Country report: Brazil

Materials World magazine
,
24 Sep 2018

The gradual setbacks to Brazil’s colossal hydropower leaves the country chasing other renewable energy sources. Khai Trung Le reports.

Brazil gets a lot right. Latin America’s largest country by landmass, population, and economy, Brazil is also Latin America’s largest renewables market. Around 45% of primary energy demand is met by the significant renewable sources the country has access to – fluctuating at around 76% of electricity, the majority of which generated from hydropower.

However, Brazil’s hydropower success has led to complacency in the development and adoption of other renewable sources. With government officials rethinking the development of several megadams in the face of repeated droughts, recession, corruption scandals, and public opposition, Brazil’s previous hesitance to diversify its energy makeup means the country is left playing catch-up in one promising area – wind power.

Dammit

Brazil has 158 hydroelectric plants, and until recently was committed to furthering that number. The most prominent developments include the government seeking to open the Tapajós basin of the Amazon River – an area roughly the size of France – to the development of 49 China- and Europe-backed dams, as well as the Belo Monte megadam constructed on the Xingu River.

These projects have been mired by environmental concerns, court battles, and resistance from indigenous residents opposed to accelerated deforestation, habitat loss and the rise of social problems.

Speaking at a 2014 Great Energy Challenge event, José Goldemberg, Professor of Physical Sciences at the University of Sao Paulo, Brazil, said, ‘The main issue in Brazil is that we had an energy mix that was very simple – two components. Oil represented 40% of all energy used in Brazil, the rest was basically hydroelectric […] This system worked well for around 50 years. It no longer works well because the best places have already been used. Now we are moving in the direction of the Amazon region, which has very specific issues.’

Dams already constructed along the Amazon have created reservoirs that have flooded stretches of rainforest and forced indigenous people to relocate. This includes the aforementioned Belo Monte, which has displaced 20,000–40,000 people from the river and partially flooded the city of Altamira permanently. Adalberto Verissimo, Senior Researcher and Co-Founder of the Amazon Institute for People and Environment, told Bloomberg, ‘Since the military days, we’ve seen the same error over and again – huge, expensive, wasteful public works that leave a devastating environmental and social impact. That model has failed.’

Financial interests in megadams were also implicated in Operation Car Wash, which escalated from a money laundering investigation in 2014 to what the Guardian referred to as one of the biggest corruption scandals in history. Corporate racketeering, including revealing how the left wing Workers’ Party received campaign donations from construction firm Odebrecht in exchange for overinflated contracts, including Belo Monte, was exposed. Verissimo continued, ‘By strengthening oversight and anti-corruption measures, Car Wash has discouraged big public works, where the opportunities for diverting money are great.’

On 19 January 2018, the Brazilian government delayed its megadam plans while it reassessed their costs and environmental impact. Fernando Coelho, Mines and Energy Minister, said, ‘The difficulty in licensing big dams, the increasingly competitive cost of other renewables energies, like wind and solar, and society’s need to discuss all major investments in the Amazon, including dams, has resulted in our putting on standby the building of big Amazon dams.’

In April 2018, Eduardo Azevedo, Secretary of Planning and Energy Development at the Ministry of Mines and Energy, said, ‘We have to protect the Amazonic region,’ but Coelho has specified that the plans were only suspended, rather than definitively abandoned.

Feng shui

Since the first Brazilian government energy auction for wind power in 2009, 13GW of capacity have been installed, spread across 518 operational wind parks, with 11GW found in the northeast. According to the Global Wind Energy Council, Brazil has the eighth largest installed capacity in the world, spread across 466 wind farms, buoyed by an average capacity factor – how much a wind farm would produce if the wind blew permanently – of above 50%, reportedly double the global average, according to Abeeólica, Brazil’s wind industry trade body.

High yield makes wind turbines an appealing alternative to hydropower – Sandro Yamamoto, Technical Director of Abeeólica, states that if identical wind projects were built in northeast Brazil and China, the Brazilian project would generate twice the amount of electricity. Other organisations share his faith in the northeast, including Atlantic Energias Renováveis, which operates 30 towers generating 60MW in João Camara, a remote area close to the state capital, Natal.

Besides Actis, the UK private equity firm that wholly owns Atlantic Energias Renováveis, Brazilian wind has also attracted investment from Canada’s Brookfield Energia Renovável, Italy’s Enel Green Power, and France’s Engie, in addition to local groups.

Prospects for wind energy in Brazil are seemingly exponential. According to a US International Trade Administration report, installed capacity is expected to reached 17,978MW by 2020, and investment will hit US$24.5bln, despite Abeeólica’s projections of flattening installed capacity between 2018–2019 as Brazil’s recession has left the government hesitant to auction further power concessions.

Brazil faces a general election on 7 October. The Workers’ Party has registered imprisoned former President Luiz Inácio Lula da Silva as its candidate, and there is no clear forerunner among the other 12 candidates. Political scientist André Pereira Cesár said, ‘Not since 1989 and the first election following re-democratisation has there been this much uncertainty.’ The future of Brazil’s megadams are also similarly intangible. But the wind continues to rise.