Brazil, Peru mull new hydroelectric ventures

Aug. 11, 2009 at 11:10 AM
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RIO DE JANEIRO, Aug. 11 (UPI) -- Brazil and Peru are considering five new hydroelectric power generation plants with an investment outlay of more than $15 billion that may eventually form part of a network of 15 plants in Peru's Amazonian region.

Brazilian Energy Minister Edison Lobao told reporters the dams would mainly feed Brazil's burgeoning industry, but their output could also be exported to other countries.

He said the dams could be up and running by 2015 and generate 6,000 megawatt of electricity, of which Peru would take 20 percent and export the rest to Brazil to join the country's expanding grid.

The plans have raised environmentalist concerns that large tracts of the Peruvian Amazon region may be ruined as the builders move in.

"We need to have energy, to ensure Brazil's energy security," Lobao said. "Whatever exceeds Peruvian needs will be exported to Brazil, which may re-ship the energy to other neighboring countries."

However, Brazil sees itself as the main consumer and is preparing to invest heavily in the project. Last spring Lobao said Brazil needs to boost its generating capacity by 50 percent in 10 years to 150,000 megawatts.

However, industry analysts said the projections could change in response to the pace of industrialization and urban regeneration in the poorer areas of Brazil. The outlook for Brazil's electricity consumption could also vary amid growing interest in solar energy, the sources said.

The momentum for building the dams in the Peruvian Amazon has increased in recent months, but analysts point out it is too early for the project to leave the drawing board. President Luiz Inacio Lula da Silva has indicated he supports the formation of a joint Brazilian-Peruvian power generation company under the umbrella of the state-controlled Electrobras and its Peruvian counterpart, Electricidad del Peru.

Peru hopes the hydroelectric project will push the Amazon region into the 21st century, despite strong misgivings of conservationists and environmentalist groups. In that sense Peru's aspirations are similar to the hopes of Paraguay, which is already sharing an electricity generation project with Brazil.

The jointly operated Itaipu hydroelectric power generation complex on the Brazil-Paraguay border has brought Paraguay a windfall of $300 million a year in tariffs after Brazil agreed to give Paraguay a fair price for nearly 90 percent of the electricity generated at the plant and exported to Brazil. It was a welcome cash boost for a nation of just over 6 million people, 60 percent of whom live on or below the poverty line.

Brazil's joint power generation schemes in Paraguay and Peru are seen by analysts as part of Lula's effort to raise the country's profile in Latin America. However, the Amazon power project is seen likely to present Lula and his Peruvian counterpart President Alan Garcia with a greater challenge from the environmentalist lobbies.

The Bank Information Center campaign group said, "it is difficult to understand why the Peruvian government, that is presently confronting a serious social conflict in the Amazon region, precisely due to lack of information and discussion of their activities, once again reverts to adopting the same behavior as for the hydroelectric power plants that are projected.

"The only way to legitimize this program is divulging and discussing it seriously at national, regional and local levels and at the political, academic and popular levels."

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