Itaipú Dam, located on the border between Brazil and Paraguay, is the world’s largest hydroelectric dam in terms of energy generation. Last year it broke the world record by producing more than 100,000 gigawatt hours of electricity.
Ownership of the generated hydroelectric power is split evenly in a binational treaty between Brazil and Paraguay. Paraguay uses only 13 percent of its half to meet more than 85 percent of its energy needs, and sells the rest to Brazil.
This arrangement, however, will not work much longer. Paraguay’s energy demand is steadily increasing and its power-sharing agreement with Brazil expires in 2023.
Dr. Christine Folch, assistant professor of cultural anthropology and environmental science and policy at Duke University, is leading a team of Duke students and researchers, in joint work with Paraguayan researchers, to develop policy recommendations on how to best harness Itaipú and future renewable energy projects to build sustainable development for Paraguay.
The fact that Brazil has a buyer’s monopoly leaves Paraguay vulnerable, Folch said.
“Paraguay assumes that in 2023, Brazil will buy its energy at the same price, but we know that they are building more power plants on the borders with Peru and Bolivia,” she said. “It’s not that Brazil can dispense with the energy of Itaipú, but it will have more options and can therefore lower the price.”
Paraguay should take advantage of one of the points included in the 2009 agreement and analyze the possibility of turning its National Electricity Administration (ANDE) into an international company before 2023, Folch said.
“The question we ask ourselves is how to better use Itaipú's financial resources, how to rethink them, and how to invest in something that will have positive externalities and long-term effects,” Folch said.
Odette Rouvet MIDP’18 and Rotary Peace Fellow, is one of five Duke students on the team. Before joining MIDP, she worked for the United Nations Environment Programme in Mexico and France, where she promoted international cooperation programs to promote sustainable development.
“This opportunity opens up the space to not only improve the governance structure of Paraguay’s biggest financial asset, but also to introduce, through policies, innovative ways to reshape the economic model for sustainability and social inclusion,” she said.