In the four decades leading to the publication in 2007 of the National Energy Plan 2030, total energy consumption in Brazil expanded at an average 3% / year. In 1970 wood was still the main energy source, supplying 46% of national demand, with oil coming second at 36% (Ministry of Mines and Energy 2007). The next two decades showed significant changes in the Brazilian energy matrix, with oil largely fuelling the economic boom of the 70’s. Severe oil crises in the mid-70’s and early 80’s once again changed the scenario, leading the country to pioneer large-scale energy infrastructure programs exploring sugar-cane and hydropower, mainly aimed at decreasing the dependence of oil. In the late 1970’s Brazil started investing heavily in hydroelectric dams: while the share of hydropower in electricity generation decreased 4.7% globally in four decades (International Energy Agency 2014) , in Brazil it increased over 500% in roughly the same period (Empresa de Pesquisa Energetica 2013). From 1970 to 2012, the total energy supply in Brazil increased from 66.9 Mtoe to 281 Mtoe (420%). Electricity generation capacity went from 45 TWh to 592.8 TWh (over 1300% growth) (IEA.org 2015), and the share of hydropower in electricity supply grew from 15% to 84.5% (563%) (Empresa de Pesquisa Energetica 2013).
Current Scenario (2015) - Hydropower
The significant investment in hydropower infrastructure carried out by the Brazilian government over the last four decades reflects both a strong need for increased supply, imposed largely by economic and demographic growth, as well as the wide availability of water resources. With a net installed capacity of 84 GW, Brazil is the world’s second largest producer of hydro electricity (415 TWh in 2012), behind China (872 TWh in 2012) (International Energy Agency 2014). Despite having currently explored approximately 30% of its hydropower potential, Brazil faces considerable challenges in future expansion of the hydro sector - two-thirds of the national territory is covered by the Amazon and the Cerrado (tropical savannah), which are biomes of high environmental interest, and 70% of the country’s hydroelectric potential lies in these areas (Ministry of Mines and Energy 2007).
The National Energy Plan estimates that electricity demand in Brazil will be somewhere between 950 and 1250 TWh/year in 2030, requiring the country to nearly double the supply in the next 15 years. The Brazilian government, while acknowledging the risks involved, as well as the need for reliable assessment of environmental and social impacts, claims that current criticism - mostly by NGOs - is based on outdated views, which do not take into consideration positive results from existing hydropower infrastructure projects. The PNE 2030 briefly mentions (but does not specify) “recent projects” whose communities have achieved higher scores in the Human Development Index (HDI) than surrounding region.
Using similar reasoning to other developing countries, Brazil states in the PNE 2030 that developed countries have already, in many cases, maximized exploration of their natural resources, which were instrumental in their development process. Meanwhile, countries such as Brazil and China - which count on abundant unexplored potential renewable resources - still have a long way to go towards improving the quality of life of its citizens.
Future Projections – Plano Nacional de Energia 2030 (PNE 2030)
In 2007 the Brazilian government published the National Energy Plan (PNE 2030), a detailed analysis that identified the main challenges the country might face in terms of energy demand up to 2030, defining a strategic framework for policy-making and investment in new energy infrastructure. The plan considered potential scenarios regarding global development leading up to 2030. These ranged from very positive (“One World”) - where countries would be politically and economically aligned and major problems would be solved, which would allow greater economic growth and demand higher energy supply - to quite negative (“Island”) - in which conflicting national interests would encumber global alignment, compromising growth and allowing for lower energy needs (Empresa de Pesquisa Energetica 2007).
Nationally, the PNE 2030 looked into competitive advantages Brazil should try to leverage, such as a large internal market, significant biodiversity, low-cost renewable energy resources, and globally competitive sectors (agribusiness, commodities). The document also considers areas of weakness: limited infrastructure, high inequality, low productivity, high capital costs, administrative conflicts, etc.
The final global scenario adopted by the PNE 2030 for energy forecasts was one of reasonable growth and stability, but where global conflicts of interest still exist, leading countries to continue the current trend of grouping in regional blocks (EU, Mercosur, ASEAN, etc.). In Brazil, the chosen scenario, curiously named “Surfing Low Waves”, assumes that key problems have been partially solved, with a significant reduction in inequality, competitive gains in specific sectors, and medium-high economic productivity.
Based on these global and national scenarios, the PNE 2030 estimates a total energy requirement of 402.8 Mtoe in Brazil in 2030, with electricity making up 21,18% of the total demand, at 85.3 Mtoe (Figure 1). This will require the country to increase in over 100% of its electricity supply (39.2 Mtoe in 2012) in ~15 years.
From a strategic and economic perspective, the Brazilian government argues that - regardless of the environmental and social risks - it would not be rational to ignore the potential of hydropower as an energy source in the future strategic development of the country. Nevertheless, the government also acknowledges the challenges that Brazil will face in maintaining what has been traditionally recognized by the international community as a clean energy matrix, with renewables making up for approximately 40% of the total supply, and hydropower - classified internationally as a clean energy source - answering for nearly 80% of electricity generation (Empresa de Pesquisa Energetica 2013). This is particularly relevant as 70% of potential hydropower sources are located mainly in highly sensitive biomes (Amazon and Cerrado) (Empresa de Pesquisa Energetica 2007), which should spark strong opposition and criticism from civil society, NGOs and international regulatory organizations. The Amazon basin, where many of Brazil’s protected environmental areas and indigenous communities are located – and where Belo Monte is being built – has a high proven potential for hydropower generation, of which less than 1% is currently utilized (Figure 2).
The Belo Monte Dam
Project Background
Initial studies to map hydroelectric potential of the Xingu river started in 1972, led by US engineer John Dennis Cadman. Cadman was hired a few years later by Eletronorte, the regional utility in charge of energy supply for northern Brazil (Soares 2013). In the 40 years that followed, the Belo Monte dam would become the largest infrastructure project in Brazil (third largest hydroelectric dam in the world in 2015) with budget estimates skyrocketing from US$ 3.1 billion in 2008 to over US$ 12.3 billion in 2014 (Schmidt 2014) and plot twists that would put to shame the best Brazilian soap operas: Indians pointing machetes at government officials’ faces, international celebrities campaigning against the project in global media, federal justices voting against constitutional law, and top executives of public environmental institutions resigning over political backstabbing. Here are some of the highlights in the history of Belo Monte (Socioambiental.org 2010):
From Machetes to the Concession Contract (1989 - 2010)
In 1989, during a presentation of the project at the 1st Meeting of the Indigenous Peoples of Xingu (attended by Sting and Raoni, who would start a global campaign against the dam), a member of a Kayapo indigenous tribe gets up from the audience and touches the face of the President of Eletronorte with her machete (Figure 3). The image was published on newspapers around the world and resulted in the World Bank canceling funding for the dam.
In 1994, a new version of the project reduced the size of the reservoir from 1225 Km2 to 400 Km2, with the goal of pleasing environmentalists. The project moved on. Eight years later, in 2002, a Supreme Court ruling suspended the environmental licensing process for the dam, claiming that article 231 of the Brazilian constitution “nullifies any act involving occupation, control or ownership of land inhabited by indigenous peoples, as well as the exploration of natural resources from soil, rivers, and lakes located in such land”.
In 2005 the Federal government authorized by decree the implementation of the Belo Monte Dam. Local communities were not heard. In the same year, Professor Oswaldo Sevá from the University of Campinas publishes research showing that Belo Monte would guarantee 1.356 Mw throughout the year, with peaks of 5.000 Mw during 3 months – a fraction of what the government had estimated.
One year later, in 2006, The following year, the Federal Court of Justice went back on its own decision and authorized environmental licensing for the project, setting a dangerous precedent by accepting that Congress can approve infrastructure projects in indigenous lands without consulting local communities, as determined by the Constitution.
On November 10, 2009, the Federal Court of Justice once again declared that environmental licensing for Belo Monte would be suspended until local indigenous communities were heard, which still hadn’t happened. The next day, the Court went back on its decision for a second time, and the project proceeded to IBAMA for environmental approval.
In February 2010, the Ministry of the Environment gave final approval to Belo Monte without any consensus on environmental or social impacts. Two months later, the government held an auction to grant concession rights to the Belo Monte dam. The Norte Energia consortium won the concession. In August of the same year, the concession contract was signed.
Concession Granted, Problems Continue (2010 – 2012)
In 2011, the president of IBAMA (Brazilian Institute of Environment and Renewable Natural Resources) resigned over political pressure to grant a full installation license for the Belo Monte Complex (Hurwitz 2011). A few months later, IBAMA granted full implementation license for Belo Monte. Construction work for the dam started on June 23, 2011 (Blog da Usina Hidrelétrica Belo Monte 2011). In the same year, the Inter-American Commission on Human Rights requests the Brazilian government to immediately suspend the Belo Monte project (International Rivers 2011). In 2012, two years after the concession for the dam was granted, Munich Re, German reinsurer responsible for covering 25% of Belo Monte loan guarantees, is dropped from Global Challenges Index due to its involvement in the project (Hurwitz 2012). In a matter of months, the Regional Federal Court in Brasilia issued a ruling suspending the construction of Belo Monte one more time. A Supreme Court Judge overturned the suspension of construction and the project moved on.
Looking into the background of the Belo Monte dam, one can clearly see a significant lack of coherence in Brazilian legislation regarding infrastructure projects, as well as the negative effects of pressure by the Executive over Congress and environmental agencies. These, along with a lack of transparency and a disregard for public participation, can seriously affect the legitimacy of national institutions. Considering the challenges that Brazil will face in policy-making related to the development of its energy supply in the near future, the risks of erroneous decisions, social unrest, and environmental damage to sensitive biomes become very tangible.
Efficiency and Greenhouse Gas Emissions
Belo Monte has generated strong ongoing criticism and controversy in multiple aspects for over 40 years. From an efficiency perspective, the key problem is the “Consensual Hydrogram” - the minimum downstream release necessary to meet living conditions for the indigenous communities and riverbank families that live on the “Big Bend”, a 100-km stretch of the Xingu river which will be directly affected by the dam (Antunes 2010). The Consensual Hydrogram is estimated to be 1000 m3/s, and the Institute argues that in dry years, during the low flow months (August-November), there is a very high risk of the dam not being able to provide this minimum downstream release. During these periods - which could last up to eight months -, the energy generated by Belo Monte would be a fraction of the total capacity of 11.000 Mw. This is aggravated by the fact that dry years in the Xingu basin are becoming more and more severe due to deforestation and climate change.
Usually regarded as a clean energy source, hydropower generated by dams in tropical regions has been the subject of increased research. Recent studies show that what seemed to be a “safe” source has actually more complex implications in the emission of greenhouse gases - particularly methane, which has an effect 21 times stronger than CO2 in global warming. When large reservoirs are initially flooded in tropical regions, the original vegetation rots and large amounts of carbon are released. After this initial period, plant matter settling on the bottom of the reservoir decomposes without oxygen, building up dissolved methane, which is released into the atmosphere when water passes through the turbines. Water depth varies with seasonal change, and during the dry periods, the vegetation builds upon the banks of the reservoir. When the water level rises again, this plant matter flows to the bottom of the reservoir and generates more greenhouse gases in a continuous cycle (Graham-Rowe 2005).
According to Fearnside (2009), the Belo Monte dam by itself has a small reservoir (440km2), and large installed capacity (11,181.3 MW), but the Babaquara dam - originally planned to be constructed upstream on the Xingu river to regulate the water flow and increase power generation at Belo Monte - would flood an area of 6140 km2. Water levels at Babaquara would rise and fall 23m every year, exposing an area of 3580 km2 during the low months, which would be rapidly covered by vegetation. The decomposition of this vegetation would mean a permanent source of methane production. The license granted for the construction of Belo Monte allows only one dam complex to be built on the Xingu basin, but considering the history of legal institutions bending to political pressure in Brazil, one could easily foresee other licenses being granted in the future.
“The single-dam scenario portrayed in the feasibility study for Belo Monte (…) and in both environmental assessment reports (…) seems to present a bureaucratic fiction created with the goal of obtaining environmental licensing for Belo Monte.” (Fearnside 2006, cited in Fearnside 2009).
If both Belo Monte and Babaquara dams are built, Fearnside estimates that it would take 41 years of continuous operation at optimum capacity for the Belo Monte and Babaquara dams to “break-even” and reach environmental sustainability if compared to a fossil fuel alternative.
It is estimated that ~20% of Brazil’s greenhouse gas emissions originate from hydroelectric dams, which makes these energy infrastructure projects highly relevant in what concerns the country’s commitment to reducing national emissions and contributing towards controlling climate change. There seems to be some level of disagreement between different studies regarding the results of the most reliable method (Rosa et al, 2004). Nevertheless, scientists seem to agree that hydropower is not such a clean energy source as it is considered to be by the international community and, depending on the case and specific context, it might actually be less sustainable than fossil fuels. This demonstrates the need for governments to dedicate adequate resources to a thorough environmental impact assessment of hydropower projects, particularly in tropical regions.
Conclusion
Taking into account the criticism and controversy generated by the Belo Monte project over the last forty years, and considering the fact that more than 60% of the unexplored potential for hydropower resources in Brazil is located in the Amazon, one can easily foresee further problems in future energy infrastructure projects. It seems clear that Brazil will have to make reasonably fast decisions and large investments in order to guarantee energy supply in the near future, and at first glance, it is only logical for the country to make use of its large hydric resources. As an internationally accepted “clean” energy source - for the time being -, hydropower could guarantee a significant part of Brazil’s growing energy needs.
However, without significant development of the national legal framework, increased transparency of political institutions, strengthening of civil society participation in policy-making, and enhanced capacity in environmental science and planning, the country risks making decisions which could compromise its own future, as well as its standing in the international community concerning socio-environmental equality and climate mitigation - two of the main issues in the global agenda for the coming decades.
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