New York, May 8, 2005

This was the second conference on POWER FUTURE held in Fortaleza, the
Capital of the State Ceara, in the North East part of Brazil. The
first
conference was held in 2004 and next event is planned for March 28-30,
2006
- POWER FUTURE 2006.

The State of Ceara, has 7.9 million inhabitants, in an area of 148.016
km2,
or 1.74% of the area of Brazil - it is 9.57% of the North East area
of
Brazil. 71.53% of its people live in the 184 urban municipalities and
2.2
million people live in Fortaleza. Ceara, like its neighboring states
on the
“shoulder of Brazil”, is warm year-round and experiences a slightly
cooler
rainy season December through March. In the last years there is very
little
rain and the area is stricken by drought. Temperatures are higher in
the
interior as the coast receives steady wind off the ocean. Nowhere in
the
region does it ever get particularly cold or rainy. Ceara prides
itself
with the terrific beaches that it tried to develop for tourism - the
travel
books, when talking of Ceara, look like one long list of these beaches
with
Fortaleza in their center. Fortaleza has non-stop flight air-links to
Miami, Buenos Aires, and Lisbon. I met tourists from these locations
as
well as from Cabo Verde in Africa. To put it in simple terms - Ceara is
one
of the poorest states in Brazil but it is rich in sun, wind, and sea,
as
well as land that could best be used for an agriculture that does not
require much water. Now, with the possibility of the world moving to
the
production of energy from renewable sources, Ceara stands out as having
a
high potential in many of the most prominent such sources. This has
been
noticed by the local State Government, and also by the Brazilian
Federal
Government. This is the reason for Ceara entering the circuit of
conferences
and technology trade fairs dealing with energy from renewable sources
production, and as we shall see - Brazilian as well as foreign
corporations,
have started, with the backing of the State Government, to get involved
investing in real projects. In anticipation of a new push for
industrialization, the State of Ceara is developing a new ultra-modern
port
facility at Pecem, 45 km from Fortaleza, in addition to the older
facility,
the Mucuripe Port in Fortaleza. Pecem has handled 292.4 thousand tons
in
2003 and allows for docking of ships of up to 16 meter keel depth - it
offers the lowest port handling costs in Brazil. It is a 7 day trip
from
Miami or an 11 day trip from Rotterdam.

Further, the State Government is now involved in helping create CENEA,
the
Center for Alternative Energy, to help design new avenues for
development in
this area (more on this later). Interesting, sort of prophetically, in
my
flight from New York to Fortaleza, on the first leg with American
Airlines
to Sao Paulo, the April 2005 AA flight magazine had a good article -
“Tilting At Windmills” - then I found out at the conference that the
Federal
Government intends to make Ceara the main provider of electricity from
wind
mills. I could then see mills at Mucuripe right from my hotel window,
later I saw them turning in the Pecem area as well.

The Conference was opened with a presentation by the Brazilian
Secretary of
Energy and Mines - Marcio Pereira Zimermann, who presented the plans
for
development in the energy sector and the Federal policy for stimulating
renewables in the PROINFA plan (Programa de Incentivo as Fontes
Alternativas
de Energia Electrica) involving wind mills, small hydro, sugar cane
bagass,
wood chips. Later the Governor of Ceara added to this list wave power,
and
we shall see that in Rio de Janeiro there is already going on an
activity
producing power from ocean waves - after all this is just another form
of
wind power. All of the above deals with electricity production as this
was
the main theme of this conference. The projections are for the
production
of 5,654 MW from wind power, 2.853 MW from small hydro, and 3.431 MW
from
biomass. The investment by PROINFA in wind mills will total 7.87 Reais
which
amounts to about US$ 3 billion - going to two areas - Ceara 75% and an
area
in the south of Sao Paulo 25%. Observations made told that the year
2002
was biggest for developing small hydro, 2004 saw the development of
biomass
based electric production, and 2005 should be a year for the wind.
Speakers
from Electrobras, the government electric company, and APPME, the
Brazilian
Association of Small and Medium Size Producers of Electricity, delved
into
the incorporation of these new sources into the grid. APPME had
critical
views of PROINFA such as the price paid for buying the biomass-energy,
the
cost of steel, and the need to include co-generation with natural gas,
as
well as their request to increase the allowable legal size of a small
hydro
producer from 30 MW to 50 MW.

The last session of the first day, with representatives of State
Governments
speaking, enlarged the discussion to non electricity subjects.

Jose Zenobio Teixera de Vasconcelos, speaking for the newly reorganized
ADENE - the Agency for the Development of the North East, introduced
the
subject of biodiesel from ricinus (castor oil, called here mamona) as
produced in the State of Pernambuco, Luiz Eduardo Barbosa de Moraes,
Secretary of Infrastructure, Carlos Matos Lima, Secretary of
Agriculture,
Helio Guedes de Campos Barros, Secretary of Science and Technology -
State
of Ceara - introduced biodiesel from soja, dende and babacu (palm
trees),
castor oil, as well as animal fat. It is stressed that biodiesel
generates
employment and income for rural populations, castor oil is specially of
interest in the semi-arid climate of Ceara, and the social-econmical
benefits are a main target in developing this sector.
Silvano Magno, Secretary of Infrastructure of the State of Bahia,
another
poor state of the North East, said that of the 10 million people
without
electricity in Brazil, 2 million live in Bahia. He is pushing for the
Brazilian National program “LUZ PARA TODOS” (Light for All). PV is a
way to
deal with isolated areas. His presentation was about making available
kits
that cost 5,000 Reais (about US$ 1,900) to provide enough electricity
for a
household including light, a radio, a TV etc.. His program is to
distribute
66,327 such kits and he has already distributed 33,327 of the kits.

Armando Shalders Neto, Secretary of Energy, Water resources, and
Health, of
the State on Sao Paulo, the most important state in the Brazilian
economy,
presented the situation that led Sao Paulo to introduce decentralized
energy
besides the conventional grid. The rural electrification by CERESP has
installed PV at 54 rural schools, 4 rural phone centrals, 16
installations
in State parks, in 4 indigenous communities, 4 health centers and 2 for
fish
refrigeration. Of the electricity generation in the State, of
14,313MW,
1,363 come from sugar cane bagass, 20 from biogas, and 77 from wood
remains.
Starting 2001, Sao Paulo has introduced natural gas of which now 80%
accounts for 649 MW. 10% of the NG goes for automotive transportation
and 3%
for residential use.

The Second day started with presentations of investment figures for
renewables. Petrobras, the Brazilian Government Oil Company, mentioned
the
concept of NEGA WATT - which is the negated watt or the saved watt -
the
need to work on efficient use of the energy supplies. Indeed this may
be
the most immediate source of new energy. Less excited I was when I
heard
the speaker present ideas of a “biogasolina” or cracking vegetable oils
in
order to produce a hydrocarbon that can be used in gasoline. The
ethanol
they would like to use in ETBE as markets for photosynthesis. Also, he
mentioned the production of biomass-based hydrogen. All nice ideas but
seemingly introducing complications where there are simpler ways of
using
the biomass.

In parallel to above meeting there was a Biomass panel with speakers
from
CENEA (the new Ceara Center for Alternative Energy). Caetano Moraes
from
INT (Instituto Nacional de Tecnologia) the Science and Technology
Ministry
Institute of Technology Research in Rio de Janeiro, and Professor Jose
Oswaldo Carioca from the University of Ceara, spoke of the “triple
bottom
line” which is a triangle connecting social responsibility, ecological
responsibility, and technical-economic aspects leading to green
chemistry
for the environment. The Brazilian Proalcool program of the seventies
leading now to a Probiodiesel program. The green chemistry concept
will
lead to the development of biomass-based additives to conventional
fuels.

A technical session presented the companies producing equipment for
windmills: Siemens, Wobben/Enercon, and BR TUV using technology from
Germany, Gamessa from Spain, Mitsubishi from Japan, Vestas from
Holland.
The competition showing that there is indeed action going on. In
effect
Wobben is the front runner. They have invested already by building
mills
and even owning some of them - selling the electricity to the
Brazilians -
they should be credited for opening this market. They have established
plants at two locations to build in Ceara parts of these wind mills.
Mitsubishi will probably be next in entering the market - propped up by
credits from Brazil.

In the afternoon the all important session on financing of projects.
First the Bank of the North East of Brazil (BNB) with its project OFNE
VERDE
for alternative energies that must be sold to Electrobras in
conjunction
with PROINFA. Then, Gabriel Goldschmidt, Principal Investment Officer,
Latin American and Caribbean Regional Office, the International Finance
Corporation IFC at the World Bank. We learned that the IFC has a total
of
$1,25 billion earmarked for projects in sustainable energy including
$325
million in projects connected to the carbon credit mechanism of the
Kyoto
Protocol to the UNFCC - $275 million with the CDM and $55 million with
the
JI. The other $900 million seem already to be earmarked for 20
projects in
11 countries the like of Geothermal in Guatemala, and wind in the
Dominican
Republic. Mr. Goldschmidt has recently moved from Washington to Rio de
Janeiro in recognition of the fact that much of future activity will be
in
Brazil.

Next panel dealt with the Kyoto Protocol, and I had the honor to be
part of
this panel.

From the State of Ceara participated Sra. Branca Bastos Americano the
Secretary of Science and Technology, and Mr. Romeu Aldigueri, the
Secretary
of Environment. Also, Neilton Fidelis da Silva, from the Brazilian
Forum on
Climate Change, Rio de Janeiro. The panel was intended to report to
the
meeting about the possibilities of taking advantage of the Kyoto
mechanisms
in the effort to develop the budding renewable energy industry. The
one
page abstract of my own presentation is linked to this report. Please
see:
SustainabiliTank.info GLOBAL WARMING/MARKETS FOR CARBON CREDITS.

A session on Solar Energy dealt with Photosynthesis (Jorge Dieter
Anhalt),
Photovoltaics (Stefan Krauter), and Refrigeration and desalination
(Maria
Eugenia and Prof. Parlon).

The third day moved to more advanced areas - wave power, hydrogen,
desalination, then a session on biodiesel and further alternate
sessions on
wind and waves. This structure did not allow me to participate at the
parallel session on wind energy.

The spokesman from the Ministry Mines and Energy stressed
decentralization
and his interest in decentralization and use of hybrid biodiesel from
babacu
in the Amazon region to be worked on with the help of CNPq - the
research
arm of the government.

Segen Estefen from the Laboratory of Submarine Technology of the
oceanic
engineering program COPPE/UFRJ (the federal university of Rio de
Janeiro),
explained their work on OTEC (Ocean Thermal Energy Conversion),
offshore
wind mills, and wave technology (ondes). They have one working
experiment
on wave technology in Rio de Janeiro and intend to establish a pilot
project
at the breakers of the port of Pecem. With a shore line of 8,500 shore
line, Brazil has high potential to produce energy by the mechanical
method
he presented.

Caetano de Moraes, from INT, presented ideas for the production of
hydrogen
through gasification of biomass and a shift reaction. Later we
discussed the
use of windmills and electrolysis of water for hydrogen production.

Ricardo de Gusmao Dornelles from the Ministry of Mines and Energy, in
the
biomass session, took the position that by 2020 the priority is
hydrogen via
reforming ethanol. He sees prior to this - by 2010 the introduction of
hydrogen produced by reforming natural gas, then by 2015 from the
hydrolysis
of water.

Maria Antonieta Andrade de Souza, from the National Petroleum Agency,
sees
2% additive of biodiesel to diesel with 750l/hectar of castor
plantation in
the semi arid zone saving 2 kg of CO2/liter of biodiesel. Nelson Jose
Cortes da Silveira, the director general of Brasil Ecodiesel, presented
the
social-economic aspects showing the increase of income to the rural
families. On the technology spoke Jose Neiva Santos Junior from
TecBio.

Last session, back to wave technology by Eliab Ricarte from COPPE/UFRJ
pointing out that the technology can be used off-shore in order to
provide
energy for water desalination. Then Paulo Cesar Marques de Carvalho
from
CENEA, enlarged further on the desalination process. He later gave me
his
article “The Brazilian Experience with a Photovoltaic Powered Reverse
Osmosis Plant”, published in Progress in Photovoltaics: Research and
Applications 2004; 12:373-385 (DOI: 10.1002/pip.543), John Wiley &
Sons,
Ltd., 2004. He also wrote in Wind Engineering Vol 27, No.2, 2003,
Multi-Science Publishing Co., Brentwood, Esex, UK - and is interested
in
combining wind technology and desalination.

And finally, last but not least, the presentation by by Augusto L.
Coelho
from the State University of Ceara in Fortaleza, on the construction of
solar cells using natural products of low cost. He proposes the use
TiO2 and
natural pigments from common vegetation like the red bougainvillaea.

in parallel with the conference & technology fair I was also involved
in a
brain-storming session with the members of CENEA - the Ceara Center for
Alternative Energy. When I left town I understood that CENEA will
pursue in
its first year mainly the subject of wind energy.

By 2008, it is expected that by 2008 there will be 500 MW wind mills
installed in Ceara. The Electric company COELCE is the partner in
these
projects. Wobben has right now mills in three locations in Ceara with
10,
5, and 2.4MW for a total of 17.4MW. They already build blades in Ceara
and
will have a local plant for generators. For the time being they export
parts
to construction sites outside Ceara. It seems that an agreement with
Mitsubishi and a Japanese bank will bring about a 30MW plant. Brazil
wants
at least a 6% growth in its energy production and intends to obtain a
major
part of this from wind mills in Ceara. There is talk of using the
electrical
wires in reverse - sending electricity to the interior rather then
receiving
the current from the interior. Further, there is talk of going
offshore and
for much taller wind mills with higher energy production capability.
Also
there is talk of decentralized electricity production with a windmill
serving a project or a community. I discussed such a plan with someone
who
is building an ocean side project to produce a food supplement.

Ceara has produced an impressive atlas for the eolic potential of the
State.
The first task CENEA wants to undertake is revising this map by going
to
higher altitudes. Also, considering that the shores of Ceara have an
extended continental shelf area the mapping will cover that area also -
thus
project #1 is an update of the map of wind potential for the State.

Two additional projects involve local uses of wind-mills:

Project #2 is the use of an existing wind-mill to be applied for work
on the
electrolysis of water for hydrogen production.

Project #3 is preparation of a review of desalination technology and
picking
one technology to be tried with power coming from the wind-mill.
Economics
to be figured out and when off-shore wind-mills are available, the
technology will be tried off-shore.

Future projects look at the possibility of linking wave technology with
off-shore wind-mills and eventually linking up with the programs of
biodiesel production and use.