Thanks to government policies encouraging economic growth, development of hydroelectric projects in Brazil is going strong, with projects under construction ranging in size from the 11,200 MW Belo Monte facility down to just a few megawatts.
Elizabeth Ingram is associate editor of HRW-Hydro Review Worldwide.
Brazil is the ninth largest energy consumer in the world, according to the Energy Information Administration in the USA. Total primary energy consumption in the country increased by close to a third between 2001 and 2011, primarily due to sustained economic growth. With regard to electricity, Brazil had 104 GW of installed capacity in 2008, with the single largest share being hydroelectricity. In 2009, the country generated 461,000 GWh and consumed 421,000 GWh. Hydropower accounted for 84% of this generation.
To further drive economic growth in Brazil, in 2007 the Programme to Accelerate Growth, or PAC, was launched. Investment under this program was planned to amount to BRL504 billion (US$236 billion in 2007) until 2010. PAC is based on five blocks: investment in infrastructure, credit and financing promotion, enhancing the investment climate, tax exemptions and improvement of the tax system, and long-term fiscal measures. The BRL504 billion in infrastructure spending was to be distributed as BRL275 billion ($175 billion) for energy-related projects, BRL171 billion ($109 billion) for social infrastructure and BRL58 billion ($37 billion) for logistics.
In March 2010, PAC 2 was released, a continuation of the program that promised spending of BRL959 billion ($582 billion) from 2011 to 2014. For the energy portion, BRL465.6 billion ($296 billion) is to be invested in electricity generation and transmission, petroleum and natural gas, the maritime industry, renewable fuels, energy efficiency and mineral research. Investment in energy after 2014 as a continuation of this program is estimated to be BRL627.1 billion ($343.9 billion).
As of 2007, there were more than 600 hydroelectric projects operating in Brazil with a total capacity of more than 73,000 MW, according to the Ministry of Mines and Energy. And Brazil is home to the second largest hydroelectric facility in the world in terms of installed capacity: 14,000 MW Itaipu on the Parana River on the border between Brazil and Paraguay. The first unit began operating at Itaipu in May 1984. Hydro development activity in the country is scheduled to continue at a rapid pace, with more than 31,000 MW of new projects scheduled for completion by 2017.
Many hydroelectric projects have begun operating in Brazil over the past year or so. For example, in July, Agencia Nacional de Energia Eletrica (ANEEL), the utility sector regulator in Brazil, announced that installed capacity of power generation projects in operation in the country reached 114,220 MW. Hydroelectric facilities accounted for 67.77% of the Brazilian energy mix at the end of June.
In March 2011, ANEEL authorized test operations at the 51 MW Sao Jose hydro plant. Owner Alupar was authorized to test Unit 1 at the plant, which is on the Ijui River in Rio Grande do Sul State.
And in January 2011, ANEEL authorized test operations of Unit 3 at the 855 MW Foz do Chapeco project. The first unit began operating in October 2010 and the second in November 2010. The plant, on the border between Rio Grando do Sul and Santa Catarina states, is 51% owned by utility group CPFL Energia, with 40% owned by federal power company Eletrobras Furnas and the remaining 9% owned by local power company CEEE.
ANEEL also approved test operations of the 21 MW Nova Aurora project, on the Verissimo River in Goias State, in December 2010. The small plant is owned by Goias Sul Geracao de Energia.
And in November 2010, six hydro stations with a total capacity of 645 MW in Goias State were inaugurated. The six projects had a total cost of BRL2.9 billion ($1.72 billion). Construction of these stations was intended to boost the electricity capacity of the less economically developed cities in Brazil’s interior and thereby attract more outside investment, according to officials.
Other projects are essentially complete in Brazil. One example is the 334 MW Simplicio complex. As of May 2011, this facility was more than 90% complete, according to state-run power company Eletrobras Furnas. At that time, this BRL2.2 billion (US$1.3 billion) complex on the Paraiba do Sul River in Minas Gerais State was slated for inauguration in August, as HRW goes to press.
Work is under way at scores of hydroelectric projects around Brazil. Some of the rivers seeing development work include Antas, Jari, Madeira, Sapucai, Teles Pires, Tiete and Xingu.
In July 2011, diversion of the Madeira River began as part of construction of the 3,150 MW Santo Antonio project. Eletrobras Furnas said this work will mean the start of the gradual filling of the reservoir, with commercial operations expected to begin in December. Furnas holds a 39% stake in the Madeira Energia group that controls Santo Antonio Energia, owner of the plant.
Remote Hydro Signals Transmission Investment
With the current level of hydro development under way in Brazil, and particularly large hydro installations, there is a clear need for significant development of the country’s long-distance transmission infrastructure.
And several recent announcements show considerable evidence of this trend. For instance, in late August 2011, Voith Hydro signed a contract to supply equipment for 1,850 MW Teles Pires, one of Brazil’s largest hydro projects.
Under a contract of almost €220 million (US$319 million), the project will be installed on the border of the Mato Grosso and Para states and is another important project within the PAC (Brazilian Growth Acceleration Program).
As well as supplying the 404 MVA generators for the plant’s five Francis turbines, the control and automation systems for the plant and its substations, and mechanical and electrical balance of plant, Voith Hydro is responsible for delivery of the associated transmission infrastructure.
Meanwhile, Nexans has been awarded a $28.77 million contract by the IE Madeira consortium to deliver the overhead lines for the world’s longest power transmission link, Brazil’s Madeira River Power Interconnection.
Nexans overhead conductors will be used to construct the first transmission line for the Madeira River Power Interconnection project, consisting of a 2,375 km high-voltage direct current (HVDC) link between the new Rondonia hydroelectric plant and the city of Sao Paulo.
This new HVDC link, the first of two, will transmit 3,150 MW of power produced by the Rondonia plant in northwest Brazil to Sao Paulo, Brazil’s main economic center.
HVDC transmission at 600 kV is being used to minimize transmission losses over the long distance. Nexans has been selected to provide the conductors for the first circuit by IE Madeira, a consortium comprising the utilities Furnas, Chesf and CTEEP. The first transmission line is scheduled for installation in the last quarter of 2011, while the entire project should come on line by 2013.
ABB has won also recently won orders worth about $80 million from Itaipu Binacional, operator of the 14,000 MW Itaipu project on the border between Brazil and Paraguay, to build a new substation in Paraguay and expand an existing installation to support a new 500 kV transmission line now being built that will help meet increasing demand for electricity in Paraguay. The existing 500 kV substation in Itaipu will also be expanded to enable the connection. The new Villa Hayes substation, located some 350 km from Itaipu, is expected to be completed in 2013.
The Norte Energia consortium began construction at the 11,200 MW Belo Monte project on the Xingu River in Para State in June 2011, after environmental regulator Ibama issued the final installation license for the project. Earthmoving work began at the site in March 2011, shortly after a Brazil court lifted an order that suspended construction of the Belo Monte project. In late February 2011, a federal judge had ordered construction be suspended on the grounds that the necessary environmental provisions had not been met.
Ibama said Norte Energia will have to invest BRL100 million ($63 million) in environmental conservation work in the area surrounding the project. In total, the Belo Monte project is expected to cost about BRL20 billion ($11.2 billion) and begin operating in 2015.
Brazil-based mining giant Vale approved a plan in May 2011 to buy a stake in the Belo Monte project. Vale agreed to buy a 9% stake in Norte Energia, which previously was held by Brazil’s Bertin Group. Vale expects to contribute about BRL 2.3 billion ($1.5 billion) to the project.
And in February 2011, both Alstom → of France and Impsa of Argentina signed contracts to supply equipment for the project. Imspa signed a US$479 million contract for the supply of four turbine-generator units with a total capacity of 2,500 MW, including penstocks, lifting equipment and supervision of the assembly and start-up operations.
Alstom, as leader of a consortium that includes Voith Hydro of Germany and Andritz of Austria, signed a €500 million ($682.3 million) contract to supply 14 units of 611 MW Francis turbine-generator sets and six smaller bulb units. For its part of this contract, Alstom will supply seven of the Francis units, hydromechanical equipment and associated gas-insulated substations for the 14 units.
That same month, Ibama issued the installation license for the 373 MW Santo Antonio do Jari project. Consortium ECE Participacoes is developing the project on the Jari River on the border of Amapa and Para states. The consortium acquired the 30-year contract for this project in an energy auction in 2010, for energy delivery beginning in 2015.
Alstom signed two contracts with Brookfield Renewable Power in February 2011 to supply equipment for the 20 MW Pezzi and 29 MW Serra dos Cavalinhos II plants on the Antas River in Rio Grande do Sul State. For each of these projects, Alstom will supply two Kaplan "S" turbines, generators, speed controllers, voltage regulators, and assembly and commissioning supervision for the equipment. Pezzi is scheduled to be commissioned in September 2012 and Serra dos Cavalinhos II in November 2012.
And Copel, the state power firm in Parana, signed a concession agreement in January 2011 with the Brazilian mines and energy ministry to build and operate the 300 MW Colider project on the Teles Pires River. Copel will invest about BRL1.3 billion ($778 million) in the project, in Mato Grosso State. Copel won the project in a government auction in July 2010 with a power rate of BRL103.4/MWh. Colider is planned to come on line in December 2014.
Sao Paulo state water and power company Emae started construction of its 25 MW Pirapora project in November 2010. The facility, on the Tiete River in Sao Paulo State, will have two 12.5 MW turbine-generator units and is expected to begin operating in 2012. The Pirapora project was traded in the country’s A-5 new power projects auction, which was held in July 2010. Emae won the concession with a pledge to sell power generated at BRL154/MWh.
Also in Sao Paulo State, a 25.5 MW plant attracted a BRL143 million ($84.2 million) investment from → Volkswagen do Brasil, a unit of German carmaker Volkswagen AG. This investment was announced in November 2010. The unnamed plant, on the Sapucai River, will contain three turbines and is due to be launched in 2013. It is near the company’s other hydro project, the 22.68 MW PCH Celan, which was inaugurated in March 2010.
Other Hydro Development in Latin America
Brazil is definitely not the only country in Latin America where hydro development work is ongoing. Below is a snapshot of hydro activity in some other countries in the region.
Argentina: The 9.4 MW Salto Andersen project, in Rio Negro Province, began operating in June 2011. Investment in the project, built by Spanish group Isolux Corsan, is expected to hit US$27 million. And in October 2010, the federal government signed a contract with authorities in Neuquen province, giving the go-ahead for 640 MW Chihuido I. The plant will contain four turbines and will be developed by a temporary business union consisting of regional firms Electroingenieria, Constructora OAS and Hidrocuyo. Construction is expected to take four years.
Bolivia: Utility Empresa Nacional de Electricidad is working to build the 80 MW Misicuni project. The Inter-American Development Bank is lending US$101 million for the project, and contracts have been awarded to RSW of Canada and Servicons Geotechnics of Bolivia. The company is seeking contractors to build a tunnel extension, tunnel liner, surge shaft, safety valve, penstock, powerhouse with two Pelton turbines and re-regulation reservoir.
Chile: Generator Endesa submitted a new environmental impact assessment for construction of the 150 MW Los Condores project in March 2011. Costs of the run-of-river project are about US$400 million. Los Condores will use water from the Laguna del Maule Reservoir and generate about 560 GWh/year. Work on the project is expected to begin in 2012, with operations set to begin within the next five years. In addition, the 35 MW Laja run-of-river plant is projected to begin operating in 2012. The facility, which will be managed by GDF Suez subsidiary Eolica Monte Redondo, is expected to cost US$112 million to develop.
Colombia: Construction is nearly complete on the 20 MW Alto Tulua and Bajo Tulua projects in Valle de Cuaca department. Epsa is developing these projects, both of which are expected to begin operating before the end of 2011. And developer EPM is working on 2,400 MW HidroItuango, with an eight-turbine powerhouse on the Cauca River. Total cost of the project is expected to reach US$5.5 billion, and it is to begin operating in 2018.
Costa Rica: Enel Green Power began construction of 50 MW Chucas in May 2011. The project, in Alajuela and San Jose provinces, is expected to be complete in mid-2013. The powerhouse will generate 218 GWh annually. And the Costa Rican Institute of Electrical Power is moving forward on development of the 311 MW Reventazon project. This US$1.2 billion project, with four Francis turbines, is anticipated to be completed in 2016.
Ecuador: Commercial operation of the 26 MW Ocana project is expected by October 2011. Ocana, on the Canar River in Canar province, is owned by state generator Elecaustro. Construction of the project began in 2008, and it is expected to produce 203 GWh/year. And in January 2011, Ecuador’s president inaugurated the 160 MW Mazar plant in Azuay Province. Mazar, on the Paute River, was built with a nearly US$600 million investment.
El Salvador/Guatemala: Prefeasibility studies are under way for the 138 MW Paz project between El Salvador and Guatemala. The project would be made up of the 72 MW El Job and 66 MW Piedra de Toro plants and will be developed by CEL in El Salvador and Inde in Guatemala. And Enel Green Power and Simest of Italy are developing the 84 MW Palo Viejo project. The €185 million (US$227 million) run-of-river project, on the Cotzal River in Guatemala, will produce 370 GWh a year, Enel says.
Honduras: Construction has begun on the 104 MW Patuca 3 project on the Patuca River. Empresa National de Energia Electrica is building the project, with test operations to begin in October 2013 and commercial operation in 2014. The powerhouse is to contain two vertical Kaplan turbines.
Nicaragua: Initial works on the 220 MW Tumarin project began in March 2011. Centrales Hidroelectricas de Centroamerica is developing the project, on the Grande River in Maagalpa department. Tumarin could begin operating by early 2015. And in November 2010, the government said it would take four years for construction of the 250 MW Brito project, which represents an investment of $600 million. The project, on the San Juan River, will be the single largest electricity generating source in the country when it is complete.
Panama: Sixteen projects with a total investment of more than US$1 billion are being developed to satisfy domestic power demand. These private sector projects, with a total capacity of 700 MW, are expected to be completed by 2015. In the province of Chiriqui, two run-of-river stations are being built with a combined capacity of 85 MW. Together, Pando and Monte Lirio will generate 430 GWh annually. Electron Investment SA, a Spanish-Panamanian hydro developer, is in charge of both projects. Total cost is estimated to be more than $290 million.
Peru: In May 2011, ABB won a contract to provide equipment and engineering for the 168 MW Cheves project. Empresa de Generaction Electrica Cheves S.A., which is 100% owned by SN Power of Norway, is developing Cheves. The project, to be completed by November 2013, will be executed in consortium and led by ABB Canada with Rainpower from Norway and Jeumont from France.
The Energia Sustentavel do Brasil consortium, which is developing the Jirau project on the Madeira River in Rondonia State, plans to boost capacity of this powerhouse by 450 MW. Six new turbines will be added, bringing the total to 50. Each unit has a capacity of 75 MW. The 3,750 MW project was initially expected to cost BRL10 billion ($5.7 billion). Jirau is scheduled to begin commercial operation in March 2012.
Several hydroelectric projects are proposed for future development in Brazil, and other studies are being conducted.
One example is the 2,200 MW Garabi-Panambi hydroelectric project. The final feasibility assessment for this project, on the Uruguay River between Brazil and Argentina, was expected to be concluded in the first half of 2011. Garabi-Panambi will feature two dams: 1,150 MW Garabi and 1,050 MW Panambi. The complex will be operational as early as 2013.
In addition, Eletrobras is performing feasibility studies for the 6,100 MW Sao Luiz do Tapajos plant. The studies are to be concluded in May 2012. Sao Luiz do Tapajos will be the largest plant in the planned 10,600 MW Tapajos complex, which also will include the 2,300 MW Jatoba, 528 MW Cachoeira dos Patos, 881 MW Jamanxin and the 802 MW Cachoeira do Cai powerhouses. The complex will be on the Tapajor River in Para State. Eletrobras plans to tender the four plants separately to avoid difficulties obtaining environmental licenses for the projects.
It’s not all large hydro
Although there are many large projects being developed in Brazil, there is no shortage of work in the small hydro sector (plants with less than 20 MW of capacity).
For example, in April 2011, ANEEL authorized commercial operations at two units of the 3 MW Albano Machado project. The plant is on the Lajeado do Lobo River in Rio Grande do Sul State and is owned by Rio do Lobo Energia.
ANEEL also authorized test operations at the 11.4 MW Areia project, owned by Areia Energia and located in Tocantins State, in March 2011. The facility was expected to begin operating commercially once the test results were submitted.
And ANEEL authorized test operations at the 10 MW Caju plant, in Santa Catarina State, in December 2010. The hydro project is owned by local power company Energisa.
Finally, ANEEL authorized commercial operation of one of the two turbine-generator units at the 19.4 MW Figueiropolis plant. The plant, in Mato Grosso state, is owned by Companhia Hidroeletrica Figueiropolis.
In other small hydro news, Brazil’s mines and energy ministry added a small hydro project to Reidi, the government’s special infrastructure development incentives program, in November 2010. The 19 MW Cavernoso II project in Parana State is owned by Copel. The Reidi program provides incentives including a five-year tax holiday on goods and services and is part of PAC.
Not all hydro projects are moving forward smoothly in Brazil. In June 2011, Peru’s energy and mines ministry issued a resolution that terminated a temporary concession granted for the 1,500 MW Inambari project. This concession had been granted to Emprea de Generacion Electrica Amazonas Sur (Egasur), comprised of Eletrobras, Eletrobras Furnas and OAS. Inambari was the flagship project of a power supply and export agreement between Peru and Brazil that was signed in June 2010.
Despite this setback, Brazilian state-run utility holding group Eletrobras announced just a week after this decision that the Inambari project is still viable. Issuance of a definite concession could take place after a public hearing held to discuss the project.
And in March 2011, Eletrobras Furnas pushed back the completion date for its 52.2 MW Batalha project to May 2012. Originally, this facility, on the border of Minas Gerais and Goias states, was set to begin operating in June 2011. Delays in the environmental licensing process are behind the postponement, reports indicate. At the time of the delay, construction work was nearly 75% complete, a spokesperson for the company said. The project is estimated to cost BRL740 million ($443 million).
Rehabilitation and modernization
Another area of work occurring at hydro plants in Brazil is rehabilitation and/or modernization of existing, aging powerhouses.
For example, Furnas Centrais Eletricas is rehabilitating and modernizing its Furnas and Luiz Carlos Barreto de Carvalho plants. Together, these two facilities have a generating capacity of 2,266 MW, and both have been in operation since the 1960s. Furnas has embarked on a program to restore the turbines, generators and mechanical equipment and to refurbish the control, supervision and protection systems at the two plants, along with related equipment. The goals of this work are to: increase power production, lower maintenance costs and double the plants’ service life.
The rehabilitation and modernization program is expected to cost US$600 million and is being financed, in part, through a US$128 million loan from the Inter-American Development Bank that was awarded in August 2011.