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BRAZIL

(updated on Dec. 2006¹)

1.  ENERGY, ECONOMIC AND ELECTRICITY INFORMATION

1.1.  General Overview

Brazil is a federal republic in South America, bounded on the north, west and south by every country of the continent except Chile and Ecuador, and on the east by the Atlantic Ocean, along 7,400 km (4,600 miles) of coastline. The country covers an area of 8,514,215.3 km², about half of all South America, and is the world's fifth largest country in area. In 2006, the population of Brazil was about 188.7 million corresponding to a population density of 22.3 inhabitants per km². The predicted population growth rate from 2002 to 2010 is 8.6%. Most Brazilians live in high-density areas of eastern Brazil or along the coast or the major rivers. Today, about 84.7% of the people live in urban areas. The historical population information is shown in table 1.

TABLE 1. POPULATION INFORMATION

 Source: World Bank World Development Indicators

The single most important influence on Brazil's climate is its location on the equator. Temperatures seldom exceed 35°C in the tropics owing to the moderating effects of high atmospheric humidity. Most of Brazil receives a moderate rainfall of 1,000-1,500 mm (40-60 in), although the Amazon lowlands and several other areas receive more than 2,030 mm (80 in) of rainfall annually. The semi-arid northeastern interior, or "Sertao", frequently suffers from very long droughts. Tropical rain forest, or "Selva", is found in the wettest part of the Amazon Basin. Much of the south and southwest of Brazil is covered by savanna, or tropical grassland, and in the interior of the northeast, caatinga, a low and bushy scrub and thorn forest is characteristic.

Brazil's three major river systems are: the Parana-Paraguay-Plata in the south, the Sao Francisco in the east, and the Amazon in the north. The Amazon, the major river of South America, is the world's second longest river (6,440 km/4,000 miles), and most of its basin lies within Brazil. The Amazon river's major tributaries are the Tocantins-Araguaia, the Madeira, the Negro, the Xingu and the Tapajos.

According the World Bank World Development Indicator, in 2006, the Gross Domestic Product (GDP) was 1,067,962.0 millions of current US$ and the GDP per capita was 5,659.7 current US$.

TABLE 2. GROSS DOMESTIC PRODUCT (GDP)

Source: World Bank World Development Indicators

Brazil has one of the largest hydroelectric potential in the world. The hydro resources located in the north-east, south-east and south of the country have already been thoroughly surveyed. The hydroelectric potential of north and central west regions, which cover practically Brazil's Amazon area, are being tapped to partially meet both regional and national electric needs. Brazilian estimated energy reserves are shown in table 3.

TABLE 3. ESTIMATED ENERGY RESERVES

(*) Sources: 20th WEC Survey of Energy Resources, 2004 and Uranium 2005: Resources, Production and Demand ("Red Book")

(1) Coal including Lignite: proved recoverable reserves, the tonnage within the proved amount in place that can be recovered in the future under present and expected local economic conditions with existing available technology                 

(2) Crude oil and natural gas liquids (Oil Shale, Natural Bitumen and Extra-Heavy Oil are not included): proved recoverable reserves, the quantity within the proved amount in place that can be recovered in the future under present and expected local economic conditions with existing available technology

(3) Natural gas: proved recoverable reserves, the volume within the proved amount in place that can be recovered in the future under present and expected local economic conditions with existing available technology

(4) Reasonably Assured Resources (RAR) under < USD 130/kgU

(5) Hydropower: technically exploitable capability, the amount of the gross theoretical capability that can be exploited within the limits of current technology

Source: IAEA Energy and Economic Database

Historically, the expansion of the energy sector represented a dynamic aspect on the process of industrialization and modernization of economic and social structures in Brazil. This expansion has provided the energy needed for this process and has stimulated the development of productive sectors. During the last decades, Brazilian development was mainly induced by the State's direct action. Table 4. shows the historical energy statistics.

TABLE 4. ENERGY STATISTICS

1.2.  Energy Policy

At the end of the 1990s, the Brazilian energy sector faced deep changes evolving two different fronts: (i) the privatization of state owned electric companies (nuclear generation and power transmission were not included); and (ii) the restructuring of electric sector as a whole (deregulation). The government has decided to focus the role of the state on policy-making and market regulation, phasing out its previous involvement as owner of the major economic agents.

In that context, the Federal Government created two agencies responsible for regulation and inspection of the electricity sector - Brazilian Electricity Regulatory Agency (ANEEL) and the oil and gas sector - National Agency for Oil, Natural Gas and Biofuels (ANP).

The main objectives of the national energy policy are orientated to: (i) conservation and efficient use of energy, (ii) expansion of oil production and electric power supply, (iii) realistic pricing policy, (iv) efficiency of energy production systems, (v) private enterprise participation, (vi) use of renewable energy resources; and (vii) technical innovation. Further comments on energy policy will follow in section 1.3.

1.3.  The Electricity System

General description

Up to early 1960's, the Brazilian electric utilities had no central co-ordination. Operation and planning activities were limited to independent utility requirements, resulting isolated or poorly integrated systems. Rapid growth in industrialization led to an inter-regional integration creating expansion opportunities for the electric companies outside their geographical areas. This integration gave rise to increased supply reliability and provided great benefits due to economy of scale.

In 1962, federal government established a holding company, ELETROBRAS, with the objectives of organizing, co-ordinating and planning all activities of the sector at the national level. ELETROBRAS is attached to the Ministry of Mines and Energy. ELETROBRAS is an open corporation with shares negotiated in the domestic and overseas capital markets. At that time, it co-ordinates the whole electricity sector concerning the technical, financial and administrative aspects. ELETROBRAS is the major shareholder of the federal companies and is a minor shareholder in the state-owned companies. ELETROBRAS is also the main shareholder of ELETRONUCLEAR, the Brazilian nuclear utility.

A large generation company, ITAIPU Binational, was founded in 1973 by Brazil and Paraguay to manage the ITAIPU hydropower plant of 12,600 MW capacity located at the border of both countries. The majority of the energy produced by ITAIPU is consumed in Brazil market and is transmitted from there by two different transmission systems: a direct current (+- 600 kV) and a high voltage one in alternative current (750 kV).

As of December 1996, the Brazilian electricity sector comprises 62 organizations: 4 companies of the ELETROBRÁS System (ELETRONORTE, CHESF, FURNAS and ELETROSUL), 27 state utilities associated to ELETROBRÁS and 31 public and private utilities (Table 2). The four companies of the ELETROBRAS System were included in the privatization process in 1996, but only the control of the generation of ELETROSUL was sold out. At that time, the federal government was responsible for electricity generation in the north and northeast regions through two federal monopolies: ELETRONORTE and CHESF. In the remaining regions, the ELETROBRÁS System competed in the generation activities with state-owned utilities. The most important of these state-owned companies were Companhia Energética de Minas Gerais (CEMIG) in the Minas Gerais State; Companhia Energética de São Paulo (CESP) in São Paulo; Companhia Paranaense de Eletricidade (COPEL) in Paraná and Companhia Estadual de Energia Elétrica (CEEE) in Rio Grande do Sul. Four vertically integrated state-owned utilities are responsible for 30% of the available energy.

During the second half of the 90's, the government launched a privatization program for the generation and distribution sectors of the electric power system aiming to gather funds to reduce public debts and at same time decreasing the presence of state in activities where private enterprise could be more efficient. There were 35 state and municipal distribution companies/utilities responsible for distribution under public service concessions, covering all 26 states and the Federal District of the country. Today, 80% of these previously state-owned distribution companies are owned by the private sector due to this privatization program.

In February 1999, shares of Eletricidade e Serviços S.A. (Elektro) were offered to the public. This company resulted from the separation of the distribution part of CESP. Enron International, the controlling stockholder in Elektro, purchased the shares. Controlling stakes in the generation companies, resulting from the separation of Companhia Energética de São Paulo (CESP), Paranapanema and Tietê, were also sold. In 1999, the U.S. Duke Energy Corporation acquired the company Cia. de Geração de Energia Elétrica Paranapanema and the U.S. AES (Applied Energy Services, Inc.) acquired the company Cia. de Geração de Energia Elétrica Tietê.

Electricity generation and transmission have been operated by ELETROBRAS subsidiaries, which have been partly privatized, and some of the state-owned utilities within the geographical limits of the states. The states have a mix of state and privately owned companies for the distribution of electricity. The exception is the state of Tocantins, recently founded, where electricity is supplied by a private utility. The national electrical transmission grid had, at the end of 2005, 83,049 km of lines between 230 kV and 750kV.

Due to several reasons, the privatization process has been slowed down after year 2000 and some of the large state-owned utilities are no longer in the privatization process. About 75% of the generating capacity in the country is still government owned.

TABLE 5. PRIVATE AND STATE-OWNED ELECTRICITY GENERATION COMPANIES

Electricity generation and consumption

Brazilian electric system presents as its main peculiarities a large extension of transmission lines and an electricity generation system predominantly hydraulic. Consumer market (54.5 millions of units) is concentrated in the more industrialized South and Southeast regions of the country. North region is supplied mainly by small generating plants, the majority being thermoelectric (oil).

Tables 6 and 7 show the more relevant data concerning Brazilian electricity production and installed capacity. Electricity output in 2005 amounted to 400.6 TWh - 92.5 % originated from hydroelectric sources, 5.1 % from fossil fuelled plants and 2.5 % from nuclear plants. Electricity consumption per capita increased from 1,653 kWh in 1990 to 2,049 kWh in 2005 and the nuclear energy share over the total electricity production increased from 1% to 2.5% during the same period.

During the last decade, residential, rural and commercial electricity consumption has had an expressive increase, however the industrial segment experienced a much lower growth mainly due to the use of more efficient technologies and rationalization measures imposed to the use of electricity.

TABLE 6. ELECTRICITY PRODUCTION AND INSTALLED CAPACITY

TABLE 7. ENERGY RELATED RATIOS

Deregulation, open electricity market and decision making process

The reform of the Brazilian Electric Sector began in 1993 with the enactment of Law 8.631 which extinguished the equalization of the tariffs that were in effect and created supply contracts between generators and distributors, and which was enhanced by the enactment of Law 9.074, dated of 1995, that created the Independent Producer of Electric Power and the concept of Free Consumer.

In 1996 the Restructuring Project for the Brazilian Electric Sector was implemented (Project RE-SEB), coordinated by the Ministry of Mines and Energy.

The paramount conclusions for the project were the need to implement the deverticalization of the electric power companies, that is, to split them up into the generation, transmission and distribution segments, to incentivize competition in the segments of generation and commercialization, and to keep the segments of distribution and transmission of electric power under regulation, considered to be natural monopolies under control of the State.

The need to create a regulating agency was identified as well (Brazilian Electricity Regulatory Agency - ANEEL), to create an operator for the national electric system (National Operator of the Electric System - ONS), and an ambience to accomplish electric power purchase and resale transactions - the Wholesale Market for Electric Power (MAE).

Having been concluded in August of 1998, the RE-SEB Project defined the conceptual and institutional frame of the model to be implemented for the Brazilian Electric Sector.

In 2001, the electric system underwent a serious supply crisis which culminated in a electric power rationing plan. This event generated a series of questionings about the course the electric sector was taking. Purporting to adapt the model being implemented, the Committee for the Revitalization of the Electric Sector Model was instituted in 2002, whose work resulted in an agglomerate of change proposals for the Brazilian electric sector.

During the years of 2003 and 2004, the Federal Government set the bases for a new model for the Brazilian Electric Sector, supported by Laws nos. 10.847 and 10.848, dated of March 15, 2004, and by Decree no. 5.163, dated of July 30, 2004.

The Brazilian Power Sector

The New Model establishes a number of measures to be followed by the Agents, such as a requirement for distributors and free consumers to contract for their entire demands; a new methodology to calculate physical coverage of power sale contracts; a way of contracting for hydro and thermal energy so that it is assured a better balance between supply cost and safety; a permanent supply safety monitoring structure to detect possible imbalances between supply and demand.

Distributors have to purchase electricity at the regulated contracting environment through least-price auctions, in order to minimize the acquisition costs of electricity to be passed on to the tariffs of captive consumers.

The New Model also includes social insertion initiatives, by promoting the universalization of access and use of electricity to those citizens who do not enjoy this benefit yet, as well as by ensuring subsidies to low income consumers so that they can bear the costs of their power bills. These initiatives are to be funded by the Energy Development Account (CDE).

2.  NUCLEAR POWER SITUATION

2.1.  Historical Development and Current Nuclear Power Organizational Structure

2.1.1.  Overview

In 1970, a decision was made to build Brazil's first nuclear power station through an international bid. The contract of a turn-key project for a 626 MW(e) PWR reactor (ANGRA 1) was awarded to Westinghouse Electric Corporation of the United States of America. ANGRA 1 construction started in 1971, and the first criticality was achieved ten years later.

In 1975, in an effort to become self-sufficient in nuclear power generation, Brazil signed an agreement with the Federal Republic of Germany to build eight 1,300 MW(e) reactors (PWR Biblis B type) over the period of 15 years. Under this agreement, two of these units (ANGRA 2 and ANGRA 3) were scheduled for construction on the following year with most of their components imported from Kraftwerk Union's (KWU) shops in Germany. According to this agreement, the rest of the plants were to contain 90% Brazilian-made components. The Brazil-Germany agreement created the Empresas Nucleares Brasileiras (NUCLEBRAS) as the Brazilian stated-owned nuclear holding company. Additionally, several subsidiaries (joint companies) were established to achieve nuclear technology transfer from Germany (see Table 8).

The Brazilian nuclear regulatory body is the National Nuclear Energy Commission (CNEN), responsible for licensing nuclear power plants and nuclear facilities; performing regulatory activities; and training and organizing personnel, according to the Law 4,118 of 1962. In the early 1980's, the Brazilian Navy started a nuclear propulsion programme. The Navy's main activity has been the development of uranium enrichment by using ultracentrifuge process. Success was achieved by the end of the decade, which has continued through the 1990's.

TABLE 8. NUCLEBRAS SUBSIDIARIES

Due to several factors (especially financial problems) the Brazilian-German technology transfer programme was forestalled. ANGRA 2 and ANGRA 3 construction was interrupted several times, resulting in further delay in Brazilian nuclear programme. Due to Brazil's foreign debt and high inflation with added pressures from privatization programme and budget cuts, the Brazilian nuclear programme was reorganized at the end of the 1980's.

In 1988, a new company, Indústrias Nucleares do Brasil SA (INB) replaced NUCLEBRAS and its subsidiaries, with limited authority. INB became responsible for rare earth's, mining of nuclear minerals and yellow cake and nuclear fuel production assuming FEC, NUCLEMON and CIPC activities. FEC, renamed as Nuclear Complex of Resende, was transformed in an INB Directorate. Both INB and NUCLEP, responsible for heavy equipment fabrication, became CNEN's subsidiaries. However, both companies, INB and NUCLEP, report directly to the Ministry of Science and Technology and are administratively independent from CNEN. Responsibility for the construction of nuclear power stations was transferred to the state-owned utility, FURNAS/ELETROBRAS, incorporating NUCON activities. NUCLEN was maintained responsible for nuclear power plant architect and engineering.

In 1997, the architect engineering company NUCLEN, merged with the nuclear directorate of FURNAS, an utility responsible for the bulk supply of electricity of the most developed region of Brazil. The new company named ELETRONUCLEAR - ELETROBRAS Termonuclear S/A. is responsible for design, procurement & follow up of Brazilian and foreign equipment's, management of construction, erection and commissioning of nuclear power plants and is the sole owner and operator of nuclear power plants in the country. Siemens sold its 25% holding in NUCLEN to ELETROBRAS when ELETRONUCLEAR was formed. NUCLEI and NUCLAM were disbanded.

2.1.2.  Current Organizational Chart

The organizational structure of Brazil's nuclear sector and the relationships among different organizations are shown in Figure 1. The National Nuclear Energy Commission (CNEN), is the regulatory body, which reports to the Ministry of Science and Technology ( MCT ). The Brazilian Electricity Company (ELETROBRAS), responsible for planning and co-ordinating all activities of the electrical sector at national level, is under the Ministry of Mines and Energy. The remaining organizations are discussed in the following sections.

2.2.  Nuclear Power Plants: Status and Operations

2.2.1.  Status of Nuclear Power

Hydroelectric power plays a paramount role in the Brazilian electricity system while thermal power plants (conventional and nuclear) are lower contributors to national electricity supply. The status of the Brazilian NPPs is shown in Table 9.

The ANGRA 1 nuclear power plant located between Sao Paulo and Rio de Janeiro, has a net capacity of 626 MW(e). It started commercial operation in December 1984. During the period of 1985-1989, the plant experienced two unscheduled outages due to problems on the main condenser and emergency diesel electric generator.

TABLE 9. STATUS OF NUCLEAR POWER PLANTS

Construction of ANGRA 2 nuclear power plant began in January 1976, but due to financial problems the construction of the unit has slowed down and was several times halted. The economic recovery of the second half of the 90's led to the acceleration of the unit's construction. This reactor became critical on July 14, 2000. On July 21st, 2000, at 10:16 pm, ANGRA 2 was synchronized for the first time to the Brazilian interconnected electrical grid. ANGRA 2 trial operation (a test phase of continuous operation at a 100% power level) was successfully completed on December 2000.

The third nuclear station (ANGRA 3), a 1,309 MW(e) PWR reactor and similar to ANGRA 2, was acquired to Siemens/KWU together with ANGRA 2. ANGRA 3 has about 70 per cent of the design work completed and 70 per cent of the imported major equipment already manufactured and stored on site. The civil works and electro-mechanical assemblies' activities were postponed in 1991. ELETRONUCLEAR and several independent consulting firms developed technical and economical feasibility studies for ANGRA 3, which were submitted to government authorities. An authorization to re-start the construction works is under consideration at the CNPE (National Council of Energy Policy).

2.2.2.  Performance of NPPs

ANGRA 1, since December 1984, has operated at full capacity, in several occasions, when it was necessary. In March 1993, the plant experienced problems with some fuel rods. It resumed energy production in December 1994. From 1994 on, the performance of ANGRA 1 followed a more reliable path, reaching its generation record in 1999, 3,976.9 GWh, with an availability factor of 96%. since then, the plant has been operating above 90% of its nominal capacity In July, 2002, the National Electric Power Agency approved the new installed capacity value of 1,350 MW for ANGRA 2. ANGRA 1 and ANGRA 2 play an important role in the reliability of the southeast electric system (predominantly of hydro origin) assuring continuous electric power supply to the states of Rio de Janeiro and Espírito Santo where local water resources are virtually exhausted and power supply depends on long transmission lines. In 2005, ANGRA 1 and ANGRA 2 generated 9,852.9 GWh, with load factors of 64.8 and 51 %.8, respectively. The operating experience of ANGRA 1 and 2 is given in Table 10a and 10b.

TABLE 10a. OPERATING EXPERIENCE OF ANGRA 1

TABLE 10b. OPERATING EXPERIENCE OF ANGRA 2

2.3.  Supply of Nuclear Power Plants

Two companies related to nuclear power plant engineering and component supply are active at the nuclear sector: NUCLEP and ELETRONUCLEAR - ELETROBRAS Termonuclear S/A.

NUCLEP was established to design and fabricate heavy nuclear power plant components, especially those used in the reactor primary circuit. NUCLEP is specialized on fabrication of large components made from alloy steels, nickel alloys and titanium alloys. It maintains modern quality control laboratories, outfitted with precision instruments, qualified and certified according to international standards, for mechanical, chemical and metallurgical testing.

ELETRONUCLEAR is responsible for design, procurement & follow up of Brazilian and foreign equipment, management of construction, erection and commissioning of nuclear power plants and is the sole owner and operator of nuclear power plants in the country.

2.4.  Operation of Nuclear Power Plants

ELETRONUCLEAR is the only utility responsible for construction and operation of Brazilian nuclear power plants ANGRA 1 and 2. The ANGRA site has a PWR/ANGRA 2 type simulator in operation since 1985. The simulator has provided operator-training services for utilities from countries such as Spain, Switzerland, Germany and Argentina, which operate nuclear power plants supplied by KWU.

2.5.  Fuel Cycle and Waste Management

Indústrias Nucleares do Brasil S.A. - INB, a state company which has succeed NUCLEBRAS, has as its main goal the implementation of industrial units related to nuclear fuel cycle for nuclear power plants. Nowadays, there are in Brazil industrial units for: uranium mining and milling, isotopic enrichment, reconversion, pellets production and fuel elements assembling. The mineral exploration program carried out in the last decades resulted in the discovery of new deposits that projected Brazil to be the sixth geological resources in the world, responsible for 11% of that total. It should be taken into account that only 25% of the Brazilian territory has been prospected.

Mining and milling

Systematic prospecting and exploration of radioactive minerals in Brazil began in 1952. The exploration was accelerated by the availability of funds for this purpose from 1970 onwards. There was active exploration and many occurrences were identified through the use of geological, geophysical and geochemical surveys, and related research. From 1974 to 1991 the total amount spent in uranium exploration was equivalent to US$ 150 million. With changes in nuclear policies and, consequently, uranium requirements, investments fell sharply. Since 1991, all uranium prospecting has stopped.

Brazilian uranium resources occur in a number of geological environments and, consequently, belong to several deposit types; some of them hosted in near surface. In addition to known resources, there is a high potential for further discovery of economic uranium deposits. Areas favourable for uranium resources not yet explored covers 50% of the Brazilian territory.

Brazil has been producing uranium since 1982. Between 1982 and 1995 the cumulative uranium production was 1,030 tU from the Poços de Caldas Unit and 540 tU from the Caetité Unit, the only commercial plant currently in operation. Since March 2000, Brazilian short term uranium concentrate production capability has been 400 tU/year.

Expansion of milling capacity on Caetité to 670 tU/year has been studied. After the planned expansion of Caetité, INB will concentrate on the development of Itataia deposits. However, since uranium will be a co-product of phosphate, the feasibility of the project depends mainly on the phosphate market. Direct employment in Brazilian uranium industry is raising. Losses caused by closure of the Poços de Caldas Unit were offset by increases associated with beginning operation and planned expansion of Caetité Unit.

The uranium production in Brazil is only for domestic use. All uranium concentrate produced is shipped to other countries for conversion and enrichment and then returned to Brazil for fuel fabrication. One shipment of uranium concentrate was carried out in June 2001, including an amount of 73 tU and four shipments were carried out in 2002 totalling an amount of 466 tU.

Brief information on main uranium sites is given below:

a) Poços de Caldas Site

The Poços de Caldas Site is located at one of the biggest alkaline intrusions in the world. Discovered in 1948; this deposit was developed into an open pit mine. Poços de Caldas Unit started production in 1982 with a design capacity of 425 tU/year.

Since the exploration of the uranium deposit was no longer economically feasible, the Poços de Caldas Unit ceased operations in 1995. After two years of standing by, it was finally shut down in 1997. The closure planning and rehabilitation actions are still under development.

The closure of Poços de Caldas Unit in 1997 brought to an end the exploitation of a low grade ore deposit, which produced vast amounts of waste rock. Studies for proper decommissioning are being conducted by INB. The operational costs of collecting, pumping, and treating acid drainage were estimated to be US$ 610,000 per year. With the end of the mine exploitation, INB proposed the use of industrial facilities for other projects such as the monazite chemical processing and rare earth production. For these activities, an environmental license adjustment was signed and the licensing process at CNEN is on going.

b) Lagoa Real Site (Caetité Unit)

Caetité is currently the only operating uranium site in Brazil. The deposits were discovered in 1977 and its known resources were estimated to be 85,000 tU at the below US$ 80/KgU cost category averaging 0.30% U3O8. There are 35 occurrences detected, 12 of which were considered uranium ore deposits. Cachoeira deposit is mined by open pit methods. Surface acid heap leaching methods are used. Plant has a design capacity to produce 400 t/year of uranium concentrate and there are plans for expansion.

Mining activities, decommissioning planning, and area rehabilitation are done simultaneously. Monitoring programs are implemented to demonstrate compliance with regulatory requirements. As part of the regulatory licensing process, INB has done an independent hydrogeological assessment of the local aquifer.

Feasibility studies for Caetité Unit expansion have been carried out. The expansion will increase annual production capacity, which will double current production levels. The cost of expansion is estimated to be US$ 3.5 million.

c) Itataia Site

Discovered in 1976, Itataia deposits account for almost 50% of the total known low cost resources in Brazil. A radiometric aerial survey identified 273 anomalies on the project area. The deposit is suitable for open pit mining with uranium recovery estimated at 70%.

Conversion

As part of Brazilian Navy nuclear propulsion programme, a UF6 pilot plant with a nominal production capacity of 40 tU/year is under construction at the Navy Research Institute (CTMSP), located in Iperó (100 Km from São Paulo). There are no plans to install a commercial plant in the near future.

Enrichment

As part of its nuclear propulsion programme, the Brazilian Navy installed in Iperó (100 km from São Paulo) a demonstration enrichment centrifuge pilot plant. Subsequently, the Brazilian Government decided to start an industrial plant in Resende, Rio de Janeiro, using the technology developed by the Navy. The first cascade was inaugurated in May 2006 and the complete set of cascades is intended to be in operation in five years, in order to partially meet the ANGRA 1 and ANGRA 2 needs. A future increase of the capacity will depend on technical evaluation and financial resources availability.

Fabrication

The Nuclear Fuel Factory (FCN) is located at Resende, state of Rio de Janeiro, comprising three units, e.g. UO2 powder reconversion, pellets manufacturing and nuclear fuel assembling. The annual capacity for each plant is 160 metric tons for UO2 powder, 120 tons for pelletizing units and 240 tons for fuel manufacturing. The reconversion and pelletizing units started commercial operation in 2000, while the assembling plant is in operation since 1982. The FCN plant also produces components for nuclear fuel, such as top and bottom nozzles, for its own needs and for export. The fuel engineering capacity for supporting the activities of INB has been developed and culminated in the design of a new advanced fuel for Angra 1 reactor, in a joint program with KNFC - Korea and Westinghouse - USA.

Reprocessing

The current Brazilian policy for spent fuel management is the storage at the reactor site. A compact storage rack was installed in ANGRA 1, in 2002, with a capacity of 1,252 fuel assemblies, increasing the storage capacity of the on-site reactor basin. As of December 2005, 586 fuel elements are stored in racks at the on-site reactor basin of ANGRA 1 nuclear power plant. Similarly for ANGRA 2, 357 fuel elements are stored at spent fuel pool.

Currently, there is no decision about the way of final storage of the waste. There are no facilities or studies on reprocessing in the counrty.

Waste management

The National Nuclear Energy Commission, CNEN, is responsible for regulation and final disposal of the radioactive waste. Concerning national legislation, Law 10,308 enacted on November 20, 2001, establishes rules for radioactive waste deposits site selection, construction, licensing, operation, control, compensation, civil responsibilities and warranties.

Brazil signed the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management on October 1997 and deposited the instrument of ratification on February 2006. The First National Report describing the measures taken to implement each of the obligations of the Convention, including description of the policies and practices related to spent fuel management and inventory of related material and facilities was issued on May 2006. This Report is available at http://www.cnen.gov.br/seguranca/seguranca.asp

2.6.  Research and Development

2.6.1.  R&D Organizations and Institutes

Five research nuclear centres have been established for carrying out R&D in nuclear sciences, and engineering. Research reactors, accelerators and several R&D laboratories, including pilot plant facilities, were progressively set up in these centres. These research centres belong to the Directorate of Research and Development (DPD) of the National Nuclear Energy Commission (CNEN) and are listed below:

IPEN (São Paulo/SP) - Institute for Energy and Nuclear Research
- Research Reactors: 2 (one 5 MW/pool type and one zero power reactor/tank type)
- Cyclotron
- Radioisotopes Production (^99mTc; ¹³¹I; ¹²³I; ¹⁸F, etc.)
- Research on fuel cycle and materials; reactor technology; safety; fundamentals; radiation and radioisotope applications; biotechnology; environmental and waste technology.

IEN (Rio de Janeiro/RJ) - Institute for Nuclear Engineering
- Research Reactor: 1 (100 kW, ARGONAUTA)
- Cyclotron
- Radioisotopes production (¹²³I; ¹⁸F, etc.)
- Research on instrumentation, control and man-machine interfaces; chemistry and materials; safety; reactor technology .

CDTN (Belo Horizonte/MG) - Centre for Nuclear Technology Development
- Research Reactor: 1 (250 kW, TRIGA)
- Research on mining; reactor technology; materials, safety; chemistry; environmental and waste technology.

IRD (Rio de Janeiro/RJ) - Institute for Radiation Protection and Dosimetry
- Research on radiation protection and safety; environmental technology; metrology; medical physics.

CRCN (Recife/PE) - Nuclear Sciences Regional Centre
- R&D on radiation protection, dosimetry, metrology and reactors technology.

CRCN-CO (Goiânia/GO) - Nuclear Sciences Regional Centre of the Centre-west
- R&D on underground water and environmental technology.

Besides CNEN's institutes, nuclear R&D activities are also performed in military institutes such as the Navy Technological Center, the Air Force Institute of Advanced Studies and the Army Technological Centre.

2.6.2.  Development of Advanced and New Generation Nuclear Reactor Systems

Brazil has actively participated on the Generation IV International Forum since its beginning until the conclusion of the road map. From that point on, the country became a non-active member.

Brazil has been involved in the IAEA INPRO Project, being a member of the Steering Committee and is presently performing two assessment studies based on the INPRO methodology. The country is also taking part on the IRIS (International Reactor Innovative and Secure) program, a consortium type one aiming at the development of a small-to-medium power (335 MWe) integral type pressurized water reactor. The CNEN's R&D institutes are participating in specific design activities and some matching researches.

2.7.  International Co-operation and Initiatives

Under the sponsorship of International Atomic Energy Agency, Brazil has been participating in many technical assistance programs, advisory groups and symposium meetings. As shown in ANNEX, Brazil has several technical co-operation agreements with many countries to exchange information on the various fields of peaceful uses of nuclear energy such as, reactors technology, materials, nuclear applications in industry, health and environment, nuclear safety and radiological protection, computer codes development and assessment, training, radioactive waste management and radioactive materials transportation.

2.8.  Human resources development

Presently, the human resources of the National Nuclear Energy Commission - CNEN totalizes 2,670 persons, with 1,820 working on nuclear R&D activities. Some other 1,200 professionals hold jobs on the power generation and fuel cycle nuclear industries (Eletronuclear and INB). R&D staff of the National Nuclear Energy Commission is composed of high qualified personnel, with half of them holding university degree and from these 17% are Ph.D and 17% are M.Sc.

3.  NATIONAL LAWS AND REGULATIONS

3.1.  Safety Authority and the Licensing Process

The governmental organization responsible for the licensing of nuclear power plants (NPPs) and other nuclear installations in Brazil is the National Nuclear Energy Commission (CNEN).

The National Nuclear Energy Commission (CNEN), created in 1956, has the mission to promote, orient and co-ordinate research and development in all areas related to peaceful uses of nuclear energy. CNEN comprises three directorates whose responsibilities are:

1. Directorate of Institutional Management (DGI): human resources, administration and information management, financial reporting and control;
2. Directorate of Research and Development (DPD): fuel cycle and materials; reactor technology; radiation utilization and radioisotopes application in health, industry, agriculture and environment; radioisotopes and radiopharmaceuticals production; instrumentation & control and man-machine interface; nuclear safety; nuclear physics and chemistry, etc.;
3. Directorate of Radiation Protection and Safety (DRS): Radiation protection, safety, control and licensing of nuclear power plants and other nuclear and radioactive installations, safeguards and normalization.

In August 1962, with the enactment of Law No. 4,118, a National Policy on Nuclear Energy was established with the Government monopoly of nuclear materials and nuclear minerals.

In the early 1970's, due to the needs of the Brazilian Nuclear Power Programme, nuclear safety standards started to be used. An extensive set of rules and standards, as listed under section 3.2, regulate the nuclear activities in Brazil. CNEN regulatory staff amounts to more than 300 qualified professionals. The regulatory process involves the issuance of five licenses or authorizations as listed below:

• Site Approval;
• Construction Permit;
• Nuclear Material Utilization Authorization;
• Initial Operation Authorization; and,
• Permanent Operation Authorization.

Standard CNEN-NE-1.04 establishes the requirements for the licensing process of nuclear installations. The Initial Operation Authorization is issued after safety analysis approval and for a limited period of time to fulfil other minor information with operational experience. The Permanent Operation Authorization is limited to 40 years. A Periodic Safety Reassessment is conducted every ten years of operation, when the conditions of authorization can be modified or extended. A programme of inspections and audits is implemented and regular meetings with operators are held.

During the operational phase of nuclear facilities periodic safety reports are required. Regulatory safety assessment is conducted by CNEN through the review of the licensee's reports as well as through periodic inspections. On-site resident inspectors are assigned for permanent supervision of operational safety.

In January 1999 a law establishing fees and taxes for license and operating authorization was approved by the National Congress and signed by the President of Brazil (Law 9.765/99). It establishes the fees for a NPP operating license as well as annual fees for operating units. These fees are directed to a special account to be used by CNEN in its licensing and inspection activities.

In 1981, the Environmental Policy Law was promulgated and, from 1983 to 1989, CNEN was also responsible for conducting the environmental licensing of nuclear installations. In 1989, the Brazilian Institute of Environment (IBAMA) was created and designated to conduct the environmental licensing of all installations, including nuclear facilities. CNEN is the co-authority on radiation aspects related to environmental licensing of nuclear facilities. This co-authority role means that a CNEN assessment and review has to be considered in the final decision by IBAMA. These organisations elaborate regulations according to its attributions and fields of competence and follow their implementation.

Concerning public communication, CNEN listen to public concerns and makes available information and standards through internet, distributes printed material, responds to e-mails and participates in professional associations exhibits, meeting and events. CNEN is permanently open for interviews with the media. CNEN participates also in public hearings and meetings whenever invited. Public representatives such as parliamentarians and officers of the Public Prosecutor's Office receive timely and factual answers to all questions.

3.2.  Main National Laws and Regulations

The Brazilian National Congress approves the legislation related to nuclear activities. CNEN's regulations and standards are based on IAEA standards, commonly used by many nations. The main laws and standards used in Brazil are:

• Law No. 4,118: National Policy on Nuclear Energy, 1962.
• Law No. 6,189: CNEN's Set-up as Regulatory and Licensing Federal Authority, 1974.
• Law No. 2,464: Nuclear Sector Reorganization, 1988.
• Law No. 7,781: Revision of Law No. 6,189, 1989.
• Law No. 9,765: Licensing, control and inspection tax for nuclear and radioactive materials and utilities, 1999

CNEN's main national standards are available at www.cnen.gov.br. Among these standards, the following can be mentioned:

• CNEN-NE.1.04: Licensing of Nuclear Installations, 1984.
• CNEN-NN.1.16: Quality Assurance for Nuclear Power Plants, 1999.
• CNEN-NE.1.01: Licensing of Nuclear Reactors Operators, 1979 (under revision).
• CNEN-NN.1.28: Qualification of Independent Technical Supervisory Organisation, 1999.
• CNEN-NE.1.13: Licensing of Uranium and Thorium Mining and Milling Facilities, 1989.
• CNEN-NE.1.14: Operating Reports of Nuclear Power Plants, 2002.
• CNEN.NE.2.01: Physical Protection of Operational Units of Nuclear Installations, 1996.
• CNEN-NN.2.02: Nuclear Material Control and Safeguards, 1999.
• CNEN-NE.2.03: Fire Protection in Nuclear Power Plants, 1999
• CNEN-NE.2.04: Fire Protection in Fuel Cycle Nuclear Installations, 1997.
• CNEN-NE.3.01: Basic Guidelines for Radiological Protection, 2005 (under revision).
• CNEN-NE.3.02: Radiation Protection Services, 1988
• CNEN-NN.3.03: Certification of Qualification of Radiation Protection Officers, 1999.
• CNEN-NE.5.02: Transport Storage and Handling of Nuclear Fuels, 2003

4.  CURRENT ISSUES AND DEVELOPMENTS ON NUCLEAR POWER

4.1.  Energy Policy

Hydroelectric power plays a paramount role in the Brazilian electricity system while thermal power plants (conventional and nuclear) are meager contributors to electricity supply. However, even considering the country's huge hydroelectric potential one can not suppose its plain use due to recent environmental restrictions against the construction of new hydro plants especially those making use of large dams and located in the Amazonian region.. In this context, the new energetic long range plan (PNE - 2030) is considering the possibility of using thermal basis generation including domestic sources as coal and nuclear. The nuclear power plant ANGRA 3 has been included in the middle range electricity plan to be in operation by 2013, but the final decision depends on an authorization of the CNPE.

4.2.  Privatisation and deregulation

As already related, during the years of 2003 and 2004, the Federal Government set the bases for a new model for the Brazilian Electric Sector, supported by Laws nos. 10.847 and 10.848, dated of March 15, 2004, and by Decree no. 5.163, dated of July 30, 2004. In this context the former governmental privatision and deregulation program has been stopped and private participation on new projects has been implemented through auctions in the generation and the transmission sectors.

4.3.  Role of Government in the nuclear R&D

In Brazil, all nuclear R&D activities are developed by government institutions. They are carried out mainly by the six R&D CNEN's Institutes, which are under the Ministry of Science and Technology, and by the military institutes, which are under the Ministry of Defense. These ministries are responsible for the establishment of the country nuclear R&D policies and strategies, as well as for the provision of the necessary budget and financing mechanisms to make the corresponding R&D projects feasible.

4.4.  Nuclear Energy and climate change

Brazil is very much concerned about greenhouse gas emissions and climate change. Even being its electrical production matrix around 90% based on hydro source, the country has signed the Kyoto Protocol.

4.5.  Safety and waste management issues

Safety issues demanding special attention is the ANGRA 1 steam generator replacement and possible power uprating, as well as the issuance of the Permanent Operation Authorization for ANGRA 2.

In order to manage waste safety issues more efficiently, the creation of a company dedicated exclusively to waste management is a possibility to be considered. Brazil has two final repositories for the waste generated during the recovery actions of the Goiania accident in 1997. A final repository for Angra power plants low and intermediate level waste are in study. Elaboration of regulation on decommissioning safety by CNEN and the adequate provision of funds by the operators are issues also being considered for the near future.

4.6.  Future Developments

It is expected that the government decision in favor of the conclusion of the third Brazilian nuclear power plant - Angra III, a 1,350 MW Siemens PWR type - be announced until the end of the year 2006. Once approved, its conclusion is scheduled to the end of 2012.

A study on a revision of the former Brazilian Nuclear Program, for the period from 2006 to 2022, has been performed by the country nuclear institutions and is presently under government analysis.

REFERENCES

Appendix 1

INTERNATIONAL (MULTILATERAL AND BILATERAL) AGREEMENTS

Appendix 2

DIRECTORY OF THE MAIN ORGANIZATIONS, INSTITUTIONS AND COMPANIES INVOLVED IN NUCLEAR POWER RELATED ACTIVITIES

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1. The statistical tables in this profile have been updated with data as of the end of 2007 from IAEA databases, namely the Power Reactor Information System (PRIS) and Energy and Economic Data Bank (EEDB), and the World Bank's World Development Indicators (WDI).