But he told a sugar cane bioelectricity seminar that there were too few projects and that costs were too high in Brazil, which produces one-third of the world's sugar cane.

Cane represents some 14 percent of the primary energy used in Brazil. But sugar cane's main energy product, ethanol, accounts for only 4 percent of final energy consumption.

"This is due to inefficient sugar cane processing," said Jayme Buarque de Hollanda, Director General of the National Institute of Energy Efficiency.

Improved technology would result in the production of more than 60 TWh (terawatt hours), or around 17 percent of Brazilian energy supply in 2004, according to the institute.

The first sugar cane energy revolution took place in the 1970s when a quadrupling of oil prices prompted Brazil to launch a program to produce sugar-cane based fuel alcohol, also known as ethanol, to reduce imports and save foreign exchange.

Now, Brazilian electricity demand is expected to rise to 80 TWh in the next five years, requiring an extra 15,000 MW generation capacity.

Part of this extra production could come from sugar cane, according to the institute.

"Bagasse (cane waste) offers great energy prospects, but needs a lot of investment and long-term planning," said Professor Isaias Macedo of Campinas University (Unicamp), Sao Paulo state.

He added that as long as oil prices stayed above $30 a barrel, this would stimulate development of new technology within 5-10 years to make sugar byproducts, notably biodegradable plastics, at competitive prices.

Laura Tetti, adviser to the Sao Paulo Cane Agroindustry Union (Unica), said that Brazil's cost of converting cane and other biomass into renewable fuels was much lower than in the United States and Europe.

Brazil, which produced more than 16 billion liters of ethanol this year from 2.7 million hectares, could easily increase cane planting to meet a forecast rise in world demand, she said.