Even a World Wonder Can’t Keep Brazil’s Lights On in Drought

At the entrance of the world’s biggest power station, not so far from the thundering Iguacu Falls, a sign in gigantic bold characters boasts: “One billion megawatts! Enough energy to illuminate the planet for a full month.”

Declared one of the seven engineering wonders of the world by the American Engineering Society after it opened in the mid-1980s, the Itaipu hydroelectric station produces a quarter of the energy driving Latin America’s biggest economy. So far, it has generated a billion megawatts.

Impressive though Itaipu might be, it also is a symbol of a country hostage to its own hydroelectric power and currently hit by its worst energy crisis in decades.

When the first of Itaipu’s 18 turbines started turning, Brazilians hailed the event as a big step toward energy self-sufficiency.

Its 12.6-megawatts/hour capacity, the government boasted, was just a drop in the hydroelectric potential of a country whose lakes and rivers hold 12% of the earth’s drinking water.

But the energy crisis that has brought emergency rationing across the country since June is a shocking reminder of how far Brazil still is from that goal.

Water may still be flowing down to the Itaipu’s dam, but as Brazilians struggle to slash 20% off their electricity use, many feel they have been transported back to the time when microwave ovens, personal computers and other modern energy-eating appliances did not exist for mass consumption.

The shock waves have reached even this city on the Brazilian-Paraguayan border.

“One gets used to it,” said Oracilda de Oliveira, receptionist at the Foz do Iguacu hotel, whose lobby lights are dimmed. “You turn lights off as soon as you don’t need them anymore. It becomes automatic, at home or in the office.”

The Itaipu station belongs to both Paraguay and Brazil, but Paraguay uses only a tenth of its 50% share. The rest it sells to Brazil.

But that’s still not enough to meet Brazil’s needs.

So, 10 years after Itaipu was finished, after investments of $16 billion, the noise of trucks unloading construction materials is back. A consortium led by France’s Alston is installing two additional turbines to raise its output by 1,400 megawatts per hour to 14,000 megawatts per hour by 2004. The price: $185 million.

“These additions represent the power of a medium-size hydroelectric plant which, if built independently, would cost at least $1 billion,” says Claudio Benetta, an Itaipu spokesman. “Our low cost is owed to the dam, which is already there along with all its facilities,” he said.

But the upgrade will be just a fraction of what energy-thirsty Brazil needs.

To avoid California-like blackouts, the country would have to compensate for the lack of investments in energy throughout most of the 1990s, when the economy grew faster than the supply of energy, creating a gap partly responsible for the shortage.

Investments in the electrical sector in that period were just $6 billion--half the total of the previous decade, according to official figures.

Brazil Banks on Its Rivers

The construction of hydroelectric plants began in earnest in the 1950s, after a devastating five-year drought that led to severe rationing.

Brazil moved to tap its huge potential. While other countries were relying on coal, oil, natural gas or nuclear power, Brazil chose the potential of its hundreds of rivers.

Forty years later, installed capacity had grown almost 20 times, up from 3,500 megawatts to close to the current 70,000 megawatts. No other country in the hemisphere relied so heavily on hydroelectric power.

Officials boasted that dams provided clean energy, its source was renewable, its long-term cost was low, and with more dams the total output could still double. Energy wealth was something Brazil could take for granted if resources were allocated to build and improve dams.

But when Itaipu put its 18th turbine into motion in 1991, Brazil’s financial resources were dwindling. Little money was left for new plants and transmission lines.

Another priority to tackle sprang to the top of the list: inflation. And one of the favorite weapons against it was to repress public spending. Plans for new dams were shelved.

To make things worse, nature did not help. Rains last year were scarce. Water coming from rivers filling the dams was less abundant.

Keeping the Country’s Energy Reserves Afloat

The country was undergoing one of the worst droughts in decades. Dams, all working at the top of their potential, were placed on the brink of collapse.

But Itaipu was an exception. Rains in the southern part of the country were not as bad, and by the end of June the level of its 521-square-mile lake were the same as early this year. But the spillgates have been closed since February, when it was clear that water would be scarce.

“Look--the water level is at 219.40 meters. It is just 60 centimeters below 300 meters, when the spillgates get open,” said Carlos Augusto Braga, showing a reporter around the plant.

But experts anticipate that in the months ahead Itaipu will have to use more water than the dam gets, and water levels will fall.

To overcome the crunch, the country plans to add 19,500 megawatts in three years, when the Itaipu extension, along with another of 21 new hydroelectric dams and at least 26 natural-gas-fueled thermoelectric plants are scheduled to begin operation.

The effort will demand tens of billions of dollars, a great deal from private investments. But nature or other forces are expected to intervene and prevent blackouts that would crush economic growth to a scant 2% to 2 1/2% this year, down from the 4%-plus forecast at the beginning of the year.

“The [government] plan is beginning to show results,” President Fernando Henrique Cardoso said. “But we should still pray for rains to fall to allow us to face the crisis until the thermo plants start working.”