Why GE just built its big new R&D center in Brazil

Dan Primack – Fortune, 11/13/2014

GE’s vice chairman explains why the company picked Rio de Janeiro as the location for first new global R&D center in over a decade. General Electric GE -0.41% today opened the doors to its first new global R&D center in more than a decade, with a facility in Rio de Janeiro that eventually could employ 400 people. John Rice, vice chairman of GE and CEO of its global growth and operations division, was in Brazil for the launch, and took some time to speak via phone with Fortune.

What follows is an edited transcript of our conversation:

FORTUNE: Why is GE opening such a large R&D facility in Rio de Janeiro?
RICE: Brazil and Latin America have been great markets for us for a long time. So when you do something like this, it’s really about the quality of the people we can find to work there. You can open a center but if you can’t hire great people, it self-selects to something not very significant. There’s also the fact that here we have some very progressive participants in the world of oil and gas, including Petrobras, who are really pushing the boundries in terms of going to deeper, more complicated places. We have to learn how to support them by developing new capabilities both for them and with them.

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Some companies profit as Brazil struggles to secure power

Todd Benson and Marguerita Choy – Reuters, 09/11/2014

A small group of energy companies in Brazil are increasing revenues at a time when the country is grappling with its worst power crisis in more than a decade, taking advantage of sky-high prices to sell electricity in the spot market.

Power generators that have managed to produce extra energy in recent months or who aren’t restricted by long-term supply contracts are being rewarded with prices up to six times higher than the average cost on conventional electricity contracts.

At the same time, distributors that had to resort to the short-term market to fulfill demand increases are facing financial burdens and are being rescued by the government. The situation underscores the imbalances of the Brazilian power system, which has come under stress because of a prolonged drought. The energy crunch has also become a hot topic in Brazil’s presidential race, with the government facing criticism for not ensuring a stable power supply at reasonable prices.

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Brazil soccer field harnesses player-power

The Associated Press – CBS News, 09/11/2014

Kids streaking back and forth on a soccer field in scorching tropical heat promises to produce something more than buckets of sweat.

Billed as Brazil’s first player-powered soccer pitch, a field inaugurated Wednesday in a Rio de Janeiro slum harnesses the kinetic energy of players’ movements to provide nighttime illumination. Soccer legend Pele was on hand for the pomp-filled event in the Morro da Mineira slum, which saw a local youth team put the system to the test.

Under the project, sponsored by Royal Dutch Shell, around 200 energy-capturing tiles developed by British startup Pavegen were installed the width and breadth of the field and covered by a layer of AstroTurf. Working in conjunction with solar panels also installed around the field, the player-powered tiles feed electricity to a system of floodlights overhead.

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Brazil tries to defuse conflicts with Indians over land, dams

Anthony Boadle and Caroline Stauffer – Reuters, 06/04/2013

Lawmakers from the Brazilian farm state of Mato Grosso do Sul asked President Dilma Rousseff’s government on Tuesday to send troops to end land invasions by Indians claiming their ancestral territory.

Justice Minister Jose Cardozo said a request for troops would have to come from the state governor and announced he will meet with the Indians on Thursday in a bid to reach a settlement. The government is seeking to defuse mounting conflicts with indigenous tribes over farm land and hydroelectric dams in the Amazon.

Air Force planes flew 144 Munduruku Indians to Brasilia for talks to end a week-long occupation of the controversial Belo Monte dam on the Xingu River, a huge project aimed at feeding Brazil’s fast-growing demand for electricity.

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Rains bring some relief to depleted reservoirs of Brazil’s hydroelectric plants

The Washington Post/AP, 01/15/2013

Recent rains have brought some relief to the depleted reservoirs of Brazil’s hydroelectric plants but have done little to dispel concerns over the country’s ability to fulfill its energy demands for the year.

A hotter than usual summer and lack of rain have caused water levels at hydroelectric dams in most of the country to drop to a third of their capacity. The levels are similar to those registered in 2001, when rationing was imposed and blackouts occurred.

The government has said Brazil will not resort to energy rationing because the country has thermal power plants that can be activated.

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Don’t mention the B-word

The Economist, 02/10/2011

Graphic: The Economist

It was not a “blackout”, said Edison Lobão, merely a “temporary interruption of the electricity supply”. Brazil’s energy minister was speaking on February 4th after nearly 50m people across eight states in the country’s north-east had spent most of the night without power. Engineers are still investigating, but their preliminary conclusion is that a component in a substation failed just after midnight. That caused safety systems to malfunction, and transmission lines and then a power station to shut down.

Mr Lobão is trying to reserve the b-word for something more serious, which his government is determined to avoid: a big and sustained mismatch between electricity supply and demand. That last happened in 2001-02, after decades of growing energy use and low investment were followed by drought (70% of Brazil’s power comes from hydroelectric dams.) Back then, only rationing kept the lights on, and the after-effects dampened demand for some years.

Electricity use is growing strongly once more, rising by 7.8% last year. That is partly because Brazil’s economy is booming. But even if this changes, power use is unlikely to fall. Brazilians who have recently levered themselves out of poverty would give up much else before unplugging their first-ever fridges and washing machines. Luz Para Todos (Light for All), a government rural-electrification programme launched by Dilma Rousseff, the president, when she was energy minister, has hooked up more than 2.4m homes since 2003, and is continuing. The government reckons demand for electricity will rise by 5% a year over the next decade. Officials plan to mobilise investment totalling some 214 billion reais ($128 billion), from both private and public sources, in order to meet it.

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Brazil president orders probe of blackout

Jonathan Wheatley-The Washington Post, 11/12/09

Brazilian President Luiz Inácio Lula da Silva on Wednesday ordered an investigation into why more than half the country, including the major cities and industrial center, lost electricity for several hours Tuesday night.

All of neighboring Paraguay also lost power, but only for about 15 minutes.

The blackout, which the Brazilian energy ministry said affected 18 of the country’s 26 states and brought chaos to Sao Paulo, Rio de Janeiro, Belo Horizonte and Brasilia, the capital, raises doubts about the reliability of the country’s infrastructure a little more than a month after Rio de Janeiro was chosen to host the 2016 Olympic Games.

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