Small Hydro Power (SHP) Brazil - Institutional Set-up
Hydropower is a major energy resource in Brazil and hydro generating capacity already provides 88% of Brazil’s electrici-ty. According to the World Energy Council, between 1980 and 1999 capacity more than doubled to 11GW yet only 35% of the huge potential has been harnessed so far, especially along the many rivers in the north.
Small-scale hydro in Brazil is defined as plants with a capacity of 1 to 30 MW and an area of reservoir limited to 3km. By 1999 there were 331 small hydro plants in operation, totaling 604.6 MW, most of them dating from the 1910s to the 1950s (Guilherme et al, 1999). Since then approximately 300MW of new SHP capacity has been built, bringing the total to about 900MW. Another 1,400MW capacity were proposed for development before 2008 and these are currently in various stages of permissions, approval and financing.
SHP Policy in Brazil
Within the 1998 Law for SHP which created incentives for the sector (Law 9658), owners of plants can sell power directly to large consumers (who demand over 500kW), they can use the grid system with at least a 50% discount on distribution charges and can avail of special funds to generate energy in remote areas (especially in the north).
SHP companies supplying hydroelectric technology that have already entered the Brazilian market are mainly from USA and Canada, Spain as well as the long-established local branches of large companies such as ABB and Siemens.
Financing SHP in Brazil
The emphasis for SHP development is currently in the north and northwest, which has a large concentration of rivers and remote villages along them. The aim is to replace diesel generators in these villages and every SHP project can qualify for carbon financing.
The Federal Government provides a number of financial incentives to owners/developers of small-scale hydro schemes and various international banks and agencies are also active in the sector in Brazil. The Program for Energy Development in States and Municipalities (PRODEEM) is a recent example of a pu-blic–private partnership initiative that has supported small-scale renewables for electrification of remote communities.
USAID is running an energy program between 2003 and 2008 in Brazil worth $1.2 million this year, the primary goal of which is to reduce greenhouse gases by developing and encoura-ging biomass fuels, solar and wind power, and small-scale hydropower plants. A secondary goal is to reduce poverty and improve the quality of life for communities that currently lack access to reliable energy.
