Climate and Energy

Chinese energy project stalls while awaiting approval

Agency in charge says it will follow legal procedures

The Brazilian Institute of the Environment and Renewable Natural Resources (IBAMA) has until April 7 to express its opinion about the environmental viability of an energy transmission line from the Belo Monte hydro plant.

Agency told Diálogo Chino that it could extend this period if any parties impacted by this project feel they are facing harm as a result of its construction.

This means that pressure from the Chinese State Grid company, Xingu River Transmitting Power consortium (XRTE), applied during the last week of December had no effect; the company had contacted Brazilian authorities asking them to intervene with IBAMA to accelerate the environmental licensing process.

Cai Hongxian, president and director of the consortium, the concession holder belonging to State Grid, sent a letter to Brazilian authorities asking them to pressure IBAMA to grant the environmental licence.

Without authorisation from the environmental agency, work cannot begin on the transmission line project (known locally as the Linhão), which will extend 2,700 kilometres. The project, which is estimated to cost US$ 2.2 billion, must be completed by December 2019 so that the energy produced by the Xingu River plant can be connected to the Brazilian National Interconnected System. From there, the electricity will be distributed to the states of Pará, Tocantins, Goiás, Minas Gerais, and Rio de Janeiro.

According to the newspaper O Estado de S. Paulo, the Ministry of Mines and Energy (MME) responded to State Grid’s request in a written statement saying that it “respects the role of each public agency and their competencies in licensing.”

The statement, however, left a loophole for government action by stating that the ministry “will continue, according to its duties, to work with government agencies to issue the licenses, highlighting the importance of this project to the Brazilian electricity sector.”

The Brazilian National Electric Energy Agency (ANEEL) was more emphatic in rejecting State Grid’s request for help. The agency responsible for regulating the Brazilian electric sector responded (also in a written statement) that “it is clear that it is entirely up to the transmitting company to take the measures necessary for construction, operation, and maintenance of the facilities.”

In order to pressure the Brazilian authorities, Cai Hongxian even “reminded” Minister of Mines and Energy Fernando Coelho Filho that the State Grid project will provide 65% of the funding for the project, which will generate around 15,000 direct jobs in the next two years.

IBAMA denies that the licence is delayed, in contrast with the statement by the State Grid. “The EIA/RIMA is under review and there is no incompatibility with the legal deadlines,” IBAMA said in a statement, adding: “If supplementary studies are requested, the deadline will be suspended until the applicant complies in full.”

The agency has scheduled the tenth public hearing for January 30 to present the environmental impact study and report (EIA/RIMA) for the Xingu-Rio transmission system to the communities in the 78 municipalities which will be impacted by the lines and facilities.

The Xingu River Transmitting Power consortium (XRTE) say that exchanges of ‘correspondence between the concession holder and regulatory agencies as MME, ANEEL and ONS (the National System Operator) are frequent and report the progress in all stages of the process, including environmental licensing.

State Grid will have an annual revenue of more than US$ 300 million annually for construction and future operation of the transmission line from the Belo Monte plant over the next 30 years (concession period).