March 1, 2006
Lining up power.Brazil's center-left government put new energy policies to the test on December 16, when it held its first power auction and successfully tendered all seven concessions to build hydroelectric plants over the next five years. But it will take much more than these projects to overcome the deficiencies in Brazil's power sector and eliminate the risk of another electricity shortage like the one that stifled the economy five years ago. Although the auction was a moderate success, it revealed a major flaw in the government's new public/private model: state-run power companies won the bulk of the hydroelectric projects.
"State-controlled companies can accept a low rate o
Brazil's energy sector is not out of the dark yet, with experts predicting price spikes within five years and possible power shortages.