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09 June 2014
Brazil has always had a clean energy matrix. Of the 257.299 tonnes of oil equivalent of energy supplied throughout the country in 2012, about 45% was generated using renewable resources, with 70% (386.4 terawatt-hours) generated exclusively from hydropower plants. Compared to many developed nations – where renewables represent only about 13% of energy portfolios – Brazil has one of the largest renewable energy matrices in the world. Unfortunately, this scenario may be changing.
This change is due to the fact that almost 60% of the remaining hydropower potential needed to fuel Brazil's economic growth in the coming decades is located in areas that are extremely important for maintaining biodiversity. An example is the Amazon Basin, 20% of which is also occupied by indigenous communities whose lands are protected by the Constitution and by international treaties.
Therefore, the environmental and social effects of hydropower projects play an important role in energy planning and should be carefully considered whenever a new project is contemplated. Recently, however, the environmental agencies have begun to impose extremely strict social and environmental barriers and mitigations on the construction of new hydropower plants. One of the main controversies refers to which type of hydropower plant should be adopted in the Amazon Basin – the 'run-of-river' plant or the traditional reservoir plant.
Unlike traditional hydropower plants – which have big dams that flood extensive areas of land in order to create a huge reservoir of water that can sustain continuous energy production throughout the year – run-of-river plants have very small reservoirs and their energy production varies according to river flow throughout the seasons. Although run-of-river plants may be more suitable for conservation areas, they produce less reliable energy than traditional reservoir plants, which triggers a debate about the ideal balance between environmental conservation and energy security.
In recent years, the country has experienced considerable periods of drought, and once the run-of-river plants could no longer sustain the energy production demanded by the national electricity system, the government was forced to rely on thermal power plants, fuelled by natural gas, coal and oil in order to avoid energy rationing. This measure reignited the aforementioned debate and led some to question whether run-of-river plants are really the most sustainable and least environmentally harmful energy option.
Nevertheless, environmental agencies and non-governmental organisations continue to move away from using traditional reservoir hydropower plants in the Amazon Basin, by imposing unrealistic standards and ethical obligations that jeopardise the feasibility of new projects. On the other hand, on a day-to-day basis, the government is paradoxically forced to invest more and more in non-renewable and fossil-based sources – especially thermal power plants, which have a much more harmful effect on the environment than hydropower plants – to ensure the necessary energy security to meet the nation's demand.
While the barriers to building traditional hydropower plants remain, the country may need to reconsider its original plan to expand the energy frontier over the Amazon Basin and examine its traditional energy matrix for the future by creating new opportunities for companies and investors in nuclear and thermal energy.
For further information on this topic please contact Maria Alice Doria at Doria, Jacobina e Gondinho Advogados by telephone (+55 21 3523 9090), fax (+55 21 3523 9080) or email (email@example.com). The Doria, Jacobina e Gondinho Advogados website can be accessed at www.djga.com.br.
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Maria Alice Doria