HomePublicationsInsightsChamber approves lock requirement in new hydroelectric projects

Chamber approves lock requirement in new hydroelectric projects

Without fanfare, the Chamber of Deputies approved a bill that tries to circumvent historically opposing views between the electricity sector and the logistics area. From now on, new hydroelectric power plants must always be built together with locks that make it possible to transport cargo along navigable rivers. The project, voted the day before yesterday in a special committee, is final and only needs to be taken to plenary if at least 10% of the deputies – 52 parliamentarians – sign a specific request for this. The trend is that this does not occur and the text can go directly to the Senate.

The obligation to build locks concomitantly with hydroelectric works has always been the subject of contradictory assessments within the government itself. The Ministry of Transport was never satisfied with the construction of the navigation system only after the completion of the plants and alleges that it could cost up to 70% less when it leaves the drawing board together with the dams. For the Ministry of Mines and Energy, the concern has been essentially with the value of the megawatt-hour to final consumers. In the electricity sector, the fear was that requirements for multibillion-dollar works to bridge gaps would generate additional costs for the winners of auctions for new projects and push up tariffs.

In the absence of a middle ground, the vision of the energy area prevailed. “People live without waterways, but they can't live without electricity”, says a government interlocutor on logistical issues. Without an agreement, large-scale dams on the Madeira (Santo Antônio and Jirau) and Teles Pires rivers were tendered without the obligation of locks, although the concessionaires responsible for the dams have developed basic engineering projects that foresee and pave the way for them in the future. Now, when tenders for mega-plants on the Tapajós River begin to be prepared, the impasse has been broken.

“We built a great consensus”, says deputy Eduardo Sciarra (PSD-PR), rapporteur of PL 5.335, originally presented in 2009. “I noticed everyone's enormous willingness to talk. The Ministry of Mines and Energy, the Ministry of Transport, the productive sector and the heavy construction sector were satisfied”, guarantees Sciarra.

He recognizes that opportunities to speed up the construction of locks on important rivers, such as the Madeira and Teles Pires, were lost with the delay in making the project acceptable to all involved. But he stresses that there is still 100 MW of hydroelectric potential in the Amazon region and taking advantage of the navigability of its rivers could be decisive in reducing logistical costs. “Mostly for commodity producers.”

The direct action of the Civil House circumvented differences between the ministries and helped Sciarra to put together a text that was praised for its balance. “He arrived at a version of the project that is feasible”, summarizes Cláudio Sales, president of Instituto Acende Brasil, an observatory of the electric sector heard by the rapporteur during the negotiations.

One of the aspects that afflicted investors was precisely whether the requirement to build locks would increase the expected cost of hydroelectric plants. The approved text defines, however, that the expenses with the “total or partial” construction of systems on “potentially navigable” roads will be the responsibility of the Ministry of Transport. The final wording also guarantees “separation and independence” of the operation and maintenance of the navigation systems – that is, the hydroelectric concessionaire will not be responsible for this activity.

The formula protects, according to Sales, consumers from additional costs in energy tariffs. The winner of auctions for new plants will have the obligation to build locks with their own resources only in the case of rivers that are already used as waterways in the stretches of future projects. Hydroelectric plants of up to 50 MW are exempt from the obligation.

Nobody can guarantee whether, in the midst of the electoral campaign, the Senate will be able to vote on the project before the São Luiz do Tapajós auction – expected for the end of this year. Another point of uncertainty is that “necessary measures” to comply with the new requirements, according to the text approved by the Chamber of Deputies, will only be defined in government regulations.

Even with these reservations, the former secretary of National Transport Policy and current executive director of the T1 agency, José Augusto Valente, sees the approval of PL 5.335 as a step forward. “The need to expand water transport, mainly the flow of grains through the North region, is pressing. It is no longer possible to complain about the limitations that Santos and Paranaguá are unable to ship all the soybeans and corn. It is necessary to invest urgently in the expansion of the waterways”, emphasizes Valente.

Source: Valor Econômico

By Daniel Rittner | From Brasilia

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