Brazil’s Engevix Considers Dams in U.S. Midwest With Hydro Green
Engevix Engenharia SA, the Brazilian engineering company, may form a venture to develop four small hydroelectric plants in the U.S. Midwest with Hydro Green Energy next quarter as local opportunities for projects dry up.
The plants will each have as much as 20 megawatts of capacity and may be located on abandoned locks, Alessandro Carraro, international commercial director of energy for Barueri-based Engevix, said in a telephone interview.
Smaller projects in Brazil that have lower environmental impact because their reservoirs take up less space are expensive and have been losing market share, Helena Chung, an analyst at Bloomberg New Energy Finance’s Sao Paulo office, said today. The country gets most of its power from hydroelectric dams.
“Small hydroelectric plants are unviable compared with other technologies,” Chung said. “They can’t compete against wind farms,” in auctions organized by the government to contract the cheapest available power.
It costs about $2 million to build 1 megawatt of wind farm capacity in Brazil and $2.5 million for a small hydroelectric plant, according to Chung.
“We want to get to know the U.S. market in detail, like commercializing energy and local costs,” he said. “These four projects will lay the basis for future development.”
Separate Auction
Brazil’s government should create a single auction for small hydroelectric plants so developers don’t have to compete against larger projects and wind farms, he said.
“If you put all technologies in the same basket you’re creating imbalance,” he said.
Hydro Green Energy, based in Houston, has permits for hydroelectric projects with more than 300 megawatts of total capacity in 14 states, he said.
Brazil has built about 600 hydroelectric plants that comprise 70 percent of installed capacity, Brasilia-based electricity regulator Agencia Nacional de Energia Eletrica said on its website.
Electricity distributors signed contracts to buy electricity from 78 wind farms in the nation’s last two power auctions in August, national energy agency Empresa de Pesquisa Energetica said on its website. None went to small hydroelectric plants, EPE said.
To contact the reporter on this story: Stephan Nielsen in Sao Paulo at snielsen8@bloomberg.net
To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net
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