NotiEn - A Newsletter on Energy Policy Issues in Latin America
June 17, 2010
Vol 1, Issue 5

Hydroelectric & Electric Power in Latin America...

A NOTE FROM THE EDITOR

Latin America depends in a very significant way on rivers and dams to supply the lion's share of the region's electrical power needs. According to the International Energy Annual, about 70% of the electrical power produced in Central and South America comes from hydroelectric facilities. Brazil, Colombia, Paraguay, and Venezuela, are the among the world's top 15 producers of hydroelectric energy. And Brazil ranks third, surpassed only by China and Canada.

 

While the hydroelectric dams have supplied the power needs of Latin Americans for decades, the construction of the large projects came at the expense of the environment and local rural populations, including indigenous communities.

 

Large-scale hydroelectric dams, praised for decades as a clean, reliable source of energy, have gone a long way toward helping meet the electricity needs of a large segment of the population in the region. But these facilities have come under increasing scrutiny in recent years by environmental groups that contend that the dams alter both upstream ecosystems, by flooding river basins, and downstream environments, by cutting the natural flow of water. Big dams often have a steep social cost as well, as they displace rural populations, including local indigenous communities.

 

Still, the push continues in the region for more hydroelectric dams, creating new controversies in countries like Brazil, Chile, and even Nicaragua. Read more...  


Carlos Navarro - Editor

 

Central American Countries Plan a Regionally Integrated System of Electricity Generation and Distribution - August 29, 1996 
In mid-August, the heads of Central America's electricity institutes met in Managua to review progress on plans to integrate the region's electric generation and distribution systems into one
massive electricity grid. The project, which aims to provide all the Central American countries with a constant flow of electricity derived from cheap and sustainable energy sources, will be
completed by the year 2001 at a cost of about US$500 million.

The six Central American governments--including Panama but excluding Belize--began drawing up plans to integrate their electricity systems after regional dependence on petroleum generated electricity surged to unprecedented levels during the first half of the 1990s. Read more...

ENRON Bankruptcy Casts Shadow over Efforts of Mexican President to Further Privatize Electric-Power Sector - January 23, 2002  
The bankruptcy of US energy company Enron has cast a shadow over efforts by President Vicente Fox's administration to partially privatize Mexico's two main electrical-power utilities, the Comision Federal de Electricidad (CFE) and Compania Luz y Fuerza del Centro (LFC). Enron filed for bankruptcy protection in early December and, as a result, has announced plans to abandon dozens of unfinished projects throughout Latin America.

In Mexico, the company had won a contract under the independent power-producer scheme (Produccion Externa de Energia, PEE) to invest US$400 million to build a 284-megawatt
power plant in Nuevo Leon state to supply energy to several Monterrey industrial giants like glass manufacturer Vitro, cement maker Apasco, and steel company IMSA. Read more...
In This Issue...
A Note From the Editor
Central American Countries Plan a Regionally Integrated System of Electricity Generation and Distribution
ENRON Bankruptcy Casts Shadow over Efforts of Mexican President to Further Privatize Electric-Power
Argentine Energy Crisis Reveals Region's Weak Power Network
Paraguay: Heavily Indebted and under Investigation, Yacyreta Dam Struggles to Reach Capacity
Brazil: Project to Redirect Rio Sao Francisco gets License Despite Environmental Objections
Paraguay Seeks Greater Flexibility from Brazil on Itaipu Dam Contract, Brazil Refuses
Hydroelectric Projects in Brazilian Amazon Spark Concern over Cross-Border Environmental Impacts
Patagonia Power Struggle: Chile Divided on Plan to Dam Aysen's Baker and Pascua Rivers
Paraguay: Itaipu Dispute Could go to International Arbitration
Nicaragua: Energy-Hungry Country Opts for Large-Scale Hydro Dam
Brazil: President Luiz Inácio Lula da Silva Goes to Bat for Belo Monte Dam Project
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Argentine Energy Crisis Reveals Region's Weak Power Network - April 30, 2004   
An energy crisis in Argentina is having a region-wide impact, exposing the risks of interdependent power delivery systems in the southern cone region of South America. As Argentina and Chile face the possibility of widespread blackouts, analysts fear that the power outages and increases in energy costs could slow Argentina's economic recovery and tie up other regional economies.

Since autumn of 2003, Argentine electric companies have been warning of power shortages, complaining that they have had inadequate capital for development since a price freeze introduced in January 2002. The price freeze came in response to Argentina's debt default and the devaluation of the peso, which had previously been pegged to the US dollar. Argentina's rates are now among the cheapest in Latin America and public service providers say they cannot cover debt payments or keep up necessary investments. Read more...

Paraguay: Heavily Indebted and under Investigation, Yacyreta Dam Struggles to Reach Capacity
April 23, 2004   
Debt- and corruption-ridden, the Yacyreta hydroelectric dam project between Paraguay and Argentina is running under capacity. To bring its water to the level where it would run at originally projected levels of production, however, would cause social and ecological destruction, say environmentalists. In the meantime, Paraguayan President Nicanor Duarte Frutos is seeking the investigation and prosecution of former heads of the project and trying to work with Argentine President Nestor Kirchner to get "coherence" regarding how the two countries will handle the dam's massive debts.

The two governments have resolved to complete the binational dam on the Parana River by 2007, operating at 60% of originally planned capacity. But environmentalists fear that the expansion will increase the environmental and social damages the megaproject has already caused. Read more...

Brazil: Project to Redirect Rio Sao Francisco gets License Despite Environmental Objections
May 11, 2007   

The Brazilian government has obtained a license for a controversial project to redirect the flow of the Rio Sao Francisco in the northeastern part of the country. Environmental and religious activists have protested the project, worth billions of Brazilian reais, saying it could potentially kill the river, which runs principally through the states of Minas Gerais and Bahia to the Atlantic. The Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renovaveis (IBAMA) conceded a license to the government for the river-transposition project on March 23, although the license will not be the only hurdle the government must jump to begin the project. 


The license was for the first phase of the transposition project, which will entail works projects in the municipalities of Pernambuco, Ceara, Paraiba, and Rio Grande do Norte. The licensing is open to companies interested in executing civic works, installations, assembly, and tests and commissioning of mechanical and electrical equipment. Read more...

Paraguay Seeks Greater Flexibility from Brazil on Itaipu Dam Contract, Brazil Refuses - June 8, 2007   
Paraguay's President Nicanor Duarte pressed Brazilian President Luiz Inacio Lula da Silva to renegotiate the terms that dictate how power from a shared dam is handled. Paraguayan officials and media want the tiny country to earn more from the Itaipu dam, the world's largest functioning hydroelectric generator, than it currently gains under terms set by a 1973 agreement. Duarte's calls met little response from Lula during the Brazilian president's first official visit to Paraguay since coming to office in 2003. Duarte's "weak" approach to Lula and failure to gain any concessions earned him the scorn of Paraguayan media and opposition leaders.

Dams like Itaipu and Yacyreta, shared with Argentina, give Paraguay most of its electricity, but the treaties setting up the terms of how the power plants would profit from the electricity were set up during the dictatorship of Gen. Alfredo Stroessner (1954-1989). Critics of the treaties say they are less than favorable to broad Paraguayan interests, having been set up to serve narrow elites allied with the dictatorships of Paraguay and its neighbors. Read more...

Hydroelectric Projects in Brazilian Amazon Spark Concern over Cross-Border Environmental Impacts
May 23, 2008   
Bolivian environmentalists have strong concerns over dams Brazil is planning to build along the Madeira River. "The consequences of the dams on the Madeira River will add to the process that has been destroying the Amazon for decades," said Bolivian public health specialist Pablo Villegas, researcher in the Foro Boliviano Sobre Medio Ambiente y Desarrollo (FOBOMADE). The impact caused by the Madeira River Hydroelectric Complex, according to environmentalists' predictions, will be the greatest ever caused by an infrastructure project, giving all the more reason for alarm.

Madeira is the one of the most plentiful rivers in the Amazon basin, second only to the Amazon River, of which is a tributary. It starts where the Beni and Mamore Rivers unite in Bolivia and flows toward the north, following the border between Bolivia and Brazil, entering Brazilian territory through the Rondonia and Amazonas states. Read more...

Patagonia Power Struggle: Chile Divided on Plan to Dam Aysen's Baker and Pascua Rivers
October 17, 2008   
A multibillion dollar plan by Chile's two leading electricity providers to build five massive dams in Patagonia has sparked a fierce national debate, pitting the country's leading environmentalists and their congressional allies against a powerful energy lobby that enjoys clear backing from top government officials.

At stake in this ongoing discourse is the fate of two potent rivers: the glacier-fed Baker and Pascua. Located more than 1,600 km south of Santiago in Chile's sparsely populated Region XI, an area also known as Aysen, the pristine waterways were until recently virtually unheard of by the general public. They had not, however, escaped the attention of Endesa, a former stateowned company that is now a huge multinational controlled by Spanish and Italian capital. By its own admission, Endesa has been eyeing the Baker and Pascua rivers for more than 40 years, sizing them up as huge potential energy sources. Read more...

Paraguay: Itaipu Dispute Could go to International Arbitration - June 19, 2009   

After four rounds of negotiations aimed at reaching an agreement on economic and political differences regarding their joint operation of the world's largest hydroelectric dam, the governments of Paraguay and Brazil have not found common ground, and the situation could lead to the least desirable of all options--submitting the matter to international arbitration.


"We are looking at a huge paradox. Before Presidents Luiz Inacio Lula da Silva [Brazil] and Fernando Lugo [Paraguay] were in office, both agreed that the 1973 treaty initiating the huge Itaipu project needed revising because it established unequal treatment that was obviously damaging to Paraguay. Now, however, while Lugo steadfastly maintains the demands of his country, with its weak economy and fragile democracy, Lula heads a regional giant and vindicates the one-sided treaty signed without the peoples' knowledge by two of the region's bloodiest dictatorships," political analyst Jose Nicolas Morinigo, a professor at the Universidad Catolica de Asuncion who advises the government on sociopolitical matters, told Radio Nederland. Read more... 


Nicaragua: Energy-Hungry Country Opts for Large-Scale Hydro Dam - March 18, 2010    
In an effort to diversify its heavily fossil-fuel-dependent electricity sector and at the same time meet rising demand, Nicaragua is putting its eggs in the hydroelectricity basket, opting for conventional large-scale dams despite growing international awareness about their social and environmental drawbacks.

Currently about 80% of Nicaragua's electricity comes from petroleum-burning generating plants, making the impoverished, non-oil-producing Central America nation particularly vulnerable to external market factors. Sky-high oil prices put a serious crimp in electricity production in 2006, when Nicaragua suffered periodic blackouts. Nowadays, the problem has more to do with supply, as delays in shipments of subsidized oil from Venezuela are threatening a new energy crisis. "Because of all the problems we're having, we can expect electricity generation to be more expensive in the coming months," energy expert Narciso Mayorga explained during a seminar held March 12 by the Instituto Nicaraguense de Defensa de los Consumidores (Indec). "Remember, our matrix depends on oil for 80%. To reverse this situation, we need major investments for the promotion of renewable-energy projects." Read more...

Brazil: President Luiz Inácio Lula da Silva Goes to Bat for Belo Monte Dam Project - May 28, 2010    
Unfazed by entrenched environmental opposition, a threat of war by local indigenous groups, and celebrity lobbying by a handful of Hollywood stars, Brazilian President Luiz Inácio Lula da Silva is putting the pedal to the metal on a controversial hydroelectric project slated for the country's Amazon jungle region.

Planned for the Xingu River, a major tributary of the Amazon River, the Belo Monte dam project promises to add a staggering 11,200 megawatts of electricity to Brazil's grid. Once completed, it would be the world's third-largest hydroelectric complex after the Three Gorges Dam in China (21,500 MW) and the 14,000-MW Itaipú dam, which Brazil shares with neighboring Paraguay.

Brazil already boasts South America's largest electricity grid, with a total generating capacity of approximately 100,000 MW--more than twice the electricity available in nearby Argentina, Paraguay, Uruguay, and Chile combined (see NotiSur, 2009-11-20). Read more...
LA-ENERGAIA
Energy Policy, Regulation and Dialogue in Latin America

 

NotiEn is an original newsletter with breaking news that analyzes and digests relevant and contemporary information in energy, alternative energy and energy policies in Latin America. A complimentary service provided by the University of New Mexico as part of LA-ENERGAIA Project funded by the US TICFIA Program