Presidente da Empresa de Pesquisa Elétrica (EPE), Maurício Tolmasquim, participa de videoconferência para jornalistas estrangeiros para explicar o projeto Belo Monte e informar sobre as iniciativas socioambientais do empreeendimento.
Íntegra da entrevista transcrita em inglês aqui.
Transcript: conference call with Mauricio Tolmasquim on Belo Monte Dam Project
Teleconference held by the president of Brazil's Energy Company (EPE) to international media.
Moderator: Good morning everyone, and thank you for joining us for today's call with Mauricio Tolmasquim, the president of Brazil's Energy Research Company, EPE. Mr. Tolmasquim is with us today to provide updates and answer questions about Brazil's Belo Monte hydroelectric dam project. Mr. Tolmasquim will be providing his remarks in Portuguese, followed by an English translation. The same will be true for the Q&A portion of this call. For the benefit of all participants, we ask that you please direct your questions to Mr. Tolmasquim in English. Now I would like to turn the call over to Mr. Tolmasquim. Sir, please go ahead.
M. Tolmasquim: Good morning everyone. I would like to thank you for the opportunity to clarify any issues related to the Belo Monte plant.
I'd like to say that Brazil, as a country, has one of the most renewable energy matrices in the world, with 90% of power coming from renewable sources, in comparison with the world's average, which is 18%.
As a result of this renewable matrix that we have, as far as energy is concerned, our greenhouse gas emissions are much lower than the rest of the world, particularly because of our consumption and production, which basically leads Brazil to consume less energy. For example, as far as consumption is concerned, when compared to the world, Europe emits 110 times more greenhouse gases than Brazil, while China emits 190 times more, and the United States emits 200 times more than Brazil because of electrical power consumption.
M. Tolmasquim: In order for the Brazilian economy to grow around 5% per year in the next few years, Brazil needs to add 5,000 megawatts per year to its installed capacity.
As far as this projection is concerned, energy conservation measures have already been taken into account. For example, for the next 10 years, the effect of these energy conservation actions will have the same effect as the actual production expected for Belo Monte.
Part of this strong need to expand the electrical power sector is justified because of the low consumption rates in Brazil. For example, the per capita household consumption of electricity in Brazil is still very low. For you to have an idea, the per capita consumption of electricity in Russia is 50% more than in Brazil; in the United Kingdom, three times as much as in Brazil; and in the United States, it's eight times as much as in Brazil. In other words, despite increasing energy efficiency, in order for us to be able to eradicate or improve social inequality, electricity consumption will have to be increased and therefore, we need to expand the Brazilian electrical system.
Belo Monte allows Brazil to achieve two objectives. First, it manages to meet the energy needs of the country, which will foster growth in development; while at the same time maintaining low levels of greenhouse gas emissions.
For example, in order for us to replace the Belo Monte plant for thermal power plants, our emissions would be, for the same energy generated, 19 million tons of CO2 based on natural gas. This 19 million tons of CO2 actually corresponds to more than all electrical sector emissions for 2007. And this is considering that it would be natural gas, and not coal.
Belo Monte was developed with the aim of bringing the smallest possible negative effects to local communities. And, in fact, the Belo Monte power plant will bring positive effects to the region.
No indigenous land surrounding the area of the project will be flooded. No indigenous community will be moved out of their land.
FUNAI, which is the Brazilian agency that looks after indigenous people, held more than 30 meetings with the different communities with over 1,700 indigenous people. During these meetings, FUNAI was able to explain the project, as well as listen to their concerns and worries about the project.
In relation to non-indigenous communities, our estimate is that only 5,000 families will have to be moved. In other words, this is a very different project from other major projects, such as the Three Gorges Dam project, which was estimated to have relocated one million people.
M. Tolmasquim: Many of the families that will actually be moved as a result of the project live in very precarious conditions. In the region of Altamira, many live in houses that are built over the river - they are almost floating over the river - and for half of the year, they have to leave their houses due to flooding. These families will actually get new houses made from brick and cement, for example.
The city will receive a new sewage system. Water will be treated as well, along with roadway infrastructure and urban improvements.
The investors are going to invest somewhere around R$ 3.3 billion as social and environmental compensation. And this is actually equivalent to 19 times the actual total budget for the state of Pará. And these resources will be directed only to the region linked with Belo Monte; in other words, surrounding Belo Monte.
In addition, the federal government is going to implement a regional sustainable development plan for the Xingu region. In other words, the public branch will bring more financial resources to the region.
The benefits of Belo Monte are not just social, but environmental as well. Conservation areas will be created in an area called Volta Grande in Xingu, and on the right side of the area as well, on the actual riverbank. The degraded areas will be recovered.
In conclusion, I would say that Belo Monte is much more than just a mere electrical power plant, but a driving force for sustainable development in the region.
That concludes my opening remarks and I am now here at your service to answer any questions that you may have.
Operator: Our first question is from the line of Paulo Winterstein with Dow Jones Newswires.
Paulo Winterstein: Hi, Mr. Tolmasquim. You mentioned if Belo Monte would be replaced with thermal plants, but a lot of the criticism of Belo Monte is that smaller hydroelectric plants would perhaps be more efficient and have less of a negative impact. I just wanted to ask: how do you respond to criticisms that smaller plants would be more effective?
And second, that while the capacity of Belo Monte is about 11,000 megawatts, average output would be, I think 3,000 or 4,000, and some people have said that in extraordinarily dry years, three-fourths of the year, the dam actually wouldn't produce any energy at all because of low water levels.
M. Tolmasquim: In relation to small electrical power plants in Brazil, we consider a small power plant to be one that actually generates 30 megawatts. The thing is that we would need more than 300 smaller power plants in order to be able to supply the same amount of energy as Belo Monte. And 300 plants in the Amazon would probably have a much more negative environmental effect than just one large one.
In relation to the effective generation in installed capacity, I would like to mention that, really, no plant actually generates the maximum permitted capacity. In Europe, for example, the relation between energy production and the actual installed capacity is around 35% or 40%.
In Belo Monte we have 40%. The average in Brazil is around 55% and thus, Belo Monte is a little bit below the national average. However, there are reasons for this. One of the main reasons is related to the need for ensuring that energy generation is compatible with the environment.
In order for Belo Monte to generate more, we would need a much bigger reservoir. It would also be necessary for us to build other plants on the Xingu River. It would also be a problem because we would not be able to ensure that the indigenous communities would have water in the Xingu region.
Both of these possibilities are unacceptable for us because we believe that Brazil cannot explore its hydroelectric power potential by creating these kinds of situations. Therefore, we prefer to not necessarily achieve all of this output, but preserve the sustainability in the region.
The good news is that even without this additional energy output, this power plant continues to be incredibly competitive. And how can we prove this? By comparing the value of megawatts generated.
The cost of generating energy through Belo Monte is around half of the cost of other renewable sources, thermal sources, among others.
Ken Rapoza: How much will Belo Monte lower the cost of energy/electric power for mining operations in Pará? And if so, how important is Belo Monte for mining in the State?
M. Tolmasquim: It is important to point out that 70% of the energy generated at Belo Monte will be for the regular market, or in other words, the electricity distributing companies.
Thirty percent of this energy is basically left for the free market, where you have all different kinds of industries involved. A small part of these industries could be mining
M. Tolmasquim: companies, but at the moment, we do not know which ones, or how many. Therefore, we cannot guarantee that mining companies will be receiving this electricity.
Gustavo Faleiros: Good morning. Mr. Mauricio, just one point of clarification. So it's for sure that there will be no more in Xingu River as there is a legal commitment to not build more dams besides Belo Monte? And my actual question is about the emissions from the dam. What do we know about the methane emissions that will be caused in the reservoir?
M. Tolmasquim: Well, there was a decision made by the National Energy Policy Council which established that no more power plants would be built in the Xingu River, and in order for this resolution to actually come in effect, it is signed by the President of the country and, thus, it has very high legal status.
In relation to the emissions from Belo Monte, what I can say is that they will be practically nil because of two reasons. First, it is a runoff river power plant, therefore, it doesn't have a reservoir. Furthermore, in order to avoid methane gas emissions from decomposing vegetation, for example, 100% of the vegetation will be removed from the reservoir canals. Therefore, the emissions from Belo Monte should not be any different than the emissions that we already see being emitted by the river.
Zachary Hurwitz: Thank you. According to a recent article in the Journal of Science, reservoir storage capacity in the Amazon is decreasing due to climate-related drought, and we saw evidence of this last year in the worst ever drought on the Rio Negro, five years after the worst ever drought on the Rio Madeira. I'd like to hear how Mr. Tolmasquim justifies building the Belo Monte given this fact.
M. Tolmasquim: The effect of climate changes on the river's outflow basically are data that have not actually been proved yet. And in addition, the studies conducted in Brazil in relation to the eventual effects of climate change also pointed to a reduction in wind. These studies actually consider a horizon of 100 years. Let's suppose that, indeed, we do see these reductions in the next 100 years - we feel that this is something that should not stop us from building, for example, wind power plants, and thus we continue to build electrical power plants.
We also consider that in the next few years, water-generated electricity, and of course, wind-generated electricity, can contribute very much to reduce greenhouse gas emissions, even if we do end up seeing in 100 years' time a reduction of the rivers and wind.
Nadia Pontes: Yes, Belo Monte seems to be the only way out for the government. I was going to ask about the wind turbines you just mentioned. Is Belo Monte actually the only way out for the government, or why not more investment in wind turbines?
And the second question. There are, I think, nine processes, and the Pará state is trying to stop the project. Is the government in a hurry to do Belo Monte? Why is the government not listening to these people in Pará?
M. Tolmasquim: Brazil considers it necessary to have many different alternatives for generating electricity and Belo Monte is just one of these alternatives.
Brazil has a great potential for wind and biomass-generated electricity. In the last few years, Brazil contracted 10,000 megawatts from biomass and from wind-generated electricity, which would correspond to one Belo Monte power plant.
Brazil is actually a very fortunate country because it can use water, wind and biomass energy as a complement to its energy matrix. For example, in Europe, wind energy is complemented by thermal energy. While in Brazil, wind power is a partner of water power. Therefore, our issue here is really not whether it is wind or water-generated electricity, but wind plus water-generated electricity.
In relation to the legal action against Belo Monte, it is important to point out that there was a very thorough process to actually hear the local community.
During the development of the environmental impact study, we had 12 public meetings; ten workshops with the community; 14 technical forums, four of which were held in Belém, which is the capital city of that State; 30 meetings in indigenous villages with participation of approximately 1,700 indigenous people; a visit by the media agents and social communication agents to around 5,300 families; 61 meetings with communities, with an attendance of 2,100 people; ten lectures at primary and lower secondary education schools to around 530 students; and four public hearings which were promoted by IBAMA. And in Altamira, one of these public hearings had an audience of 6,000 people, which made it the biggest ever public hearing in the history of Brazil.
Brazil is a democratic country, where it is very important for us to have these discussions. But at some point, a decision does need to be made. Listening to the stakeholders, for example, is incredibly important because the project was actually changed as a result of this conversation that was held with the local community.
M. Tolmasquim: For example, we had originally projected to build many different plants in the Xingu River, and thanks to the actual local populations' opinion on this matter, only Belo Monte is going to be built. In the original project, the reservoir for Belo Monte was actually three times bigger than the actual reservoir that is going to be built now. Therefore, Belo Monte is actually the result of local social participation.
Like any other venture, there is always a small minority that is against it and doesn't actually want any kind of power plant at all. However, in a democratic society, this position cannot actually stop the government from providing a solution that is going to be beneficial to the country and the region.
Paulo Winterstein: Hi. I just had a question following on the reporter from the Deutsche Welle. With the lawsuits from public prosecutors, is there a risk that the January 2015 deadline won't be met, and does this put some of the energy needs for the country at risk in the coming years?
M. Tolmasquim: Well, as in any other lawsuit, the judicial power has the final word.
We believe that the portfolio for the Belo Monte project is strong enough in order for us to actually have a favorable decision in court. Of course, the final word comes from the judicial power.
In relation to Brazilian energy needs, I have to say that the country has a surplus into 2014 of 5,000 average megawatts, which takes into consideration a 5% GDP growth rate per year. In other words, the surplus that Brazil has actually allows the country to grow 7% per year regardless of energy.
And, of course, Belo Monte is important, however, there are other sources that Brazil can turn to in order to ensure energy supply.
However, we are actually quite confident that Belo Monte's construction will actually begin as planned to ensure that we don't actually have to reduce our surplus supply.
Gustavo Faleiros: Yes, it's a follow-up as well. On this matter of the final word being a judicial word, I would like to know the opinion of Mauricio about the opinion of IBAMA. What happens if IBAMA doesn't actually approve the conditions - as they still are not approved - and what happens with the license itself?
M. Tolmasquim: IBAMA is a sovereign body, therefore, they have the final word on the licensing matters. So if IBAMA decides that the conditions are not actually fitting as far as being able to grant a license, then either the project is cancelled or perhaps postponed until alterations can be made to meet the conditions.
Ken Rapoza: Okay. Yes, I heard Tolmasquim say that there were 5,000 people that had to be relocated. I thought it was 20,000 so I wanted some clarification on that.
M. Tolmasquim: Five thousand families.
Ken Rapoza: Okay. So that would be about 20,000 people, we'll say. It's about the same.
M. Tolmasquim: It would be about the same, yes.