Brazil‘s two largest hydroelectric power plants have a combined annual loss of 3.8 thousand GWh of energy due to deforestation.
The deforestation of the Amazon forest is costing Brazil immensely. An unprecedented study by Climate Policy Initiative/PUC-RIO (CPI/PUC-RIO) and Amazon 2030 identifies that the Itaipu and Belo Monte plants, together, lose the equivalent of the electricity consumption of 1.5 million people due to the deforestation of the Amazon raiforest. The energy generation loss causes an annual shortfall of more than US$ 200 million in revenue for the plants.
“Hydropower is a renewable, inexpensive source of generation that provides greater flexibility for operating the electricity system. But it is also a source that is very vulnerable to changes in rainfall patterns. Deforestation of the Amazon affects not only the deforested area, but also negatively impacts plants located kilometers away from the biome,” explains Gustavo Pinto, senior analyst at CPI/PUC-RIO.
Itaipu is Brazil’s largest hydroeletric power plant (HPP) and is located in the state of Paraná, more than 1,000 km from the border of the Amazon biome. Despite its remoteness, the plant’s average loss of annual electricity generation due to deforestation is 1,380 GWh and US$ 86 million in revenue per year. The energy loss is equivalent to the consumption of 552,000 Brazilians in 2023.
In the case of Belo Monte, the second largest HPP in the country, which is located within the Amazon biome, the average loss of annual electricity generation due to deforestation is 2,400 GWh and US$ 110 million in revenue per year. The energy lost is equivalent to the consumption of 956,000 Brazilians in 2023.
Together, the two plants account for 23% of Brazil’s electricity generation. As they are run-of-river plants, they depend on the natural flow of rivers and the rainfall regime.
The Amazon forest influences rainfall patterns through a mechanism known as flying rivers. Moisture-laden air currents carry water from the Amazon towards the Andes in a westward and southeastward direction, ensuring the supply of rivers and the irrigation of crops. When air currents pass through deforested areas, they do not receive the necessary recharges of water from the forest and become less humid, reducing the amount of rain along their path. As a result, river flows decrease, and, consequently, so does the HPPs’ generation capacity.
“Deforestation of the Amazon threatens Brazil’s electricity matrix, as the impacts generated by the plants are quite significant. Added to this, we also have the increased frequency of extreme climate events and water scarcity, which makes the future of the national electricity matrix even more uncertain,” Pinto points out.
The study identifies the areas of the Amazon that are traversed by the air currents essential for power generation at the two plants. In the case of Itaipu HPP, 17% of the area most relevant to its operation has already been deforested. Analyzing the 5% of the forest area most relevant to the plant’s power generation, the value of forest conservation is US$2,240/km².
In the case of Belo Monte HPP, 13% of the forest area most relevant to the operation of the plant has already been deforested. In the 5% of the area most relevant to the plant’s power generation, the deforested region rises to 27%, and the value of forest conservation is US$ 778/km².
“Identifying the areas that most influence the plant’s power generation is important to guide the implementation of conservation and restoration policies more efficiently and the targeting of resources to mitigate the adverse effects of Brazil’s power generation,” says João Arbache, CPI/PUC-RIO analyst.
Arbache also explains the importance of considering the land tenure categories of each area to ensure that proposed solutions are appropriate to local realities.
Hydropower is Brazil’s main source of energy, responsible for 60% of total generation in 2023. The researchers explain that if we continue to lose hydroelectric power, this could compromise the ability of Brazil’s power grid (National Interconnected System – SIN) to meet national demand.
“Companies in the electricity sector should play an active role in conserving the Amazon. Protecting the forest is pivotal for the stability of the energy supply and to avoid economic losses for hydropower plants,” Pinto says.
About Climate Policy Initiative
Climate Policy Initiative (CPI) is an organization with international experience in public policy analysis and finance, which has seven offices around the world. In Brazil, it is affiliated with the Pontifical Catholic University of Rio de Janeiro (PUC-Rio) and works to improve public policies and sustainable finance in order to promote the transition to a low-carbon economy. CPI/PUC-Rio develops evidence-based analyses and establishes strategic partnerships with members of government, civil society, the private sector and financial institutions.
More information:
Camila Calado Lima
camila.lima@cpiglobal.org
(86) 99966-0560
