Brazil’s Nuclear Power Plans Three Years after Fukushima (Chris Cote)

Brazil’s Nuclear Power Plans Three Years after Fukushima A BrazilWorks Briefing Paper April 2014

Written by Chris Cote* Research Associate BrazilWorks The 2011 Fukushima accident interrupted plans to build four to eight new nuclear power plants and highlighted an internal debate over nuclear energy’s trajectory in Brazil. In anticipation of forthcoming strategy documents, this BrazilWorks Briefing Paper discusses the potential role of nuclear in Brazil’s future energy mix.

BrazilW orks 1718 M Street, #356 Washington, D.C. 20036 USA Tel. 202-744-0072 brazilworks@gmail.com www.brazil-works.com

*Chris Cote is the energy and economics research associate at BrazilWorks. He previously worked as a researcher with the Office of the Secretary of Defense and on the energy, economics, and Brazil programs at the Inter-American Dialogue.

He is a contributing editor at Finding the Missing Link, a blog on environment, energy, and security issues. In 2011 he completed a Fulbright scholarship in Fortaleza, Brazil. He holds a B.A. in international relations from Tufts University and has completed coursework at the University of Buenos Aires. He can be contacted at: c.j.cote@gmail.com.

BrazilWorks Analysis and Advisory for Decision Makers

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Brazil’s Nuclear Power Plans Three Years after Fukushima

Summary •

Brazil has two operating nuclear power plants; a third, under construction, is due in 2018.

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Since 2007, plans for dozens of nuclear power plants have been trimmed to four or fewer.

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The 2011 Fukushima accident highlighted internal debate in Brazil’s government over nuclear power.

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An energy-planning document due out in the first half of 2014 will be the first update on potential nuclear energy expansion since the report’s last iteration in 2007.

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The outcome of the October presidential election will ultimately decide Brazil’s nuclear energy future.

BrazilWorks provides advisory and consulting services to Brazilian and United States based private sector enterprises, civil society organizations, and policymakers interested in Brazilian market structure, regulatory frameworks, public policies and political risk, and economic development as well as United States-Brazil relations. BrazilWorks specializes in agriculture, biofuels, capital goods, climate change, defense procurement, energy, healthcare, local content policies, producer association dialogue and cooperation, and international commercial and investment negotiations and policies.

BrazilWorks 1718 M Street, #356 Washington, D.C. 20036 USA Tel. 202-744-0072 brazilworks@gmail.com www.brazil-works.com

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March 2011 Fukushima Accident On March 11, 2011, a tremendous earthquake and subsequent series of tsunami waves devastated the eastern region of Japan’s main island, including four reactors at the Fukushima I nuclear power plant. Of the six operating reactors, the fuel of three – reactors No. 1, 2, and 3 – melted. Reactor No. 4 had previously had its fuel removed from the reactor core because of repair work. The spent fuel, sitting above the reactor at the time of the accident, would cause problems once the initial crisis subsided. The meltdowns occurred because the backup diesel generators failed after they were flooded with water.1 As a result of this catastrophe, Japan took all 54 of its nuclear reactors offline, though Prime Minister Shinzo Abe is eyeing a “nuclear reawakening.”2 Three years later, intermittent electricity issues continue to cause emergencies throughout the Fukushima plant, especially at reactor No. 4, where water must be continuously circulated around spent fuel rods to keep them cool. Rats, faulty wiring, and a number of other problems have shown that while extraordinary natural measures caused the initial accident, more prosaic problems can cause crisis in a nuclear power plant as well.

Indeed, mismanagement is perhaps the largest issue in the cleanup process so far. Tokyo Electric Power, the utility company that operated the Fukushima reactors and the government deemed responsible for their decommissioning, has been repeatedly criticized for its inadequate management of the process. 3 As the New York Times Editorial Board writes, Prime Minister Abe and his government, eager to restart the reactors to wean Japan from dependency on imported fuels and shift attention from the disaster, have contributed to a slow and confused cleanup.

The international reaction to Fukushima has varied considerably. In response to the accident, the International Atomic Energy Agency (IAEA), the United Nations governing body for the regulation and promotion of nuclear energy, released a Nuclear Action Plan on Nuclear Safety in September of 2011, that called for increased safety standards. Its summary reminded that responsibility for safety measures ultimately “lies with each Member State and operating organization.”4 While Japan enacted the most immediate energy policy changes, other states and organizations have reacted in very different ways.

Germany, which generates 4.2 percent of the world’s total nuclear electricity5, went well beyond IAEA and industry suggestions, immediately taking its seven oldest reactors permanently offline and pledging to shut down all of its plants by 2022.6 The United States, the world’s largest nuclear electricity producer, promised more subtle changes, which many critics say have not gone far enough.7 Japan Lessons Learned, a

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commission set up by the Nuclear Regulatory Commission, published a series of recommendations to improve reactor safety in the United States. These recommendations include expanding the safety framework for designing nuclear reactors, improving spent fuel instrumentation, providing reliable hardened containment vent systems, revisiting the effects of earthquakes, reanalyzing the possibility of flood damage, and increasing staff training. 8 Other countries, like India, South Korea, and Russia, have continued on with their programs, unfazed by the accident in Japan. In most cases, the overall effect of Fukushima on nuclear policy across the world is impossible to disentangle from internal policy debates and economic shifts. The case of Brazil is no exception.

Brazil’s Nuclear Energy Program

Nuclear Energy Policymaking in Brazil Brazil’s 1988 Constitution mandates that “the Union has the exclusive competence for managing and handling all nuclear energy activities, including the operation of nuclear power plants.” The production and generation of electricity falls under the control of the Ministry of Mines and Energy, As Brazil relies on Petrobras for the majority of its oil generation, Brazil relies on Eletrobras, a company with a similar publicprivate ownership structure, for electricity generation.

This state-managed company produces nuclear electricity through Eletrobras Termonuclear S/A, commonly known as Eletronuclear, who built and operates the Angra nuclear power plants.

While operations are controlled by the Ministry, Brazil’s nuclear energy policy is set independently. The National Nuclear Energy Commission (Comissão Nacional de Energia Nuclear, CNEN), is an autonomous body, with administrative and financial independence, linked to the Ministry of Science and Technology. Its mission is to (1) collaborate on the formulation of Brazil’s nuclear energy policy; (2) research, develop, promote, and lend services in the area of nuclear technology for peaceful use; (3) regulate, license, authorize, control, and finance this utility.1 It is similar to the IAEA in that it is at once a promoter and regulator of nuclear energy. In 2008, then President Luiz Inacio Lula da Silva created the Committee for the Development of the Brazilian Nuclear Program, which consists of 12 ministers.

Like that of its neighbor Argentina, the only other nuclear-powered country in South America, Brazil’s civilian nuclear power program has remained largely out of the international media spotlight.9 When Brazil’s nuclear program is discussed, it is generally with regard to its nuclear submarine ambitions, the technology of which its navy is acquiring from France, or about how the country’s leadership voluntarily stopped developing nuclear weapons at the end of military rule in the late 1980s. The South American country operates two nuclear reactors near Rio de Janeiro, which together generate 1.7 percent of the country’s electricity supply.10 Both plants, Angra 1 and 2, are located in Angra dos Reis, some two and a half hours south-west of Rio de Janeiro. Angra 1 began operating in 1985 with 640 megawatts (MW) of

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electricity potential. It is a “turn-key” reactor (everything was ready to go, the Brazilians just had to “turn the key”) built by the American company Westinghouse.11 Angra 2, with a larger capacity of 1,350 MW, came out of a 1975 agreement with Germany.12 Construction began in 1981, and after decades of delays, the plant started operating in 2001, around the time of major energy shortages in southeastern Brazil.

Construction of a third plant, Angra 3, is about half completed. It will be the twin of Angra 2, with up-to-date safety features tacked on.13 Though Angra 3 adds another 1,350 MW of potential, rising electricity demand in Brazil means that this third plant will only maintain nuclear energy’s current role in Brazil’s electricity mix. The Energy Research Company (Empresa de Pesquisa Energética, EPE), an agency within the Ministry of Mines and Energy, projects in its annually-released energy forecast for the next decade that nuclear’s contribution will fall to a low of 1.3 percent in 2017 as nuclear generation remains stagnant while total electricity supply grows. Nuclear will not make a larger contribution until 2018.

Response to Fukushima - Planning Brazil’s Nuclear Future When the Fukushima accident occurred, an Electronuclear emergency group in Brazil convened, analyzed any design commonalities that made the Angra plants susceptible to any Fukushima-like accident, and issued its own recommendations for Brazil’s nuclear industry.14 Electronuclear conducted safety inspections of its two operating reactors and strengthened checks and guidelines in the future. The focus was on “station black out, flooding, and fire hazards.” 15 Electronuclear took into account safety recommendations made by industry groups and, with the National Nuclear Energy Commission, developed its own response plan.16 The accident also shed light on internal debate within the Ministry of Mines and Energy. Public documents have not addressed Brazil’s nuclear energy plans since Fukushima, but public statements by various ministry officials show mixed opinions.

In 2007, Brazil was considering as many as 33 new nuclear power plants. The 2007 National Energy Plan (Plano Nacional de Energia, PNE), which provided a vision for Brazil’s energy development strategy until 2030, presented three hypothetical scenarios for nuclear generation in Brazil before 2030, given different uranium prices. Under the three scenarios, nuclear capacity would increase by 4, 17, or 33 plants by 2030 (7,800 MW; 20,800 MW; 36,400 MW), excluding the three Angra plants.

After the Fukushima accident occurred, the Minister of Mines and Energy left the door open for a change in Brazil’s nuclear trajectory. Speaking of Brazil’s nuclear power plants, he said, “Ours are among the best, safest, and most productive in the world. The four planned

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plants will be constructed or reevaluated.”17 Doubt over the program continues. The head of the Energy Research Company told Reuters in 2013 that four new reactors would be “unlikely,” and that nuclear construction is “not a priority at the moment.”18 Yet other sections of the ministry are pushing ahead. A presentation given in 2013 by ministry officials at a 2013 Brazilian Nuclear Industry conference underscores that above all Brazil is shifting strategies to meet electricity demand which is forecast to grow four to five percent annually over the next decade.19 They cited three other scenarios, where 4, 6, or 8 new reactors might be constructed before 2030. 20 The most likely option seems the construction of four new 1000-megawatt reactors – two in the fast-growing, arid Northeast and two in the electricity-hungry and black out prone Southeast.21 In past decades, the country met increases in electricity demand by building new hydroelectric plants. The hydro-reliant system is vulnerable to drought, which currently threatens southeastern Brazil with electricity shortages22 and caused a major blackout in 2001 –an energy crisis that continues to haunt politicians and policymakers today.23 Although Brazil is only using 30 percent of its hydropower potential, the Ministry of Mines and Energy sees an end to hydropower’s “feasible potential” before 2030.24 Large-scale dam projects have met fierce local and environmental opposition. Communities have attracted international support and media attention, which have caused project timelines and costs to balloon, if not stop completely.25 Over the next ten years, hydropower construction is not projected to keep pace with demand: even the projected increase of 21 GW of hydro capacity in five years causes its share of the mix to drop almost two percent.26 Developing renewables – wind, biomass, and solar – is a national focus, and their growth in the next decade is slated to make a large contribution: the 2022 Decennial Energy Plan, a policy document prepared by the Energy Research Company, projects that these nonhydro renewables will contribute more than 38 gigawatts (20.8 percent) of Brazil’s electricity needs by 2022, up from the 25 GW projected from 2016.27 Non-hydro, non-renewable alternatives include coal, natural gas, and nuclear, none of which is without downsides in a country proud of its low-carbon economy. Coal, the dirtiest fuel, is slated to remain low in the mix. Current contributions of 1.4 percent are projected to rise only to 1.5 percent in 2022.28 Natural gas will rise more, from 7.8 to 10.4 percent in the next ten years.29 Nuclear is also controversial for questions of cost, health, and waste disposal.

Allowing coal, natural gas, and nuclear to rise in their contribution to the energy mix, as the role of hydropower decreases, will be among the largest energy, economic, and environmental issues confronting Brazil in the coming three decades.

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Whether zero, four, or any number of nuclear plants will be built in Brazil will not be known until the publication of the National Energy Plan 2050, a strategy and planning document, and this year’s Decennial Energy Plan (Plano Decanal de Energia, PDE), which sets policy. Both are due out during the first half of 2014.30

Political Decisions Politics, both national and local, play a role in policymaking, of course. Brazil’s public largely disapproves of nuclear energy “due to associations with the military regime and the Fukushima disaster,” according to one Brazilian diplomat. 31 In “Brazil’s Nuclear Kaleidoscope,” which focuses heavily on the Brazilian military’s nuclear program, Carnegie Endowment associate Togzhan Kassenova explains that politics “has a major bearing on the nuclear industry [in Brazil]:” “The portrait that arises from discussions with [Brazilian observers both within and outside the industry] is of a president who has been opposed to nuclear power since her time as minister of mines and energy (2003-2005) and who is conscious of the negative public views on nuclear energy. As she rose through the ranks and acquired decisionmaking power on nuclear matters…she seems to have accepted the idea that Brazil needs nuclear energy but has remained careful not to support it openly.”32 President Rousseff’s initial opposition to nuclear power has a strong political and intellectual foundation in Brazil. The most persistent criticism of the civilian nuclear program is that the plants are not necessary at all. José Goldemberg, a physicist and former cabinet minister, told Isto É, a Brazilian business weekly, that the nuclear program is “absurd,” and that the government should focus on other options, including further exploiting hydropower options.33 For him, Brazil’s nuclear energy program was born out of the caprice of the military dictatorship and has no business continuing in Brazil. Indeed, the possibility of new nuclear power plants has drawn interested industrialists from abroad. Russia’s state-owned atomic energy company Rosatom has expressed interest in supplying technology to Brazil 34 and Westinghouse, the American company who supplied Angra I, is ready for more business as well.35 If Dilma Rousseff wins reelection this October, energy policy, including nuclear plans, is likely to be marked my continuity. Still, with the sands still shifting among Brazil’s energy elite, it is unwise to venture a guess as to what may happen. Altino Ventura, the secretary of energy planning and development in the Ministry of Mines and Energy, predicts no more decisions

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will be made on new nuclear power plant construction until 2015, after the presidential election has been decided.36 So, whatever result comes from the two documents due out in the first half of 2014, October’s result will be the real decider of Brazil’s nuclear energy future.

What is clear now is that Brazil’s nuclear policy would benefit from an honest public debate, local and national, on the major nuclear policy issues: cost, generation, electricity demand, siting, and waste disposal. These decisions are no small matter: the nuclear plants will last for more than hundred years and the waste they produce for thousands. Fortunately, Brazil has a history of vigorous debate surrounding energy policy, especially with regard to hydropower. The opportunity to turn that probing eye toward nuclear energy should be used this summer in the run up to the October presidential election to identify policy alternatives for Brazil’s energy future.

Endnotes For a more complete account of the accident and damage caused by the tsunami on March 11, 2011, see: Holt, Mark, Richard Campbell, and Mary Beth Nikitin, “Fukushima Nuclear Disaster,” Congressional Research Service, January 18, 2012. www.fas.org/sgp/crs/nuke/R41694.pdf 2 Fackler, Martin, “Warily Leading Japan’s Nuclear Reawakening,” New York Times, March 20, 2014. http://www.nytimes.com/2014/03/21/world/asia/warily-leading-japans-nuclear-reawakening.html 3 The Editorial Board, “Fukushima’s Shameful Cleanup,” New York Times, March 21, 2014. http://www.nytimes.com/2014/03/22/opinion/fukushimas-shameful-cleanup.html 4 “IAEA Action Plan on Nuclear Safety,” IAEA Board of Governors, September 13, 2011, p. 1. http://www.iaea.org/newscenter/focus/actionplan/reports/actionplanns130911.pdf 5 International Energy Agency, “Key World Energy Statistics,” 2013, p. 17. http://www.iea.org/publications/freepublications/publication/name,31287,en.html 6 “Germany: Nuclear power plants to close by 2022,” BBC News, May 30, 2011. http://www.bbc.com/news/world-europe-13592208?print=true 7 “U.S. Nuclear Power after Fukushima: Common Sense Recommendations for Safety and Security.” Union of Concerned Scientists, July 2011.

8 Japan Lessons Learned, http://www.nrc.gov/reactors/operating/ops-experience/japan-dashboard.html 9 Its military nuclear program, on the other hand, has been the subject of much recent discussion. For an excellent look at Brazil’s military nuclear program, including discussions of the nuclear submarine and nonproliferation, see: Kassenova, Togzhan “Brazil’s Nuclear Kaleidoscope,” Carnegie Endowment for International Peace, 2014, p. 44. http://carnegieendowment.org/files/brazil_nuclear_kaleidoscope_lo_res.pdf 10 Schneider, Mycle and Antony Frogatt et. al., “World Nuclear Industry Status Report 2013,” July 2013, p. 12. http://www.worldnuclearreport.org/ 11 Angra 1. Electronuclear. http://www.eletronuclear.gov.br/aempresa/centralnuclear/angra1.aspx 12 Angra 2. Electronuclear. http://www.eletronuclear.gov.br/aempresa/centralnuclear/angra2.aspx 13 Angra 3. Electronuclear. http://www.eletronuclear.gov.br/aempresa/centralnuclear/angra3.aspx 14 “Sixth National Report of Brazil for the Nuclear Safety Convention,” Comissão Nacional de Energia Nuclear, August 2013, p. 8.

15 ibid.

16 “Impact of the Fukushima Accident: Extraordinary National Report of Brazil,” CNEN, 2012, p. 11.

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“Lobão admite que programa nuclear brasileiro será revisto,” R7 Notícias via Agência Brasil, June 1, 2011. http://noticias.r7.com/brasil/noticias/lobao-admite-que-programa-nuclear-brasileiro-sera-revisto-20110601.html 18 Winter, Brian, “Brazil cools on nuclear power plants; favors wind,” Reuters, September 15, 2013. www.reuters.com/article/2013/09/15/us-brazil-nuclear-idUSBRE98Ec06U20130915 19 “The Benefits of Nuclear Technology for Social Inclusion,” Ministry of Mines and Energy, 2013, p. 17. http://www.aben.com.br/Arquivos/151/151.pdf 20 ibid., p. 14 21 ibid., p. 14.

22 Blount, Jeb “Brazil scrambles to avoid power rationing as costs soar,” Reuters via Yahoo News, March 24, 2014. http://news.yahoo.com/brazil-scrambles-avoid-power-rationing-costs-soar-001726144--finance.html 23 For more information on the blackout and electricity policymaking, see: Cote and Langevin, “Brazilian Electricity 101,” BrazilWorks, December 13, 2013. www.brazil-works.com/brazilian-electricity-101/ 24 “The Benefits of Nuclear Technology for Social Inclusion,” Ministry of Mines and Energy, 2013, p. 18. http://www.aben.com.br/Arquivos/151/151.pdf 25 See Langevin, Mark S., “Myths and Preconceptions about Belo Monte,” BrazilWorks, October 16, 2012. http://www.brazil-works.com/?bw_publication=myths-and-preconceptions-about-belo-monte 26 Plano Decenal 2022 projects hydropower’s capacity will rise from 98 GW in 2016 to 199 GW in 2022, but its percentage of the mix will fall from 66.8 to 65 percent. p. 97.

27 ibid., p. 97.

28 The Benefits of Nuclear Technology for Social Inclusion,” Ministry of Mines and Energy, 2013, p. 5. http://www.aben.com.br/Arquivos/151/151.pdf 29 ibid, p.5.

30 ibid. p. 18.

31 Kassenova, Togzhan “Brazil’s Nuclear Kaleidoscope,” Carnegie Endowment for International Peace, 2014, p.

44. http://carnegieendowment.org/files/brazil_nuclear_kaleidoscope_lo_res.pdf 32 ibid., p. 44.

33 Osse, José Sergio, “Não precisamos de energia atómica,” Isto É, 2009. http://www.terra.com.br/istoedinheiro-temp/edicoes/604/imprime132826.htm 34 “Rosatom confirms interest in Brazil and shares its experience in the development and application of nuclear technologies and solutions,” Press Service of Rusatom Overseas, June 6, 2013. http://www.rosatom.ru/en/presscentre/news/c64f47004ff0665abd00bfc3f8a2b520 35 “Westinghouse Sees Promising Future for Nuclear Energy Development in Brazil; AP1000(R) Plant 'The Right Fit' for Country's Needs”, Westinghouse, November 26, 2013. http://onlinepressroom.net/westinghousenuclear/ 36 Nogueira, Marta, “MME prevê necessidade de novas usinas nucleares,” Valor Econômico, February 11, 2014.

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