The future of Brazil may lie with the Madeira River in the far reaches of the Amazon. A £5.7bn plan to build two hydroelectric dams will tame its flow for the country’s growing power needs. CJ Schexnayder reports.
When completed in 2012, the Sãn Antõnio and Jírau dams are expected to be the largest run-of-the-river projects ever built and, when fully online in 2016 they will provide a maximum combined generation capacity of 6.45GW – about 8% of Brazil’s total generated electricity.
Yet the massive project may only be a prelude of what is to come. More than 80% of Brazil’s energy needs are supplied by hydroelectric sources but there has not been a major dam project constructed since the mid-1990s. That has led to steadily rising industrial consumer rates over the past several years but most observers believe it will spread to the public sector before long.
Brazil’s current growth rate of about 4.8% per year has it set on a crash course with another electricity crisis. One electricity-industry group, the Acende Institute, projects a 30% chance of blackouts by 2012 at current rates of growth and usage. Another analyst group, FGV, estimates the country will lose up to 8.6% of gross domestic product growth by 2015 due to increased electricity costs.
For many, the scenario is frighteningly familiar. In 2001, Brazil’s government ordered a 20% cut in electricity consumption in a desperate effort to shore up the severe lack of capacity. The result was a massive blow to the economy and discontent over rationing and rolling blackouts was a key factor in the dramatic victory by Luiz Inácio Lula da Silva in the 2003 presidential elections.
To counter that grim scenario Brazil is pushing a 10-year energy plan requiring the creation of almost 27GW of installed electricity capacity and the most obvious alternative is increasing hydroelectric production.
“Essentially we are talking a pair of Madeira projects every year for the next five to 10 years,” says president of the Brazilian contractor Odebrecht Marcelo Odebrecht. “It has to happen or there will be a serious lack of energy in the country. And this is not just in Brazil, it’s a problem all over Latin America.”
Hydroelectric capacity in Brazil hovers around 75GW which is less than a third of the country’s estimated national hydro generation potential of 258.5GW, according to the Mines and Energy Ministry.
What is different about this strategy is that it has prioritised the Amazonian Rivers far into the country’s interior to achieve this – stirring a firestorm of opposition from an array of foes.
Environmental groups acknowledge the country’s growing need for electricity but say the long-term costs are being ignored.
Lula da Silva’s government has stated its intent to auction seven major hydroelectric projects by 2011 to meet the requirements of the energy plan. To achieve that, his administration has drastically changed the environmental clearance process that has deterred such projects in the past.
Last June, the country’s environment minister, Carlos Minc, announced that an overhaul of the licensing process was underway to reduce the time needed to green light large-scale projects by as much as one half.
Currently, obtaining such licenses from Brazil’s Environmental Agency (IBAMA) requires between 21 and 37 months but Minc says streamlining bureaucracy in the agency could bring that down to as little as 13 months.
Those actions have set off alarms among environmental groups concerned about the impacts of such large projects on Brazil’s pristine Amazon basin. They see the Madeira projects as a precursor to an onslaught of future big-ticket dam projects.
The most controversial is the proposed 11GW Belo Monte scheme on the Xingu River. In addition a 2.16GW project at Marabá on the Tocantins River and a massive 9GW project at São Luis on the Tapajos River are awaiting environmental permits.
Latin America program director of California-based International Rivers Glenn Switkes says the Brazilian government is almost completely ignoring the long-term costs of these projects in its rush to get them built. The possibility that any other option might be even feasible is dismissed due to the perceived ease of building hydro projects, he says.”It’s kind of like being an alcoholic in that until you acknowledge the problem it’s not going to get better,” he said. “In Brazil there is still absolutely no recognition that there are any problems or any impact from building dams on this scale.”
Yet, one of the reasons the government chose the run-of-the-river design for the Madeira projects was the need to address many of the most pressing environmental concerns, particularly by minimising the reservoir footprint. But environmental groups still say more than 400km2 of rainforest will be inundated, hundreds of residents displaced and rare fish and mammals endangered.
The first dam, Sãn Antõnio, will span the Madeira River just a few kilometres south of Pôrto Vehlo, a town with a population of about 330,000 people which is also the state capital of Rondônia. Last December the project was awarded to the Madeira Energia consortium led by Odebrecht along with power utilities firm Furnas and Companhia Energetica de Minas Gerais (Cemig).
The consortium, which also includes construction firm Andrade Gutierrez and the banks Santander of Spain and Banif of Portugal, offered to sell electricity at £25.06 per MWh – approximately a third less than the capped tender price.
Construction, according to the consortium engineers, will be done in two stages. The first being carried out in a terrain on the left shore of the river protected by cofferdams where roughly half the dam and the spillway will be excavated and built. The river will then be routed through the completed section and new cofferdams will protect the works in what is now the riverbed.
The process for the 3.3GW Jírau project followed a somewhat different path due to the fact that the winning consortium Energia Sustentável do Brasil (CESB) chose a location and design for the project different from the original proposal.
CESB won the auction in May offering £24.76 per MWh – almost 22% below the cap. CESB is led by France’s Suez with engineering firm Camargo Corrêa and two Brazilian power companies Eletrosul and Chesf.
A key reason cited by CESB for its low bid was the decision to move the dam from the proposed site at Jírau to another location (Priest Island) further downstream – a move that will allow them to save almost £355M in construction costs.
The problem with the original Jírau location was an overabundance of hills, says project manager Luis Américo Rojo.
“To excavate the site would have cost as much as it would to build the dam itself,” he said. “It’s a location better suited to a traditional dam and we felt this new location was much more advantageous for a run-of-the-river dam.”
CESB estimates that the original location would have required excavating an additional 50M.m3 over the 12M.m3 that will have to be removed at Priest Island.
The two dams that make up the Madeira projects will not only be the largest run-of-the-river projects ever built, they will also sport the largest Bulb turbines as well. Each will boast 44 turbines with 8m diameter rotors and capable of generating 75MW of power.
“It’s a question of scale, not technology,” says Odebrecht project director Jose Bonifacio Pinto.
“The know-how to build this kind of turbine is already there.”
The Sãn Antõnio dam last month received its final licensing approval through IBAMA. The Jírau project is still awaiting this last license which must be obtained before preliminary site-clearing work can begin.