January 1, 2010

Brazil: Latin America’s Beacon

Sonal Patel

Hydropower

In 2008, Brazil’s hydropower resources (excluding small hyrdo) made up 77.7 GW, or 77.3% of its total installed capacity of 100.5 GW. Yet according to the Energy Research Office, much of the country’s massive hydro potential has barely been exploited (Figure 3). In the MME’s "10 Year Energy Expansion Plan," hydropower generation capacity is expected to grow 41% to 109,058 MW between 2007 and 2016. Almost 90% of this capacity is expected to come from new large hydroelectric plants in the Amazon. Hydroelectric generation capacity in the Southeast and at Itaipú — the massive hydropower plant in Paraguay, from which Brazil imports almost 20% of its power — will remain flat until 2016. There will be slight capacity increases in the South and Northeast, however — a shift from Brazil’s traditional concentration of hydroelectric capacity in the Southeast.


3. Brazil’s hydropower potential. The EPE (Empresa de Pesquisa Energética), Brazil’s Energy Research Office, estimated in 2008 that the nation had two-thirds as much unused hydropower potential as what it was already using. Source: EPE


Among the three largest projects are the 3,300-MW Jirau, the 3,150-MW Santo Antônio — both on the Madeira River, in the Amazonian state of Rondônia — and the massive 11,000-MW Belo Monte Dam in the state of Pará, on the Xingu River. The Santo Antônio, a project estimated to cost US$5.94 billion, is expected to be completed by 2012, while the US$3.9 billion Jirau project is expected to be completed by 2013. The long-anticipated Belo Monte is in the pipeline, but it has been delayed by massive national and international protests. Critics say it will flood 400 square kilometers of agricultural land and forest and will directly impact the Paquiçamba reserve of the Juruna indigenous people.

In addition to these projects, Brazil is considering the construction of six bilateral hydroelectric stations with Argentina, Bolivia, and Peru. These projects are thought capable of providing between 10 GW and 12 GW of power to the region. Brazil remains wary of depending on its neighbors for imported power, however, owing to the recent disruption in gas supplies due to a political crisis in Bolivia as well as long-standing tensions with Paraguay regarding the price of power from the Itaipú dam. That controversy was seemingly resolved after the July 2009 renegotiation of the Itaipú agreement: In a surprising move, Brazil agreed to a more equitable payment to Paraguay for electricity from the project. It also allowed Paraguay to sell power directly to Brazilian companies instead of solely through the Brazilian electricity monopoly.

Brazil’s commitment to the expansion of hydropower has been met with cynicism from power industry experts who caution against reliance on a single source — even though hydro is much cheaper than thermoelectric generation and contributes minimally to global warming (see the sidebar "Of Hydropower and Combustion"). There are also concerns that large dams are expensive and time-consuming to build, and new projects have experienced delays, especially in obtaining environmental licenses. Then there are concerns about uncertain rainfall and the fact that large dams are likely to be located far from centers of demand, which requires large investments in transmission.

An emphasis on small hydro — projects between 1 MW and 30 MW — is therefore emerging. Some 2,235 MW of small hydro capacity had been installed in Brazil as of 2007, but estimates suggest that Brazil has the potential to build more than 1,600 small hydroelectric plants, which could add almost 15,000 MW of generating capacity to the grid. The government, too, is making it easier: Developers are exempt from bidding to obtain grants and need only obtain a permit from electricity regulator ANEEL. In 2008, for example, Brazilian oil company Petrobras announced it would bring 13 small hydropower projects totaling 288 MW online at an investment of almost US$680 million.