Hydropower Projects with a Capacity of 50 Megawatts (Mw) and 1 Thousand Mw of Installed Capacity Materials and Products

The Energy Research Company (EPE) and a group of companies in the electricity sector work on alternatives to encourage the realization of technical and economic viability (EVTEs) and environmental feasibility studies of medium-sized hydropower projects with a capacity of 50 megawatts (MW) and 1 thousand MW of installed capacity. The idea is to create regulatory and financial incentives for the study of these projects, enabling them to be included in the Ten Year Energy Expansion Plan (PDE) and, consequently, in new auctions.

"The hydraulic potential in Brazil is very large, but we are offering, from the point of view of auction, a very small value because there are no projects and no entrepreneur wanting to take risks," said Reive Barros, president of EPE, in an event about the subject in Rio yesterday. According to him, Brazil has a potential of 45 thousand MW of medium-sized hydroelectric projects, of which 30 thousand MW in the North and 15 thousand MW in the Southeast and Center-West.

The idea, said Reive, is that R $ 1 billion will be invested by state and sector companies with BNDES financing to study about 50 such projects, an average of R $ 20 million per project. In this way, the projects studied could be included in the PDE and then be offered in auctions. If the feasibility study leader is not the winner of the auction, he will have his initial investment remunerated by whoever wins the concession of the plant.

Reive also said that 3% of the Global Reversion Reserve (RGR, charge of the electric sector) is destined to carry out these studies, but that they are contingent. The idea, he explained, is to have access to these resources to make feasible the studies of medium-sized hydroelectric plants.

Present at the event, the Minister of Mines and Energy, Moreira Franco, defended the expansion of the country's hydroelectric capacity. "If we had not gone through the most serious crisis in our history, we would be living the widest blackout in our history. This shows that the industry needs to expand. "

"As regulation is structured, there is no incentive for interested engineering and construction companies to do the EVTEs and EIA-RIMAs that will allow the [environmental] pre-licenses and the auctions," added Engie Brazil's Strategy Director. , Gil Maranhão.

According to the executive, a text of a bill prepared by companies in the sector provides for the creation of a compensation fund for indigenous populations that have their lands impacted by new hydroelectric projects. The document is ready and will be discussed with new interlocutors from the next government and Congress.

"The concession auction notice would already establish a value, in reais per megawatt-hour, regardless of who the concessionaire is, reserved for a fund to be taken by the entrepreneur, indigenous leaders and Funai. This is ready, waiting for new interlocutors in the government and opportunity to test this mechanism in a next project that will be granted, "said Maranhão.

Regarding the auction for contracting power from gas-fired power plants in the Northeast, Reive said that the bidding should take place in the first quarter of 2018, after a public consultation with the Ministry of Mines and Energy and with procedures in the National Electric Energy Agency ( Aneel).

Asked about criticism and inquiries regarding the auction, including comments from ONS director general Luiz Eduardo Barata, that more time and studies would be needed to decide on the auction, Reive said that the operator itself has studies that indicate the need to contract power for the Northeast.