"The potential for hydropower growth in Latin America is significant, and current generation is impressive," said Targett. "As the cost of energy increases, there is a resurgence of hydro after development of some of the larger scale projects that were commissioned in the 1960s, 70s and 80s trailed off."
According to the International Hydropower Association (IHA), the major markets in the region include Brazil, Chile, and Columbia. Brazil possesses the largest power system in Latin America, generating 74 percent of all electricity from hydropower, including the 14,000 MW Itaipu project on the Parana River.
Latin America stands out, said Osvaldo San Martin, president and CEO of Voith Hydro Latin America. More than 20 percent of Latin America's feasible hydro potential is still untapped, San Martin said.
Voith is responsible for over 600 hydropower projects in Latin America, accounting for more than 45 GW of the installed capacity in the region and over 35 GW in Brazil alone.
Voith is involved in some of the largest hydropower projects in Latin America, including the 11,200 MW Belo Monte project and the 3,150 MW Santo Antonio project. As other renewable sources such as wind and solar pick up speed in Latin America, Voith still views hydropower as the region's most important source due to the region's natural resources. San Martin said hydropower is necessary to provide stability to the grid, especially during peak hours.
"The untapped hydropower potential is still huge and renewable energy continues to be one of the region's most valuable assets," San Martin said. "We see continued growth in Brazil, especially in the new hydropower sector."
In Brazil, construction continues on the Belo Monte project, which would be Brazil's second largest project behind the 14,000-MW Itaipu plant. The 11 billion project is being built on the Xingu River by Norte Energia with a consortium of 18 partners.
Also in Brazil, construction on the 3,150-MW Santo Antonio project is moving forward. Being built on the Madeira River, work began on the right bank of the river in September 2008.
In March, two turbines began producing power. Andritz Hydro is delivering 12 turbines and generators and 24 regulator systems for voltage generators. Alstom is supplying another 19 turbines and 22 generators.
Santo Antonio Energia expects to complete the project in 2015. The Madeira River Complex, formed by the plants of Santo Antonio and Jirau, will total 6,516 MW. The 3,300 MW Jirau project is expected to be completed by February 2013.
When Santo Antonio, Belo Monte and Jirau are complete, the projects are expected to help Brazil meet its expected delivery of up to 25,000 MW of new hydropower capacity. According to Brazil's 10-year energy plan, the country will need to add 70 GW to its national grid by 2020. According to Business News Americas, 63 percent of that has already been contracted.
While the major markets for hydropower in Latin America may be Brazil, Chile and Colombia, the potential for growth is widespread.
"Latin America has very large hydropower potential," said Daniel Rubinstein, market manager in South America for ABB S.A. "Many countries rely heavily on hydropower for their electricity supply."
Paraguay, Venezuela, Peru, Bolivia, Ecuador, Panama, Haiti, Mexico, Costa Rica and Argentina are all looking to expand their use of hydropower.
A number of countries in Latin America have instituted government incentives to encourage the development of renewable energy such as hydropower. In 2011, Mexico expanded its 2008 Law on the Use of Renewable Energies and the Financing of the Energy Transition (LAERFTE) to include hydropower projects larger than 30 MW, under certain conditions, according to IHA. In 2009, hydro accounted for about 11 percent of Mexico's electricity generation, according to the U.S. Energy Information Administration.
In Venezuela, the Inter-American Development Bank loaned Venezuela 800 million for the Manuel Piar Hydroelectric Power Plant, also known as the Tocoma project. The 2,160 MW project is under construction in the Lower Caroni River Basin.
In April, Impsa installed the first of 10 Kaplan turbines at the Manuel Piar project, a 363-ton piece of equipment that will generate 232 MW. When complete, Impsa will have supplied 10 turbines and 10 generators for the project, which will be connected to the National Interconnected System.
Venezuela is also home to the world's third largest operating plant, the 10,200 MW Guri Hydroelectric Plant on the Caroni River. The project was completed in 1987 after being built in two stages, according to MWH, which provided engineering services.
Over the past 70 years, MWH has been involved with hundreds of projects throughout Latin America, totaling more than 30,000 MW of capacity. MWH's Targett said there is a confluence of activity making Latin America a particularly key geographic location.
"There is growing synergy among natural resources and wet infrastructure development in the region, particularly between mining, hydropower and water resources, that support this," he said.
For example, Targett said, Chile and Peru are both investing millions in the mining industry, with Chile investing around 100 million by 2020. He said mining developments require a substantial amount of power, energy and water supply and mining clients are investing in hydropower projects to meet the demands of both their operations and needs of nearby communities.
"These countries understand and support responsible private development as a key factor of the continued growth in the region," he added.
In Chile, the Chacayes project, commissioned in 2011, is the first of five planned projects in the same river basin that will generate a total of 600 MW, the first phase of PacificHydro's development in the Cachapoal Valley. With an investment of over 450 million, the Chacayes plant generates about 111 MW of installed capacity to Chile's grid.
In May, Energia Austral received environmental approval from the Environmental Evaluation Commission for the development of its 640 MW Cuervo project in Chile. The Cuervo project is the first of four projects Energia Austral will submit for environmental evaluation, which include three hydropower projects - the Cuervo, Blanco and Condor projects - and the transmission line needed to transport power to the Central Interconnected Grid in Chile. Energia Austral said it will submit the Blanco project next, which will have a total capacity of 375 MW. Once complete, the four projects are expected to generate about 1,000 MW, which is about 8.4 percent of the Central Interconnected Grid's installed capacity.
"We have worked to develop a sustainable project that will contribute clean energy from a renewable source, helping Chile meet its rapidly growing demand for energy, as well as delivering concrete benefits for the Ays'en Region by creating jobs and boosting tourism and the local economy in general," said Energ'ia Austral's general manager, Alberto Qui~nones.
Alstom, which has been working in the hydropower sector in Latin America for over 55 years, said it is receiving most of its new orders from this region of the world.
"This is a key area of development for Alstom and we are confident that we will have new opportunities and successful projects," said Marcos Costa, vice president of Renewable Power and Thermal Power for Alstom in Latin America.
Alstom is currently building its Global Technology Center for Latin America in Taubat'e, state of S~ao Paulo, Brazil. The new center will be in Alstom's largest hydro manufacturing facility in the world and will have the ability to produce electromechanical equipment for hydropower projects in not only Brazil but around the globe. The center will have a special focus on Kaplan power plants, which are designed for low-head applications typically between 15 meters and 55 meters with unit outputs ranging from 30 MW to 250 MW. In 2013, Alstom expects to complete a test stand for turbine models.
"The Brazilian center will be the first to have the complete hydro product technical expertise in a single location," said Costa, such as turbines, generators, governors, command and control, hydro mechanical and lifting equipment.
Alstom has also signed partnerships with two Brazilian universities, Unifei (Federal University of Itajub'a) and Unesp (State University of S~ao Paulo), for future funding of degree programs related to the hydropower market. Alstom will also build off the expertise from similar centers in France, India, Switzerland and Canada.
"Experts in Research and Development from France will work with the Brazilians in the first years of deployment," said Costa. "After this transition period, the intention is that the center will have only Brazilian professionals, promoting the national knowledge and investing in local growth."
ENHANCING EXISTING INFRASTRUCTURE
"We must not forget that, just as important as installing new capacity, maintaining the existing capacity is essential," said San Martin.
Voith Hydro's modernization and services division recognizes a trend in Brazil similar to what happened in the U.S. about 20 years ago, as the share of modernization projects significanly increased.
"The same will occur with other countries as their installed fleet ages," said San Martin. "Therefore, it is important to create specific public regulation that will support investors with such needs."
Sergio Parada, Andritz Hydro Brazil's President and CEO, agrees. He said the market in Brazil will be different than the past two years as more rehabilitation projects begin.
He said there will be fewer new hydro projects due to the lack of environmental licenses.
But Andritz is also focused on rehab work at existing stations. According to Andritz, almost 50 percent of the primary and secondary equipment installed in hydropower plants globally has been in operation for more than 30 years. The Andritz Hydro Rehab and Service division assists in the rehabilitation of older projects.
In Haiti, the IADB is investing in the refurbishment of the three-turbine, 54 MW Peligre project. In 2008, IADB approved a 12.5 million grant for the refurbishment of the plant, which generates about half of the electricity distributed by 'Electricit'e d'Ha"iti, Haiti's state-owned utility. According to IADB, the refurbishment program is being carried out over a five-year timeframe, totaling 40 million.
The first phase calls for the refurbishment of the first turbine and electric equipment. Phase two includes the refurbishment of the second turbine and the transmission line connecting the plant to Part-au-Prince, the capital of Haiti. The final turbine will be restored during the third and final phase of the program.
Due to the up-front costs of hydropower projects being traditionally larger than other forms of generation, Targett said one of the important aspects of hydropower projects is low operating costs, and their longevity while generating renewable energy.
"We're seeing projects nearing 100 years old that are still generating power," said Targett. "And the availability to rehabilitate projects not only adds to their lifecycle, but also continually helps reduce environmental impact and increase efficiency."
CHALLENGES TO OVERCOME
Hydropower projects have some impacts that must be mitigated, IHA said.
While this is a key challenge for hydro developments, the London-based association believes the full benefits of hydropower can only be achieved when hydropower is developed in a sustainable way, meeting the need to avoid, mitigate or adequately compensate for adverse impacts on local communities and environments. According to Targett, environmental and social considerations are the forefront of project development.
"Hydropower projects impact people, so private and government developers alike are focused on limiting these impacts," he said.
These issues are evident. In March, a federal judge in Brazil suspended the construction license for the Teles Pires project in the Amazon, citing violations of the rights of the Kayabi, Apiak'a and Mundurucu indigenous peoples.
The 1,820 MW project has been under construction since August 2011 and is one of six hydropower projects planned for the Teles Pires River.
In August 2011, Companhia Hidrel'etrica Teles Pires received the license for construction from the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA).
Companhia Hidrel'etrica Teles Pires is a made up of shareholders Neoenergia (50.1 percent), a holding of the Neoenergia Group; Eletrobras Eletrosul (24.5 percent), Eletrobras Furnas (24.5 percent) and Odebrecht Participac~oes e Investimentos (0.9 percent). At the time, the consortium said the Teles Pires project would include investments of R3.6 billion and would generate 17,000 new jobs.
In order to mitigate environmental impacts, Neoenergia said the Environmental Basic Project included 44 programs that addressed environmental, social, public health, education and other factors.
Brazilian Federal Judge Regina Ody Bernades in March said IBAMA failed to consult with affected indigenous communities, despite threats to their socioeconomic and cultural well-being, according to InternationalRivers.org.
Just weeks later, federal judge Olindo Menezes overturned the injuction to stop construction of the Telse Pires project, according to Agencia Brasil, a Brazil-based media outlet. As a result, the consortium said construction will resume at Teles Pires.
The project is expected to be completed in 2015.
Alstom is supplying the project with five 360 MW Francis turbines, regulators and associated hydro mechanical and lifting components.
The rotors of the five turbines will be the largest ever supplied by Alstom in Latin America.
A Brazilian court in April ruled that a work stoppage on the Belo Monte project is illegal.
Workers at the plant went on strike demanding higher pay and more time off, according to Sintrapav, or the Union of Heavy Construction Industry Workers. The court ruled the workers will be fine 106,000 per day if they do not return to work.
According to Business News Americas, the Brazilian government said delays on these key projects would threaten the power supply in Brazil.
"The situation is comfortable; there is no reason to be anxious. We are convinced that the energy demands of Brazil will be safely met," the federal mining and energy ministry's planning and development secretary Altino Ventura told Business News Americas.
In April, work resumed at both the Santo Antonio and Jirau sites after employees agreed to new wage deals.
"We must strike a balance with environmental and social issues, and this is being done with upmost responsibility," said San Martin.
Striking that balance is an important part of Voith's sustainability mission. San Martin said among Voith's 10,000 registered patents, and the 400 new patents the company files each year, are solutions tailored to address environmental issues.
"Such solutions should be promoted by regulatory agencies in order to speed up their use in the market," he said.
Targett added that numerous projects in the region have proven that responsible development can occur to the benefit of both the community and environment.
"When you are building a hydropower project you are building something that will benefit generations upon generations," said Targett. "And in Latin America, like the rest of the world, population growth and energy demands will continue to promote the need for long-term clean energy solutions."
