- Mongabay has begun publishing a new edition of the book, “A Perfect Storm in the Amazon,” in short installments and in three languages: Spanish, English and Portuguese.
- Author Timothy J. Killeen is an academic and expert who, since the 1980s, has studied the rainforests of Brazil and Bolivia, where he lived for more than 35 years.
- Chronicling the efforts of nine Amazonian countries to curb deforestation, this edition provides an overview of the topics most relevant to the conservation of the region’s biodiversity, ecosystem services and Indigenous cultures, as well as a description of the conventional and sustainable development models that are vying for space within the regional economy.
- Click the “A Perfect Storm in the Amazon” link atop this page to see chapters 1-13 as they are published during 2023.
The past two decades saw a massive increase in hydropower across the Pan Amazon. The Brazilian government has scaled back investment in mega-scale hydropower projects but continues to pursue development of medium and large-scale projects. Cost overruns at hydropower dams across the world have exposed them as poor investments, and the national development bank (BNDES) of Brazil has curtailed investments because it does not have the financial resources for mega-scale projects.
Another factor that may impact future development is the pending privatization of Electrobras, the state-owned corporation that was the instigator of most hydropower projects. A corporation managed for the profit of its shareholders may be less willing to allocate private capital for large-scale infrastructure investments with dubious economic returns, particularly if the global trend toward solar and wind lessen the need for large-scale hydropower within national development plans.
A policy contingent on economic and political considerations can be reversed using similar criteria, and resistance to the policy to end mega-scale hydropower in the Amazon appeared within days of its announcement. The administration of Jair Bolsonaro has sent clear signals that large-scale hydropower is part of its development agenda, including a prolongation of the window to complete environmental reviews for dams on the Rio Tapajós and reinitiating feasibility studies for a large-scale dam on the Rio Trombetas that had been abandoned in 2014.
Bolivia’s strategy to export electricity will face tough competition from corporations investing in state-of-the-art industrial solar parks on the Pacific coast. The government is motivated by the belief that a macro-economic policy based on infrastructure investments will drive economic growth, but the proposed model is dependent on foreign investment capital. It is not clear, however, whether Chinese investors will risk their capital on Bolivia’s highly uncertain business model. Geopolitical criteria might convince Brazil to purchase the energy from the mega-scale dams on the Rio Madeira where Brazil has compatible energy assets.
In Peru, the metallurgical sector will continue to drive investment in energy infrastructure, a phenomenon that will accelerate as demand for copper from advanced economies increases with their transition to electric vehicles. The growth of solar and wind energy will limit the demand for high-impact hydropower, but their intermittent nature may motivate investments in hydropower to ensure grid stability. This energy model would favor D&R facilities because they are most adept at managing variations in supply. Ecuador will continue its expansion of hydropower and could experience a step-change in demand if the government follows through on the proposed electric railroad system.
Colombia will continue to develop its hydropower resources, but most of these will focus on non-Amazonian watersheds; Venezuela is unlikely to invest in hydropower over the medium-term due to its current economic crisis. Neither Surinam nor Guyana will need to invest in hydropower because they can generate electricity at very low cost using natural gas that will soon be abundant from offshore platforms. Nonetheless, in 2020, the newly elected government of Guyana expressed a desire to resurrect the abandoned Amalia Falls hydropower project that died a natural death in 2013 due to financial considerations.
The role of China adds an element of uncertainty to the trajectory of the hydropower sector across the Pan Amazon. Its engineering companies have a record of building facilities on time and on budget, which could change the economic calculus that currently makes mega-scale hydropower unattractive. Similarly, its state-owned financial institutions have the capacity to mobilize the capital required by large-scale projects and can leverage their status with the Chinese state to mitigate the risk of default.
Finally, they have shown the flexibility to operate in multiple regulatory environments: they have acted both as investors purchasing distressed assets in Brazil and Peru and contractors providing turn-key solutions for the design and construction of hydropower assets in Ecuador and Bolivia.
“A Perfect Storm in the Amazon” is a book by Timothy Killeen and contains the author’s viewpoints and analysis. The second edition was published by The White Horse in 2021, under the terms of a Creative Commons license (CC BY 4.0 license).
Read the other excerpted portions of chapter 2 here: