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The electricity sector begins a new cycle in 2010
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The hydropower plants whose construction is currently underway, designed or being studied amount to a potential reaching approximately 35,000 megawatts (MW), which is equivalent to two and a half Itaipus, announced José Antônio Muniz Lopes, Eletrobrás president, on Thursday at this year’s first Management Development Program lecture.  

The hydropower plants whose construction is currently underway, designed or being studied amount to a potential reaching approximately 35,000 megawatts (MW), which is equivalent to two and a half Itaipus, announced José Antônio Muniz Lopes, Eletrobrás president, on Thursday at this year’s first Management Development Program lecture.


The lecture took place at the Training Auditorium and was broadcast via videoconference to Curitiba and Brasília. It addressed two topics: “The expansion projects for the Brazilian generating industry and the new profile of Eletrobrás”.


The new cycle


According to the Eletrobrás president, the Brazilian electricity sector will be beginning a new cycle in 2010, as the first hydropower plants included in the expansion plan are completed. Today the electricity sector has 103,033 MW installed, of which 75.2% correspond to hydropower plants, 22.3% to thermal, 2% to nuclear and 0.4% to wind power plants. The Eletrobrás System has 39,402 MW of that total, including half of Itaipu. The Eletrobrás System also owns 56% of the total conveyance lines in Brazil, a number that is expected to rise soon.


Necessary "grime"


Before 2001, when the electricity sector collapsed, hydropower plants accounted for 95% of the electricity generated in the country. After that, according to the Eletrobrás president, increasing the share of thermal power plants was the only alternative to prevent Brazil from shutting down. “Our critics say we have soiled the Brazilian power grid, and we have to agree that has happened. But why? Because we had no other choice. It is better to have power generated from fuel oil than none at all”, said José Antônio Muniz Lopes.


Electric and nuclear


In the electricity sector’s new cycle, hydropower plants will once again be the priority. Plants whose construction is underway or being planned or studied total an installed capacity reaching nearly 35,000 MW. Nevertheless, the expansion plan also foresees an increased participation of nuclear power plants: in addition to the 1,350 MW generated by Angra 3, whose construction is expected to be complete late in 2014, the government is studying the construction of two nuclear power plants in the Brazilian northeast, containing six stations each, and another two similar plants in the southeast. The capacity of each plant will be equivalent to half of Itaipu. Therefore, the four plants will have the same installed capacity of two power plants like Itaipu. However, if all goes according to plan, construction will only start in the 2020’s.


In detail


The Eletrobrás president provided details on each hydropower plant under construction, being designed or studied in the country. A brief summary is given below.


Construction underway


Batalha: 52 MW, completion estimated for May 2011
Simplício: 333.7 MW, completion in September 2010
Chapecó: 855 MW, August 2010
Serra do Facão: 210 MW, October 2010
Retiro Baixo: 82 MW, January 2010
Baguari: 140 MW, September 2009 (the only one this year).


Large plants


Santo Antônio: 3,150 MW, estimated for 2011
Jirau: “One of the main constructions in the Growth Acceleration Program (PAC, in Portuguese)”, highlighted José Antônio Muniz Lopes – 3,300 MW, whose construction has not been scheduled to start because the project is undergoing changes
Belo Monte: 11,300 MW, no estimate for construction to start (read more details below)
Maribá: 2,160 MW. The concession is to be granted next year.


Future works


Serra Quebrada – 1,328 MW, Santa Isabel – 1,080 MW and the five power plants in the Tapajós Complex, which will total 10,692 MW. Incidentally, the video showing these plants’ project presents one of the solutions found to lessen environmental problems – a channel for fish to swim past the dam and be able to procreate upstream from the power plant. Images of Itaipu’s Spawning Channel were used to show what this channel will be like in the Tapajós Complex.


Belo Monte


The Eletrobrás president dedicated a good portion of his lecture to talk about the Belo Monte power plant, which he called “the plant of the hour”, given that the concession auction is scheduled for the second half of this year.


The 1980 Belo Monte project has been entirely altered to decrease its environmental impact. The reservoir, which would have covered 1,200 square kilometers, will now cover 480 square kilometers. By governmental decision, the power plant will be the only one on the Xingu River. Furthermore, it will be run-of-the-river like Itaipu, that is, it will take advantage of the river water without requiring a large reserve. Even so, its annual average production is estimated at over 44 million megawatts-hour (MW), nearly half of what Itaipu generates.


Muniz Lopes explained that the river enjoys great flow in the first half of the year, exactly when power plants in the rest of the country are making use of their reserves. As Belo Monte joins the system, it will allow those hydropower plants to keep their reservoirs at a volume that enables them to face the driest period. Additionally, Belo Monte will be essential if the plan integrating the Brazilian and Venezuelan electricity systems comes together, once that the hydrological regime in that country is the exact opposite to Xingu’s.


The Eletrobrás president said that Belo Monte will be "the cheapest power plant in the world" in proportion to its capacity. In its first project 25 years ago it was estimated at US$ 25 billion, but that amount will be revised and cut back on.


President Lula


José Antônio Muniz Lopes said that President Luiz Inácio Lula da Silva is keeping track of all the phases included in the electricity sector’s expansion plan. “For the first time I have seen a President of the Republic get those involved in the electricity sector’s expansion plan together to discuss construction by construction”, said the Eletrobrás president. The latest meeting was held this week and, besides Eletrobrás, Funai, Ibama and the ministries of Finance and Planning also attended, among other agencies.


“The (expansion) program is born with a structure that I had never found before in my 46 years in the electricity sector”, closed Muniz Lopes.


The director



Before his lecture, the Eletrobrás president was briefly introduced by the Brazilian general-director, Jorge Samek.


He said that José Antônio Muniz Lopes has caused a veritable “revolution” at Eletrobrás. He added that Itaipu is “forever grateful” to Eletrobrás, which “has gone after funds, gotten into debt, sent technicians and given absolute shelter” to the project, from the beginning. In closing, he called Muniz Lopes “Dr. Energy”.


As the Eletrobrás president expressed his gratitude he said he sees his nomination for the Itaipu Board of Directors – he is the newest director – “a commendation”. Then he talked about the first topic of his lecture: “The new profile of Eletrobrás”.


The company


Eletrobrás currently operates towards becoming “the Petrobras of the electricity sector”, according to the wishes of President Lula. To that end, since last year the holding has been following a plan containing “41 transformation actions” that will in the end turn it into a mega company, as put by Muniz Lopes. One of the actions is the electricity system’s first career and compensation plan, applied to all but Itaipu, and which will create a “single badge” for all employees of the holding and its subsidiaries.


At the same time, Eletrobrás is relying on a bill being discussed by the Congress and which, when passed, will create its own bidding system, no longer tied to Law 866, while another decree has allowed the company to enter into an association abroad to build hydropower plants and conveyance lines, which it has been doing in Peru on a large scale.


After bad results in 2007 – with losses at R$ 1.2 billion -, in 2008 Eletrobrás leapt to profits reaching R$ 6 billion, the product of the company’s shift in operations, which now adopts the model of ‘cooperation for competition, high economic efficiency and flexible financial engineering”, as detailed by Muniz Lopes. In other words, the company starts to be ‘integrated, competitive and profitable.