December 13, 2018 / 6:15 PM / in a month

France's EDF faces delay in Brazil dam over clearing trees

BRASILIA (Reuters) - A consortium led by Electricité de France SA is ready to fill the reservoir of a hydroelectric dam built in Brazil’s soy belt, but could be delayed by a year over removal of trees from the area to be flooded, the company and state officials said.

FILE PHOTO: Virgin Amazon rain forest borders deforested land prepared for the planting of soybeans, in this aerial photo taken over Mato Grosso state in western Brazil, February 25, 2008. REUTERS/Paulo Whitaker/File photo

Prosecutors are asking Mato Grosso’s state environmental agency to deny the 402 megawatt UHE Sinop dam an operating license until all the vegetation is cleared, which could add 400 million reais ($103 million) to its 2.9 billion reais price tag.

If the trees are not removed, environmentalists say, the wood will rot in the water and create methane gas emissions that will contribute to global warming and pollute downstream waters for indigenous communities that live off fishing.

Jean-Christophe Delvallet, chief executive officer of Sinop Energia, in which EDF has a 51 percent stake, said the company has already started to buy energy on the market to fulfill its obligations to supply Brazil’s national grid starting January 1.

State-run Eletrobras, Brazil’s biggest utility company and whose privatization is being studied by the incoming government of President-elect Jair Bolsonaro, holds the remaining 49 percent through two subsidiaries, Eletronorte and Chesf.

About 75 percent of Brazil’s electricity comes from hydropower and the country is the world’s third largest producer of hydroelectricity, behind China and Canada.

Bolsonaro, a right-wing politician who takes office Jan. 1 with strong backing from the farming and agribusiness sectors, plans to relax rules for environmental licensing and revive plans to build dams held up by environmental criticism and resistance from indigenous tribes.

With the rainy season beginning and lasting through May, Sinop Energia is running out of time.

“This is really the time to start filling the reservoir. If not, the major risk would be losing the hydrological window, which would delay power generation for many months, until even a year,” Delvallet said by telephone.

According to documents seen by Reuters, the prosecutors say the company has only removed 8,000 hectares of vegetation from the 34,000-hectare area to be flooded. They also dispute the mathematical model used by Sinop Energia to argue that the remaining trees will not pollute the environment with methane.

Delvallet said his company has suppressed 46 percent of the relevant reservoir vegetation and is negotiating an agreement.

A meeting is scheduled for Friday to find a solution, state prosecutor Joelson Maciel said by telephone.

“If the wood is not removed, our concern is that the water of the reservoir will become a soup that will be highly damaging for the environment and increase greenhouse gases,” Maciel said.

The prosecutors backed up their case with a study by climate change expert Philip Fearnside, a critic of plans to build more hydroelectric dams in Amazonia, the world’s largest rainforest. He contributed to the reports of the Intergovernmental Panel on Climate Change, which was awarded the Nobel Peace Prize in 2007 jointly with former U.S. Vice President Al Gore.

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Although proponents see hydroelectric dams as a renewable source of energy, they emit substantial amounts of greenhouse gases, especially methane, which has a greater impact per ton of gas than carbon dioxide in the short term, Fearnside said by email.

“Sinop is an important case not only because of potential impacts there, but also as a precedent for what happens with the many planned dams in Amazonia,” said Fearnside, who works at the Amazon National Institute of Research in Manaus.

Sinop, a major soy producing area, is on the border of the Amazon region and the dam has been built on the Teles Pires river that flows north into the Amazon.

Reporting by Anthony Boadle; Editing by Phil Berlowitz

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