Falling water, rising hopes

ITAIPÚ, Paraguay — In the heart of the Paraguayan jungle, 14 kilometres upstream of the roaring Iguazú Falls, the Paraná River goes so still the glare of the sun gives it a mirror-like appearance.

This shimmering sheath is actually the reservoir of the Itaipú Dam — the largest hydroelectric power plant in the world. The series of structures that contain the reservoir is nearly eight kilometres long.

There is a powerful humming on the other side of the wall, as more than 700,000 litres of water per second gush through the concrete tubes of the main dam, which stands 200 metres high.

Considered one of the seven wonders of the modern world, the Itaipú Dam was developed as a joint project between Brazil and Paraguay in the 1970s. It's been two decades since this monolith first began churning out electrical power, and it has marked new production records ever since.

Today, each of 18 generators can produce up to 700 megawatts, and two new ones are scheduled to begin production by the end of this year. With 20 generators, Itaipú's annual electrical production will be close to 100 million megawatt hours — surpassing even China's Three Gorges plant and its projected generation of 84 million megawatt hours.

As it is, Itaipú supplies 24 per cent of the electric energy demand in Brazil and 95 per cent of the electricity consumed in Paraguay. The two countries have shared the costs and benefits of the project along their common river.

Since just one of Itaipú's generators can supply almost all of Paraguay's electricity needs, the country sells the excess from its side to Brazil. Those sales alone account for 45 per cent of Paraguay's gross domestic product.

Then, there are the royalties received as compensation by the governments of Brazil and Paraguay for use of the hydroelectric potential of the Paraná River. In turn, the governments have invested the equivalent of almost $2.4 billion in the cross-border region, home to about 500,000 people.

"Itaipú has been fundamental to our economic development," says Abel Gimenez, spokesman for the Paraguayan side of the Itaipú Binational Authority, which operates the dam. "That a country can reach a positive balance, where the benefits are so marked, for a dam the magnitude of Itaipú ... well, few other resources can compare."

And today, the dam itself has become a tourist attraction that, in number of visitors, almost rivals Iguazú National Park.

There's no denying the importance of Itaipú for the struggling economy of tiny Paraguay, a landlocked country considered the second poorest in South America. But it has also created a certain dependence.

There have been questions raised about the favourable rates at which Brazil buys Paraguay's excess electricity: the equivalent of 18 cents per kWh.

"Those kinds of arrangements aren't surprising because we are a small country that is highly dependent," says forestry engineer Angel Parra. "We depend on Brazil too much."

He says Paraguay's dependence has also made the government kowtow to Brazilian enterprises buying Paraguayan land for soya cultivation. Parra says Paraguay has lost 85 per cent of its dense forest, largely to clear-cutting for agriculture.

The dam itself also flooded thousands of hectares of native forest. Parra, who works with Guyra Paraguay, a wildlife conservation organization, says that has led to changes in the region's microclimate and aquatic ecosystem. It has altered precipitation levels and led to the extinction of several native bird, plant and animal species.

Nevertheless, the Itaipú authority has received international kudos for its efforts to preserve the fauna and flora of the region and minimize the dam's impact. It claims to have preserved all of the existing native forest and reforested the areas already devastated by agricultural practices. More than 20 million tree seedlings were planted in a protection belt for the dam reservoir.

But Parra says those trees were necessary to ensure the efficiency and longevity of the dam.

Itaipú also maintains biological refuges to preserve native flora, and undertakes soil conservation and road improvements, maintains community water dispensers and rural sanitation and recycles agro-toxic containers.

It also helped create the new Santa Maria Corridor of Biodiversity, a tunnel built underneath the highway for the safe passage of animals between the protection belt of the Itaipú Lake with the Iguazú National Park.

Alberto Roque, with Friends of the Earth International, says although there were subsequent attempts to safeguard the area's wildlife, there has been little acknowledgement of the dam's human toll. The Guaraní natives who used to live and hunt in the area have lost their traditional way of life.

"You don't see those people today anymore," Roque says. "Many of the people lived on islands or on riverine forests, and all those are underwater now. If you combine that and the deforestation, then you have a recipe for extinction."

Today, you can find the Guaraní on reservations, or selling crafts to tourists around the Iguazú Falls.

According to the World Commission on Dams, large dams have been responsible for the eviction of 40 million to 80 million people, many of them displaced without compensation.

Still, one-fifth of the world's electricity is generated by dams, and they continue to be hailed as a green alternative because they reduce the use of dirty fossil fuels.

"Hydro projects have almost no impact on the environment," says Nicolas Lefevre-Marton of the International Energy Agency. "In fact, hydro is a source of domestic cheap electricity that is stable. It reduces dependence on fossil fuels and there are no emissions."

In fact, studies by the Itaipú Binational Authority estimate the dam prevents 67.5 million tonnes of carbon dioxide emissions. Such reductions make this form of energy attractive, given the emissions reduction commitments of developing countries under the now-reigning Kyoto Protocol.

At a protocol conference in Buenos Aires in December, countries that have signed on to Kyoto debated which new projects can be included for Clean Development Mechanism (CDM) funding under terms of the accord.

CDM is a market-based scheme designed to encourage developed countries to invest in projects in developing countries that reduce greenhouse gas emissions, and count those reductions toward the investor's own targets. Brazilian Minister of Science and Technology Jose Miguez attended the conference, pushing to have hydroelectric dams qualify for such CDM funding.

"Hydroelectricity has allowed Brazil to reduce its emissions to almost zero in the electric sector," he said. "That's a significant contribution, which merits investment."

The International Rivers Network stressed that CDM should be restricted to the promotion of new, renewable forms of energy. It warned that dams are being built that don't allow for the new extremes of drought or floods that global warming is predicted to cause, and don't transfer technology from north to south, as intended by the CDM. As the network's brochure puts it: "Large hydro is slow, lumpy, inflexible and getting more expensive."

The cost for Itaipú has certainly ballooned. The original estimate was $14.9 billion, but after interest and inflation, the Itaipú authority says the cost is now closer to $19.9 billion.

Still, Itaipú spokesman Gimenez says even with the higher cost, the energy it produces and the economic benefits it provides more than compensate.

"Itaipú's construction has been completely justified over time."