WSHPDR_2013_Final_Report-updated_version

SHP installed capacity (up to 10 MW)
SHP potential (up to 10 MW)
1023 MW
unknown
and biofuel mandates), to finance (funds available for
infrastructure), to debt funding and tax based polices
consisting of tax relief, import duty and tax rebates. 3
SHP installed capacity (up to 30 MW)
SHP potential (up to 30 MW)
4106 MW
22500 MW
0 6000 12000 18000 24000 30000
Figure 2 Small hydropower capacities in Brazil
The decreasing share of small hydropower in the
country’s renewable energy mix is associated with the
growth of wind energy. In the years of 2006-2008
small hydropower gained its highest amount of grant
aid to diminishing amounts from 2009 onwards
reaching its lowest grant gains in 2011. 3
The 2009-2019 Ten-Year Plan (PDE) predicted a growth
rate of 72.3 per cent for small hydropower in 2009,
however, this estimate dropped down to 69.4 per cent
in the 2010 PDE. 10
In 2012, the National Interconnected System increased
its electrical capacity by 1.212 MW from which small
hydropower plants covered 21 MW. 4
Renewable energy policy
According to (PDE) of 2020, the participation of
renewable sources such as hydro, wind, ethanol and
biomass in the Brazilian energy matrix will rise from
45.5 per cent in 2011 to 46.2 per cent by 2020.
According to the PDE 2020, the Brazilian Government
predicts that the electric matrix will, in relation to
small hydropower, present 4,957 MW (3.5 per cent) in
2015 and 6,447 MW (3.8 per cent) in 2020. The
increase is not very significant, but when observing
the growth rate of other renewable energies in the
country, it can be seen that governmental incentives,
like tax exemption, are having positive results.
The Environmental National Council (CONAMA)
Resolution 01/86, in Article II states that powergenerating
plants having power above 10 MW are
activities that are potentially impacting the
environment and are therefore Environmental Impact
Assessment (EIA) and Environmental Impact Report
(EIR) liable, regardless of the primary energy source .
Under this legislation, EIA is required for all small
hydropower projects with generating capacities
ranging between 10 and 30 MW. Furthermore, small
hydropower projects are also classified as ventures
with a high impact to the environment, graded as
three in a classification of one to five. Small
hydropower projects with less than 10 MW of
generating capacity require simplified environmental
studies.
The energy policies of Brazil can be summarized to
those relating to the market (feed-in-tariff, auctions
Legislation on small hydropower
Law 9658 of 1998 created incentives to encourage the
use of small hydropower by allowing small
hydropower producers to sell the energy directly to
the consumers via the grid at a 50 per cent discount
rate for grid use. In addition the recent Law 10438/02
gave way for the Incentive Program for Alternative
Electric Generation (Programma de Incentivo a Fonres
Alternativas, PROINFA) that aims to encourage the
linkage of small hydropower, inter alia, with the
national grid. The second stage of PROINFA is
currently underway with the main objective of
attaining 10 per cent of electricity production, over
the next 20 years, from renewable sources. 11
Barriers to small hydropower development
Small hydropower currently faces disadvantage among
renewable energy sources, mainly in comparison to
wind energy, which has more incentives. Small
hydropower has lost competitiveness and has
difficulty in competing within the regulated market. As
far as other energy sources are concerned, the cost of
constructing and operating small hydropower plants
has been shown to be more expensive. The costs for
civil construction and electro-mechanical equipment
are elevated and are not covered by tax exemptions
unlike the equipment for wind farms, which are
exempt from taxes such as the Tax on Circulation of
Goods and Services (ICMS). Also, the environmental
licensing processes pose a challenge.
References
1. Central Intelligence Agency (2012). The World
Factbook. Available from
www.cia.gov/library/publications/the-world-factbook/
2. Faccio Carvalho, Paulo César (n.d.). Country
Pasture/Forage Resource Profiles Brazil.
United Nations Food and Agriculture Organization of
the United Nations. Available from
www.fao.org/ag/AGP/AGPC/doc/counprof/Brazil/brazi
l.htm.
3. Bloomberg New Energy Finance and Multilateral
Investment Fund (2012). Climatescope 2012: Assessing
the Climate for Climate Investing in Latin America and
the Caribbean. New York. Available from
www5.iadb.org/mif/Climatescope/2012/img/content/
pdfs/eng/Climatescope2012-report.pdf.
4. Organización Latinoamericana de Energía (2012).
2012 Energy Statistics Report. Quito.
5. International Energy Agency (2011). World Energy
Outlook 2011, 9 November 2011. Paris.
6. Empresa de Pesquisa Energética, Ministerio de
Minas e Energia (2012). Balanço Energético Nacional,
Brasília. Available from
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