices.
For the mega-events, it is the Federal Government’s goal to make the World Cup “green”, and the Brazilian National Development Bank, BNDES, is developing programs to assure that projects related to it will be done according to sustainable/green trends. Various soccer organizations such as the Brazilian Soccer Federation and the International Soccer Federation, FIFA, are recommending that existing and new stadiums should be LEED certified. Of the twelve cities, three have stadiums already registered for LEED.
The Brazilian Olympic Committee, COB, said that all new facilities would be LEED certified with the help of Green Building Brazil, GBC. Following green practices extends to Olympics sports venues as well as the Olympic Village, the press/broadcasting centers, and all other Olympic-related facilities. Green practices are related to other environmental aspects of the games as well, such as the Guanabara Bay clean-up program and the sanitation program of lagoons in the Barra da Tijuca area.
There are various other areas in which projects are underway for both the World Cup and the Olympics, transportation being a large focus. These projects include the Bus Rapid Transportation and many others. They will include environmentally-friendly technologies such as low vehicle carbon emissions and the implementation of selective collection and garbage management programs.