World's No. 1 dam can't save Brazil from power crisis ( June 05, 2001 )

ITAIPU, Brazil (Reuters) - It's hard to believe Brazil is in the grips of an acute energy crisis when standing before the titanic Itaipu Dam.

Straddling the border between Brazil and Paraguay, Itaipu is the world's largest hydroelectric power plant -- a 65-story edifice that took more concrete to build than the Eurotunnel that spans the English channel.

Its 18 turbines pumped out 93.4 million megawatts of power in 2000 -- enough to keep all of Brazil lit for three months. Itaipu Lake, a man-made reservoir fed by the Parana River, is almost 5 miles long.

But, despite its massive scale, the power plant and others like it across Brazil, which provide 90 percent of the nation's needs, have been unable to keep up with the energy demands of Latin America's biggest country.

Brazil now faces the threat of California-style power blackouts, and has enacted a drastic power rationing plan that seeks to reduce electrical consumption by an average of 20 percent for the next six months.

The crisis, which the government blames on the worst drought in three decades, has turned the spotlight on Itaipu and Brazil's hydroelectric energy network.

Industry experts say government incompetence and poor planning are what led Brazil to become so precariously dependent on hydroelectric power.

And experts don't see any quick relief on the supply side. New natural gas-fired thermoelectric plants, hydro power's most viable alternative, won't be on line until at least next year.

Julio Cesar Meirelles, a deputy technical director for Itaipu's Brazilian operation, said Brazil failed to expand its electricity capacity to keep up with escalating demand.

``Our gross domestic product grew between 3 and 4 percent, but our electrical consumption jumped by 7 and 8 percent,'' he said. ``That would be unacceptable in a developed country.''

Itaipu is producing electricity at maximum capacity, meaning, for the moment, it can't be any more help.

``This crisis can't be managed on the generation side, because the power plants are working at maximum capacity,'' Meirelles said. ``It has to be managed on the demand side.''

He added that in addition to a lack of kilowatts, there are insufficient power lines to transmit power from the southern state of Parana, where Itaipu is located. Much of Itaipu's power is destined for the highly industrialized southeastern states of Brazil, home to the country's wealth and one of the areas most heavily affected by the crisis.

Itaipu has an installed capacity of 12.6 million kilowatts and hopes the addition of two new turbines will increase its output to 14 million kw. But those won't likely be on line until the second half of 2004 -- too late to help with the crisis now unfolding in Brazil.

The remaining 10 percent of Brazil's energy comes from thermoelectric, nuclear and wind-powered plants. The government is now encouraging the construction of natural gas-fired thermoelectric plants -- which are quicker to build but produce power that is more expensive than hydro energy.

However, Brazil's weak currency has made investors hesitant to commit funds to new thermoelectric plants and a program to promote investment has gotten off to a slow start. As a result, the first new plants will not be able to help out until next year.

ARTIFACT OF ANOTHER TIME

For many Brazilians Itaipu has come to symbolize an era when Brazil put ``progress'' ahead of long-term environmental planning.

Brazil and Paraguay agreed to build the dam in 1966. Construction did not actually get started until nine years later and the hydroelectric plant began producing energy in May 1984.

Currently, Paraguay, with a population of 5 million, compared with Brazil's 170 million, uses 5 percent of the power to cover 95 percent of its needs. Brazil uses the remaining 95 percent to meet 24 percent of its demand.

But experts say the project had a huge social and environment impact, and building another dam of its size would be impossible.

``Itaipu was built only because the two countries involved were under military regimes,'' said Glenn Switkes, the Latin American director for the International River Network. ``The public would make it impossible for it to happen today.''

Itaipu wiped out one of nature's wonders, the Seven Falls, a succession of seven waterfalls that were inundated by the dam's creation, he said.

Indeed, the environmental transformation of the area that came when the reservoir behind Itaipu was formed also created problems for fishermen and other local residents.

``There were 35,000 people affected by the construction of Itaipu and over 50 percent did not receive anything in return,'' said Jose Camilo, a member of a local support group for people affected by the dam.

Meirelles at Itaipu said there are still other rivers in Brazil that could be successfully turned into hydroelectric dams without too much environmental impact. But he admits Itaipu has turned into an artifact of times past.

``There are some hydroelectric projects that 20 years ago would have been easily approved,'' he said. ``Today, they stand no chance.'' ^ REUTERS@

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-- Martin Thompson (mthom1927@aol.com), June 05, 2001