The uncertain future of coal-fired power plants in Santa Catarina
The Jorge Lacerda coal-fired thermoelectric complex, in Santa Catarina, may see its operations shut down this year. With its contract close to expiring, that is what is going to happen if operator Engie, the federal government, the Santa Catarina administration and the coal industry do not find a way out to make it feasible and continue operations in the future.
The plant is in a dead end. It is old and considered uncompetitive, even in comparison with other coal plants. Engie has been trying to sell it since 2017, following the global guideline of decarbonizing the portfolio, but all the attempts have failed so far. Because of that, the company released a plan of gradual decommissioning of the generators at the end of last year, starting in 2021.
The Ministry of Mines and Energy, together with the coal industry, the government of Santa Catarina and Engie itself, are racing to avoid the closure. However, first they need to find a solution for mineral coal, a polluting source increasingly rejected by society.
There is also an aggravating factor: the fuel used by Jorge Lacerda complex is subsidized by the Power Development Account (CDE), the "superfund" of the electric sector, paid by consumers in their electricity bills. Without this subsidy, operations are not viable. The benefit expires in 2027, but, due to the difficulty in finding a way out until then, some see the need to extend the subsidies.
Located in the municipality of Capivari de Baixo, the Jorge Lacerda complex has 857 megawatts of power and employs around 1,100 between direct and indirect jobs. The project uses domestic coal, mined in the southern region of the country, unlike other plants with more competitive costs, such as Eneva's, which uses imported fuel. Their contracts end in 2028.
According to Engie's announcement last year, the idea was to turn off all the generators by 2025. To mitigate the social and environmental effects of the proposal, the company is considering using funds from the CDE.
The plan immediately caused a backlash among the local community, which is highly dependent on the activities that make up the coal production chain - which include the thermoelectric complex, the mining companies, the Tereza Cristina Railroad (which virtually only carries the mineral) and the cement industry, which uses ashes from coal combustion.
According to the Brazilian Association of Mineral Coal (ABCM), this production chain represents 30% of the economy in southern Santa...
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