UPDATE – Brazil to auction 11,182-MW Belo Monte in early 2009

Brazil’s energy minister predicts the concession auction for the 11,182-MW Belo Monte hydroelectric project will be held in the first half of 2009.

Mines and Energy Minister Edison Lobao told reporters the specific auction date has not been set for the big project on the Xingu River, the government’s Agencia Brasil said.

Lobao added that federal utilities, subsidiaries of national utility Centrais Eletricas Brasileiras S/A (Eletrobras), would be allowed to participate in bidding consortia, but would be restricted to minority participation of about 40 percent maximum of bidder groups.

A recent challenge to the auction results for the 3,300-MW Jirau hydroelectric project put two state-owned utilities on opposite sides of the dispute. (HNN 7/24/08)

To avoid a key conflict of the Jirau auction, Lobao said the auction rules for Belo Monte would limit construction of the project to a specific site.

The consortium that won the Jirau project said it planned to move that project nine kilometers from its original location as a way to save 1 billion reais (US$626 million). The energy minister said an agreement is being sought to avoid legal action that might delay construction of Jirau up to ten years.

Brazil limits hydro on Xingu River to Belo Monte

Brazil’s national energy policy council declared in July that hydropower development on the Xingu River would be limited to Belo Monte. (HNN 7/17/08) Lobao signed the declaration of the Conselho Nacional de Politica Energetica (CNPE) for publication in Brazil’s national gazette July 17.

Agencia Brasil said the declaration emphasized the importance of the Xingu River area for conservation of biological diversity and protection of native culture. It also called for Eletrobras to conduct anthropological studies on the native communities affected by the project and to hear affected communities.

The declaration also noted the river reach where Belo Monte is proposed has a significant natural fall and flow that allows generation of energy by a single hydropower exploitation on the Xingu.

A 2007 inventory of the Xingu River Basin found that Belo Monte was the only feasible hydro project and dismissed the idea of developing other previously identified hydro sites. (HNN 12/5/07) Eletrobras submitted the inventory to electricity regulator Agencia Nacional de Energia Eletrica, updating basin studies conducted in the 1970s and 1980s.

The earlier studies had also considered development of a separate 20,000-MW project on the Xingu that would have inundated 18,300 square kilometers. By contrast, Belo Monte would inundate 440 square kilometers.

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