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Endowed with hydroelectric potential estimated at 255 million kilowatts (the world's highest), and lacking significant deposits of thermal coal (and, until recent discoveries, of petroleum), Brazil had invested heavily in the planning and building of dams to satisfy the power requirements of a rapidly growing economy. The first hydroelectric power plant began operations in 1889, generating 250 kilowatts, only half of the thermally generated power. One century later, the proportion had become impressively different: 45,871,000 kilowatts of hydroelectricity to 7,295,000 kilowatts of thermoelectricity, a ratio of 6.28 to 1.
In 1962, the installed capacity for electric power in Brazil was 5.8 million kilowatts. This increased to 6.8 million kilowatts in 1964, 17.6 million in 1974 and in 1985, the installed capacity (with only eight turbines in full-time operation at the Itaipu hydroelectric complex) was 37.3 million kilowatts. The Itaipu power plant, the biggest hydroelectric plant in the world, is located on the Paraná River on the Paraguay-Brazil frontier, not far from Iguaçú Falls. It is a bilateral project between the governments of Paraguay and Brazil. The Itaipu Treaty was signed in 1966. Construction began in the mid 1970's and by 1985 three of the 18 turbo generators (of 700 megawatts each) had already started operation. Now, with all 18 turbo generators functioning, power production from Itaipu is 12.6 million kilowatts divided equally between Brazil and Paraguay. The project has far-reaching effects on the future of the whole of Paraguay's territory and on the southeast, west central, and south of Brazil.
The Tucuruí Dam, built in the southeast of the Amazon basin, has added 3.9 million kilowatts to Brazil's generating capacity and is projected to add 7.7 million kilowatts when the project is completed. In 1996, 92 percent of all the electric power generation was hydroelectric and the remainder was thermal and geothermal. The national power system is composed of two interconnected grids, one for the north and northwest and the other for the south, southeast and central west. Total hydropower potential amounts to 259.7 gigawatts, of which only 25 percent has been tapped or will have been once the power plants currently under construction are finished. Privatizing generation and distribution, liberalizing grid access, and permiting large consumers to choose their energy suppliers are all expected to increase the development of the vast potential of the Brazilian electricity sector in the near future.
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