The Haney GroupStudy Report Articles:The rights and wrongsof Belo Montehttp://www.economist.com/news/americas/21577073-hav...
Having spent heavily to make the world’s third-biggesthydroelectric project greener, Brazil risks getting a poorreturn on ...
THE biggest building site in Brazil is neither in theconcrete jungle of São Paulo nor in beachside Rio deJaneiro, which is...
Since then construction has twice been halted brieflyby legal challenges. Greens and Amerindians oftenstage protests. Xing...
The appeal of hydropowerWith tens of millions of its citizens moving out of poverty,Brazil can satisfy demand only if it a...
The world’s largest sugarcane crop provides bagasse, afibrous residue which burns in high-pressure boilers. Thecountry may...
Brazil already generates 80% of its electricity from hydroplants—far more than other countries. But two-thirds of itshydro...
Opponents say that dams only look cheap because theimpact on locals is downplayed and the value of otheruses of rivers—for...
But many dams were worth it (though the losers rarelyreceived fair compensation). Itaipu, built in the 1970s byBrazil’s mi...
That approach is being pioneered at Belo Monte. In the1970s the military government dreamed of a sequence offive dams and ...
Norte Energia has set aside 3.9 billion reais for mitigationand compensation payments. The constructors mustbuild fish lad...
But they say they feel threatened by it. Asked if anyhydropower project on the Xingu could be acceptable,Juma Xipaia, who ...
In 2011, in response to a complaint filed by Indian groups,the Inter-American Commission on Human Rights calledfor a halt ...
As run-of-river projects proliferate, generation willincreasingly be at the mercy of rainfall. After successivedry years, ...
Reservoirs or gas?In the longer term Brazil plans to increase reliability bybuilding more gas-powered plants, to be runper...
Some greens argue that the choice between reservoirs andgas is a false one. Reducing transmission losses andmodernising ol...
Both have seen bosses resign rather than sign up toinfrastructure projects in the Amazon. These failuresmean that the most...
Related Article:http://a.know-how.fc2.com/en/keyword/show/THG%20ref%2085230150609Related Videos:http://www.metacafe.com/vi...
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The Haney Group Study Report Articles: The rights and wrongs of Belo Monte

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http://www.economist.com/news/americas/21577073-having-spent-heavily-make-worlds-third-biggest-hydroelectric-project-greener-brazil

Having spent heavily to make the world’s third-biggest hydroelectric project greener, Brazil risks getting a poor return on its $14 billion investment
THE biggest building site in Brazil is neither in the concrete jungle of São Paulo nor in beachside Rio de Janeiro, which is being revamped to host the 2016 Olympics. It lies 3,000km (1,900 miles) north in the state of Pará, deep in the Amazon basin. Some 20,000 labourers are working around the clock at Belo Monte on the Xingu river, the biggest hydropower plant under construction anywhere. When complete, its installed capacity, or theoretical maximum output, of 11,233MW will make it the world’s third-largest, behind China’s Three Gorges and Itaipu, on the border between Brazil and Paraguay.
Everything about Belo Monte is outsized, from the budget (28.9 billion reais, or $14.4 billion), to the earthworks—a Panama Canal-worth of soil and rock is being excavated—to the controversy surrounding it. In 2008 a public hearing in Altamira, the nearest town, saw a government engineer cut with a machete. In 2010 court orders threatened to stop the auction for the project. The private-sector bidders pulled out a week before. When officials from Norte Energia, the winning consortium of state-controlled firms and pension funds, left the auction room, they were greeted by protesters—and three tonnes of pig muck.
Since then construction has twice been halted briefly by legal challenges. Greens and Amerindians often stage protests. Xingu Vivo (“Living Xingu”), an anti-Belo Monte campaign group, displays notes from supporters all over the world in its Altamira office. James Cameron, a Hollywood film-maker, has chimed in to compare Brazil’s dam-builders to the villains in “Avatar”, one of his blockbusters.
But visit the site and Belo Monte now looks both unstoppable and much less damaging to the environment than some of its foes claim. The project has made it through Brazil’s labyrinth of planning and environmental rules. Norte Energia has hired a second consortium comprising a roll-call of Brazil’s big construction companies, which expects to finish work by 2019. Protected by a temporary cofferdam holding back the river’s flow, labourers are digging a 20km canal to funnel water from the river to the site of the main power plant, where dozens of excavators are digging down through 70 metres of rock.

The appeal of hydropower
With tens of millions of its citizens moving out of poverty, Brazil can satisfy demand only if it adds around 6,000MW each year for the next decade to its installed generating capacity of 121,000MW. It has plenty of choices.

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The Haney Group Study Report Articles: The rights and wrongs of Belo Monte

  1. 1. The Haney GroupStudy Report Articles:The rights and wrongsof Belo Montehttp://www.economist.com/news/americas/21577073-having-spent-heavily-make-worlds-third-biggest-hydroelectric-project-greener-brazil
  2. 2. Having spent heavily to make the world’s third-biggesthydroelectric project greener, Brazil risks getting a poorreturn on its $14 billion investment
  3. 3. THE biggest building site in Brazil is neither in theconcrete jungle of São Paulo nor in beachside Rio deJaneiro, which is being revamped to host the 2016Olympics. It lies 3,000km (1,900 miles) north in the stateof Pará, deep in the Amazon basin. Some 20,000labourers are working around the clock at Belo Monte onthe Xingu river, the biggest hydropower plant underconstruction anywhere. When complete, its installedcapacity, or theoretical maximum output, of 11,233MW willmake it the world’s third-largest, behind China’s ThreeGorges and Itaipu, on the border between Brazil andParaguay.Everything about Belo Monte is outsized, from the budget(28.9 billion reais, or $14.4 billion), to the earthworks—aPanama Canal-worth of soil and rock is beingexcavated—to the controversy surrounding it. In 2008 a
  4. 4. Since then construction has twice been halted brieflyby legal challenges. Greens and Amerindians oftenstage protests. Xingu Vivo (“Living Xingu”), an anti-Belo Monte campaign group, displays notes fromsupporters all over the world in its Altamira office.James Cameron, a Hollywood film-maker, has chimedin to compare Brazil’s dam-builders to the villains in“Avatar”, one of his blockbusters.But visit the site and Belo Monte now looks bothunstoppable and much less damaging to theenvironment than some of its foes claim. The projecthas made it through Brazil’s labyrinth of planning andenvironmental rules. Norte Energia has hired a secondconsortium comprising a roll-call of Brazil’s bigconstruction companies, which expects to finish workby 2019. Protected by a temporary cofferdam holding
  5. 5. The appeal of hydropowerWith tens of millions of its citizens moving out of poverty,Brazil can satisfy demand only if it adds around 6,000MWeach year for the next decade to its installed generatingcapacity of 121,000MW. It has plenty of choices. Apartfrom huge deposits of offshore oil and gas, Brazil has theworld’s third-biggest hydropower potential (behind Chinaand Russia), and its potential for solar and wind energy isprobably among the three biggest, too.
  6. 6. The world’s largest sugarcane crop provides bagasse, afibrous residue which burns in high-pressure boilers. Thecountry may also have shale gas. “Brazil is very lucky: ithas many choices about how to expand its electricitysupply,” says Claudio Sales of Acende Brasil, an energy-research institute. “But they are choices, and they needto be made.”These choices will be watched closely elsewhere. In half adozen other South American countries Brazil is planningjoint dams or offering financing for hydropower projects.Countries in Africa and Asia are also looking tohydropower. Lenders such as the World Bank are onceagain keen.Brazil’s energy ministry has ranked the various sourcesof energy according to availability, cheapness,
  7. 7. Brazil already generates 80% of its electricity from hydroplants—far more than other countries. But two-thirds of itshydro potential is untapped. The snag is that most of it liesin untouched rivers in the Amazon basin. Of 48 planneddams, 30 are in the rainforest (see map). They include thealmost completed Jirau and Santo Antônio on the Madeirariver, which will add 6,600MW to installed capacity. But it is
  8. 8. Opponents say that dams only look cheap because theimpact on locals is downplayed and the value of otheruses of rivers—for fishing, transport and biodiversity—isnot counted. They acknowledge that hydropower is low-carbon, but worry that reservoirs in tropical regions canrelease large amounts of methane, a much morepowerful greenhouse gas.In the 20th century thousands of dams were built aroundthe world. Some were disasters: Brazil’s Balbina damnear Manaus, put up in the 1980s, flooded 2,400 squarekm (930 square miles) of rainforest for a piffling capacityof 250MW. Its vast, stagnant reservoir makes it a“methane factory”, says Philip Fearnside of the NationalInstitute for Amazonian Research, a government body inManaus. Proportionate to output, it emits far more
  9. 9. But many dams were worth it (though the losers rarelyreceived fair compensation). Itaipu, built in the 1970s byBrazil’s military government, destroyed some of theworld’s loveliest waterfalls, flooded 1,350 square km anddisplaced 10,000 families. But it now supplies 17% ofBrazil’s electricity and 73% of Paraguay’s. It is highlyefficient, producing more energy than the Three Gorges,despite being smaller.Of Brazil’s total untapped hydropower potential ofaround 180,000MW, about 80,000MW lies in protectedregions, mostly indigenous territories, for which thereare no development plans. The government expects touse most of the remaining 100,000MW by 2030, says MrVentura. But it will minimise the social andenvironmental costs, he insists. The new dams will use“run of river” designs, eschewing large reservoirs and
  10. 10. That approach is being pioneered at Belo Monte. In the1970s the military government dreamed of a sequence offive dams and huge reservoirs on the Xingu, which wouldhave generated 20,000MW by displacing tens of thousandsof people and flooding 18,000 square km, including Indianreserves. In all, it planned to flood 2% of the rainforest forreservoirs.With democracy restored, the government ordered arethink. The new plan for the Xingu involves just one damcomplex, at the Volta Grande (“Big Bend”), where the riverdescends 93 metres in 140km—a large drop for Amazonia.Instead of from a reservoir, most of the water to drive theturbines will come by channelling part of the river’s flowthrough a new canal, from Pimental to the main generatingstation.That added more than 2 billion reais to the project’s cost,but it avoids flooding Indian lands. Belo Monte will flood
  11. 11. Norte Energia has set aside 3.9 billion reais for mitigationand compensation payments. The constructors mustbuild fish ladders, a boat-hoist to keep the rivernavigable, homes for 8,000 families (including 700 livingin flood-prone palafitas, or wooden huts on stilts, by theriverside in Altamira), schools and health-care facilities,sewage connections and much more.For activists in Altamira and some local Indians, this isnot enough. They reject the project’s impact on the life ofthe town, where the population has swollen to 100,000,raising rents and putting pressure on health services andschools. Xingu Vivo claims the cofferdam at Pimental hasturned the river below it into stagnant pools of dead fish;it says neither the boat hoist nor the fish ladder will work.More heat than light
  12. 12. But they say they feel threatened by it. Asked if anyhydropower project on the Xingu could be acceptable,Juma Xipaia, who now lives in Altamira, replies: “No. It isimpossible. For us, the water is everything.” Nevertheless,a recent poll of 1,222 Amerindians from 20 tribes acrossthe country found that most wanted the same things asother Brazilians: better health care and education,sanitation and electricity, more income and jobs.The protesters’ legal challenge to Belo Monte is based onthe claim that they have not been properly consulted,something the government denies. The constitution saysthat before exploiting any resource on Amerindian lands,the government must consult the inhabitants. But it issilent on how this should be done. The InternationalLabour Organisation (ILO) has a similar clause in itsConvention 169 on indigenous rights, to which Brazil is asignatory.
  13. 13. In 2011, in response to a complaint filed by Indian groups,the Inter-American Commission on Human Rights calledfor a halt to construction pending further consultation.That was “precipitate and unjustified”, said thegovernment, refusing the request. The ILO has askedBrazil’s government for more information on how itintends to fulfil its legal obligations.The legal uncertainty surrounding Belo Monte is bad forboth the Indians and contractors, says Mr Sales—not tomention Brazil as a whole. A draft law detailing how toconsult indigenous people is expected by the end of theyear. But before Congress legislates, ground is likely tohave been broken on most of the new dams.Run-of-river hydropower has a much smallerenvironmental impact than big reservoirs. But it is also
  14. 14. As run-of-river projects proliferate, generation willincreasingly be at the mercy of rainfall. After successivedry years, in 2001-02 Brazilians lived throughan apagão (“big blackout”), when electricity was rationed,hitting the economy hard. To prevent a repeat, thegovernment commissioned thermal-power plants, fuelledby oil, coal and gas. They now make up a sixth of Brazil’stotal installed capacity, and supply around a tenth of itselectricity.But rising demand and the declining proportion ofreservoirs mean this is no longer enough. “The capacityto store energy—that is, water—is now small for the sizeof the system,” says Mauricio Tolmasquim of the EnergyResearch Agency, an arm of the energy ministry. “Thecountry has started to run risks.” A lack of rain meant thatBrazil’s reservoirs finished last year at just 30.5% ofcapacity, lower even than in the run-up to the apagão. This
  15. 15. Reservoirs or gas?In the longer term Brazil plans to increase reliability bybuilding more gas-powered plants, to be runpermanently. An auction of up to five promising areasfor shale gas is planned for December. “In about threeyears we’ll have a clearer idea of the role non-conventional gas can play,” says Mr Tolmasquim. “Butfrom whatever source, thermal power is going to haveto grow to at least 20% of our supply. The only otheroption would be more big reservoirs.”This would be a better option, argue some energyexperts. Antonio Dias Leite, a minister of mines andenergy during the military government, thinks that run-of-river hydropower constitutes an unjustifiable wasteof energy. “It’s strange the way people protest against
  16. 16. Some greens argue that the choice between reservoirs andgas is a false one. Reducing transmission losses andmodernising older hydropower plants would cut the needfor both, says Célio Bermann, a hydropower specialist atthe University of São Paulo. He thinks the rest of the gapcould be filled with sugarcane bagasse—20,000MW couldbe added quickly—and windpower. Conveniently, thewinds in Brazil’s north-east, where many wind farms arebeing installed, are strongest during the dry season, whenhydro output falls. Current plans involve using only a smallfraction of Brazil’s potential windpower of 143,000MW.Such disagreements are best settled by estimating costsaccurately. Brazil’s institutions are ill-suited to this.Planning and environmental laws are Byzantine: gettinglicences and fighting legal challenges routinely adds yearsto schedules and billions to budgets. The result is more
  17. 17. Both have seen bosses resign rather than sign up toinfrastructure projects in the Amazon. These failuresmean that the most important question—whether BeloMonte is really cheaper than the alternatives—has neverbeen satisfactorily answered.Recent windpower auctions, with hundreds of private-sector bidders, produced winning bids of 90-100 reaisper megawatt-hour (MWh), a price that is hard to beat.Belo Monte was given an initial budget of 16 billionreais, which had risen to 19 billion reais by the time ofthe auction. Norte Energia’s winning bid for Belo Monteoffered a price of 77.97 reais/MWh. Since then, itsbudget has risen by a third.Officials insist that the costs are Norte Energia’sproblem. That looks disingenuous. The group is almostwholly state-owned. In November, the national
  18. 18. Related Article:http://a.know-how.fc2.com/en/keyword/show/THG%20ref%2085230150609Related Videos:http://www.metacafe.com/videos_about/article_code_85230150609_ch/http://vimeo.com/65270187

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