Latin America’s hydro power bet suffers effects of climate change

It was Ecuador’s biggest-ever energy project, capable of powering every home in the country, gushed then-president Rafael Correa as he inaugurated the Chinese-built $2.2bn Coca Codo Sinclair hydroelectric dam in November 2016. 

The dam was one of eight planned by Correa, a leftwing populist, as he pushed for his nation to generate as much as 90 per cent of its electricity from hydro power, using billions of dollars of loans and construction expertise provided by Beijing.

Less than a decade later, that bet has gone disastrously wrong. Ecuador is experiencing power cuts of up to 14 hours a day as the government rations scarce electricity because unusually dry weather has left its hydro dams short of water. 

“There’s a huge deficit of around 1,000 megawatts of energy,” says Nicolás Mongardini, a Miami-based entrepreneur who has just visited his parents in Ecuador.

“Part of that is because of El Niño [the climate phenomenon] and the huge drought season that has struck Ecuador in the past months,” he says. “There’s a lot of water missing from the rivers and that is affecting hydroelectric power production. It started with eight-hour power cuts, then it went to 10, and now it’s 14, depending on the region.”

Ecuador’s hydropower plants have also been tarnished by construction faults. US army engineers have been called in to advise on how to save Coca Codo Sinclair from river erosion and a build-up of sediment that threaten its ability to generate power. In the meantime, the plant is running at around 30 per cent of capacity.

Neighbouring Colombia and Peru are facing drought-related problems with hydroelectric generation, as well, though not on the scale of Ecuador, which relies on water power for about 75 per cent of its electricity.

“Hydro power was the low-hanging fruit in terms of electricity development options, particularly in the Andes,” says David Purkey, Latin America regional director for the Stockholm Environment Institute, a research organisation. “It was the obvious choice — there was lots of water and lots of elevation loss which you could use to generate electricity.”

But, he adds, “anybody who was relying on water resources and the stability of water resources . . . got tricked by climate change”.

Hydro power was the low-hanging fruit in terms of electricity development . . . the obvious choice

During the 20th century, Latin America seemed the ideal location for generating hydroelectric power. The continent harbours 31 per cent of the world’s fresh water in its rivers, lakes and glaciers, and has large tracts of uninhabited land that could be flooded for dams.

Multilateral development banks and governments provided assistance for a huge programme of hydroelectric plant-building between the 1970s and 1990s. Today, the region generates around 45 per cent of its electricity — some 200 gigawatts — from hydro, giving it one of the world’s greenest grids.

But rising global temperatures, sharply fluctuating rainfall patterns, melting glaciers, and the increasing frequency of droughts and floods are playing havoc with power generation.

Making matters worse, more recently built dams tend to have smaller reservoirs because of environmental pressure to flood less land, meaning they are much more vulnerable to fluctuating rainfall than older projects, experts say.

The International Energy Agency warned in a report in 2021 that Latin America’s average hydropower capacity could fall by as much as 10 per cent in the decades to 2060 as a result of the changing climate.

Further complicating matters for energy grid planners, the IEA said the effects of climate change would not be spread evenly across the region. Some plants, such as those in Mexico and Central America, would be much more exposed than others. In Ecuador, many of the new dams built by the Correa administration were located in the same water basin, increasing their vulnerability in the event of drought.

Ecuador’s long power cuts have hurt businesses, made life miserable for residents, and are complicating the electoral chances of incumbent President Daniel Noboa in February. He faces an opponent backed by Correa, who fled the country before being convicted of corruption and now lives in Belgium.

Noboa has slashed taxes on imports of diesel-powered generators and batteries, created new incentives for the private sector to invest in energy projects, and has even drafted in a Turkish barge to generate emergency power. But he faces criticism for not acting sooner to preserve dam water levels to mitigate the crisis.

Arturo Alarcón, a senior energy specialist at the Inter-American Development Bank in Washington, says Latin America needs to deal with the climate threat to its hydro dams by broadening its energy mix, while keeping carbon emissions as low as possible.

This would mean more solar and wind power generation and balancing the management of the power grid by cutting back on electricity generation from large dams during sunny or windy days, to conserve the water for use in cloudier or stiller periods.

Building more interconnectors between national grids could also help ensure greater resilience, although this is not a guaranteed solution.

Colombia recently refused to sell Ecuador power through their shared connection because it wanted to conserve power in its own dams, which were running short.

Although climate change is making it harder to guarantee the reliable production of green electricity, hydropower will remain a big part of the solution to Latin America’s power needs, Alarcón says.

“We have 200 gigawatts of hydroelectric power in the system,” he explains. “We can’t just substitute that with other sources. You have to keep them working . . . and diversify your energy mix.”