Protests by indigenous people in Brazil’s Amazon region over hydroelectric projects are boosting costs for companies building dams including Odebrecht SA and Grupo Andrade Gutierrez SA, said Energy Minister Edison Lobao.
The developers “claim that the invasions raise the projects’ costs, and in fact it does, and can even cause the stoppage of works,” Lobao told reporters in Brasilia today.
Indigenous groups say the plants threaten the local environment. The conflict between developers and local tribes will become more pressing with about 10 new hydro projects planned in the Amazon region with more than 10,000 megawatts of capacity over the next decade, according to Erik Eduardo Rego, director of the energy consulting company Excelencia Energia.
“There will be more problems with projects in the future,” Rego said by phone today. “Nowadays, the Indians are very organized. They travel to Brasilia and have good contacts with media.”
Construction on the Belo Monte hydro plant, on the Xingu River in Para state, was shut down after about 140 protesters entered the construction site May 27, a spokeswoman for Norte Energia SA, the consortium developing the project, said today in a telephone interview.
Work resumed May 31 and the protesters were flown to Brasilia for meetings with government officials yesterday. She didn’t want to be named because of company policy. Norte Energia is led by Sao Paulo-based builder Grupo Andrade Gutierrez, and includes Camargo Correa SA, Queiroz Galvao SA, Grupo OAS, Odebrecht and five smaller partners.
Daily Costs
Work delays on a project as big as Belo Monte, which will be the world’s third-largest hydropower plant when complete, may cost as much as 3 million reais ($1.4 million) a day, Thais Prandini, executive director of the Sao Paulo-based research company Thymos Energia, said today in a telephone interview.
Delaying completion may prompt the government to build more natural gas-fired plants, she said. “The protests create delays that impede the development of Brazil’s electricity system.”
Belo Monte was initially expected to be complete in 2016, and the delays may push that back by as long as two years, Rego said.
Besides construction expenses, a bigger cost will be purchasing electricity on the spot market that developers are contractually obligated to deliver, to compensate for power that’s not generated by incomplete power projects, he said.
Norte Energia may have to pay as much as 10 million reais a day to buy power, Rego estimated. The developer may be allowed to renegotiate its contract with the buyer to avoid fines, while other companies may not be able to do so.
Brazil expects to build 38,375 megawatts of capacity through 2020 and large hydroelectric plants will account for 68 percent of that, according to the nation’s energy plan through 2020.
The Belo Monte project is expected to produce enough energy to light 18 million homes. The world’s largest hydro plants are Brazil’s Itaipu site and China’s Three Gorges facility.
