Planning for the development of Santo Antonio began in 2001 through a public-private partnership between Eletrobras Furnas and Odebrecht Energia. Photo courtesy of Luiz Gabriel Todt De Azevedo
Sources of Renewable Energy
By Luiz Gabriel T. Azevedo
The vast Amazon rainforest spans over eight South American countries and covers an area of approximately 6.7 million square kilometers. Thirty million people live in the Amazon, coexisting with about 10 percent of the known wildlife species. The immense network of rivers, lakes and wetlands overlapping this area forms the largest watershed on earth, accounting for 15 percent to 16 percent of the total river discharge into the oceans.
Rivers in the Amazon are essential to the livelihood of local communities, representing an important natural resource base for the economic and social development of the countries they cross. High gradients between the Andes mountains and the Amazon plains, and the gigantic water flow through the region, signify an enormous energy potential.
The Amazon is the next and perhaps one of the last frontiers for hydropower expansion. Hydroelectric development in South America over the next twenty years will be concentrated in the basin. In Brazil alone, the largest country and economy in the region, hydropower corresponds to 68 percent (88.2 gigawatts-GW) of the total 130.8 GW that are to be installed between 2005 and 2030, considering all other sources of energy (such as gas, coal, nuclear, wind, biomass and solar). This growth in hydropower generation will take place primarily through the implementation of new projects in the Amazon.
Only a fraction of the Amazon hydroelectric potential has been tapped for power production to date. However, the first crop of projects implemented during the 1970s and 80s did not fully succeed in balancing energy generation with other objectives. New projects, in contrast, are more holistic in nature, focusing on multiple objectives as a consequence of lessons learned from past experience. This process is also aided by increased scientific and technical knowledge, the implementation of strict legal and regulatory frameworks, better social controls, and the innovative thinking of proactive and responsible companies involved with a new generation of hydropower investments.
Companies realize that in a world increasingly focused on sustainable development, it is essential to anticipate how a hydroelectric project—or set of projects—will affect the environment and, in turn, how the project is influenced by that environment. In the Amazon this implies developing solutions that integrate power generation and its vast stream of positive externalities with effective environmental gains, the preservation of a unique natural heritage, and long-term benefits to local communities, including traditional and indigenous populations.
In traditional hydropower models, different phases of the project cycle—from identification and feasibility through design, construction, commissioning and operation—were often fragmented into separate short-term implementation stages. New hydropower developments favor competitive models that seek integrated solutions, providing companies with long-term concessions to build projects and to sell their energy as they move towards more sustainable hydropower. The long-term perspective of a company that will design, build, and then run a project for a number of years involves the ability to anticipate challenges, to manage risks, and to obtain a “social license” to operate. Therefore the modern dam's greener hue is not only a consequence of increased environmental awareness, but it also reflects the need to avoid or mitigate the unpredictable extra costs of environmental suits, opposition from indigenous populations, and political backlashes.
Companies that have been successful in overcoming the challenges to sustainably expand renewable energy generation in the Amazon have looked critically into the past and realized that their “social license” to operate requires: (a) a strategic vision to advance the development of a comprehensive sustainability perspective; (b) technical excellence to evaluate a range of feasible engineering layouts and alternatives; (c) comprehensive in-depth knowledge of the area (e.g. environment, social, etc.) where a project is planned; (d) a broad basin-wide and/or regional view to anticipate project impacts and risks—in particular short-and long-term indirect impacts and cumulative impacts; (e) effective communication with a wide range of stakeholders, from local communities to global players such as financiers and non-governmental organizations; (f) strong monitoring and supervision controls to effectively check implementation against plans; (g) efficient management systems able to adapt to unforeseen events and rapidly changing conditions; and (h) transparent governance systems.
A contemporary generation of hydropower developments can be seen in a recent example. The Santo Antônio Hydroelectric Project was the first large plant to be built in the Brazilian Amazon in almost three decades. Once completed, it will be the third largest in the country, with an installed capacity of 3,150 MW—enough to supply 11 million households or approximately 40 million people. Plans are being finalized to further increase its installed capacity by 13 percent (429.6 MW) at marginal social and environmental cost, through the incorporation of six additional turbines. This will optimize its energy output and generate additional benefits to the Brazilian grid. In spite of its location in the midst of the Amazon rainforest, it is considered a pioneer in breaking paradigms and showing how hydropower can be generated sustainably.
Planning for the development of Santo Antônio began in 2001 through a public-private partnership between Eletrobras-Furnas and Odebrecht Energia, which received government authorization to conduct the feasibility studies. Following approval by the Brazilian government, the project was put up for auction in December 2007, and the 35-year concession was awarded to Santo Antônio Energia S.A., the company that offered the lowest tariff to generate energy (R$ per kilowatt—KW). The concession contract was formalized about seven years after initiation of the planning stage. In March of 2012 the first of Santo Antônio’s 44 turbines initiated power generation, around three and a half years from the beginning of construction. The longer planning stage, as compared to a shorter implementation phase, represents a major change in the historical pattern and is a true success story. The project will be completed by early 2016.
The implementation of Santo Antônio has been marked by extensive environmental work to ensure that negative externalities are fully mitigated or compensated. This has included, for example, state of the art technology to ensure that fish can continue to migrate upstream and that fish eggs and juveniles can pass unharmed through the dam as they move downstream. The dam’s layout was adapted to ensure the maintenance of adequate sediment flows, and the area to be preserved is significantly larger than that occupied by its reservoir.
One of the strategic early decisions was the adoption of bulb turbine technology suited to high water flows. The use of this technology has reduced the size of the planned reservoir from 1,500Km2 to approximately 546 Km2, an area roughly equal to the river´s natural flood plain. This has led to a highly efficient project with the lowest reservoir-to-power ratio amongst dams in the Amazon (0.11 Km2/MW).
Another fundamental step towards sustainability was the early initiation of the dialogue with interest groups. Seeking participation and open discussion of the project with those affected by its implementation, Odebrecht Energia and Eletrobras-Furnas implemented a process to establish trust with local groups. This involved specific strategies directed at those affected, namely: (a) traditional populations (“ribeirinhos”) living on the banks and flood plains of the Madeira River; (b) indigenous peoples; (c) the urban population of Porto Velho, the capital city of Rondonia; and (d) municipal, state, and federal governments.
The early consultation process set the foundation for a trusting relationship, and allowed for the identification of major concerns and needs of the community, which involved but were not limited to: employment opportunities; skills training and capacity building; concerns with the potential growth of slums in Porto Velho; and the lack of adequate infrastructure in the capital city. A consequence of this dialogue was the development of initiatives that directly met the expectations of this set of stakeholders.
One of the most successful initiatives resulting from the consultation process was the “Acreditar” (believe) Program, an innovative and unprecedented capacity-building program developed and implemented by Odebrecht Energia. The lack of a skilled labor force in Porto Velho, a town of about 300,000 people located 8 km from the project site, provided the inspiration for “Acreditar.” A survey of professional skills in the area showed that the number of locals that would be able to work in the implementation of the project represented only 30 percent of the total necessary workforce (estimated at about 20,000 at peak). The majority of the manpower to work at the construction site would thus have to come from out of town or state and might trigger a spurt of population growth exacerbating the town’s social problems.
Odebrecht Energia developed “Acreditar” to turn that equation around, setting a goal of hiring 70 percent of the workforce locally. The success of the program is measured by the fact that 82 percent of the workforce employed in the construction of the project has been hired around the region. Gender inclusion has also been an aim of “Acreditar,” and in Santo Antônio women represent over 10 percent of the total workforce, a record in the heavy infrastructure industry. The stream of benefits resulting from this initiative is massive, including significant growth of employment and income generation in Porto Velho with consequent spinoff benefits to the local economy. “Acreditar” has expanded to other large infrastructure projects in Brazil and abroad (over 55,000 workers have completed the program), including two other hydropower plants currently under implementation by Odebrecht—the Teles Pires Hydroelectric Project in Teles Pires River in Brazil, and the Chaglla Hydroelectric Project in the Huallaga River in Peru. Ultimately, “Acreditar” is leaving a legacy of continued professional development and environmental awareness.
The significance of these voluntarily driven, replicable initiatives supported by innovative thinking is that they have been implemented for commercially viable projects.
A person watching the myriad of workers, cranes, trucks and concrete structures that make up the “temporary city” of 15,000 by the clay-colored mighty Madeira River would not be able to fully appreciate the range and magnitude of challenges involved with the implementation of such massive projects. Overcoming such difficulties requires, more than anything, the courage to see challenges as real opportunities.
Santo Antônio and other such projects represent a new dawn of hydropower development in the Amazon. They show how to reconcile a full range of local to global objectives through strategic long-term vision. The choice facing hydropower expansion in the region is between the set of forward looking governmental institutions, companies, NGOs, and communities working together and pushing forward successful approaches, and those who still support myopic interests and confrontational agendas. What would you choose?
Luiz Gabriel T. Azevedo is a Brazilian water resources engineer who has dedicated his career to development issues in Brazil and in many other countries. A former executive with the World Bank and the World Wildlife Fund, he is the Sustainability Director for Odebrecht Energia. He is a graduate of the Federal University of Bahia and Colorado State University.