Paraguay and biomass
Paraguay, located in the heart of South America, has a distinctive energy landscape characterized by its significant reliance on renewable sources, particularly hydropower and biomass. Historically, biomass has been a primary energy source, with firewood accounting for a substantial portion of energy consumption well into the mid-1980s. Today, hydropower represents the largest share of the country's energy supply, with the Itaipú Hydroelectric Power Plant—one of the largest in the world—producing the majority of Paraguay's electricity, which is largely exported to neighboring countries like Brazil and Argentina.
Despite its rich hydroelectric potential, Paraguay lacks substantial reserves of fossil fuels, relying instead on biomass and hydropower for its energy needs. The country has also begun to explore other renewable energy sources, such as solar and wind, to enhance rural electrification for its population, of which a significant percentage lives in rural areas. Additionally, the government has taken steps to promote biofuels, including ethanol production from sugarcane, in response to fluctuating oil prices. Paraguay's energy development reflects both its natural resources and the challenges of modern energy needs, creating a unique case study in renewable energy utilization.
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Paraguay and biomass
Official Name: Republic of Paraguay.
Summary: Paraguay is a unique case in the world of energy in two ways: First, most of its total primary energy supply comes from renewable sources (hydropower and biomass); second, most generated electricity is not domestically consumed but is exported to the neighboring countries of Argentina and Brazil.
Situated in the heart of South America, at the confluence of large, mighty rivers, Paraguay has enormous hydroelectric potential. The country has no coal, oil, or natural gas reserves, though there are signs of modest oil and natural gas reserves in the region bordering with Bolivia and Argentina.
Throughout the 19th and most of the 20th centuries, Paraguay’s main primary energy source was biomass in the form of firewood; that biomass still accounted for 64 percent of total energy consumption in the mid-1980s. Compared to its neighbors, electrification began in Paraguay relatively late. In 1910, the first power plant was installed in Asunción, the country’s capital city, to supply electricity for public illumination and streetcars. Power supply to industries and households began a few years later through concessions granted to private investors. In 1947, the Paraguayan government decreed the nationalization of the main power utility, the Compañía Americana de Luz y Tracción (CALT), until then in hands of Swiss and Argentinean investors; one year later, the Administración Nacional de Energía (ANDE) was created as an independent state entity with its own legal identity. In 1964, ANDE was reorganized as an autonomous, decentralized public utility, which has monopolized the Paraguayan electricity sector since then.
Serious efforts at electrification beyond major cities began during the 1960s. The first major hydroelectric power plant in Paraguay, the 190-megawatt Aracay plant, was put in service in 1969. The Aracay plant allowed the country to break its dependence on oil for power generation; for almost 15 years, it was Paraguay’s main power supply. In 1977, the 103-megawatt Yguazú hydroelectric plant entered into service, increasing hydro-generation capacity by a third.
However, the most important hydroelectric project in Paraguay is the 14-gigawatt (installed generation capacity) Itaipú power plant on the Paraná River, which is on the border between Brazil and Paraguay. The Itaipú Hydroelectric Power Plant is operated by Itaipú Binacional, a joint consortium between the Paraguayan ANDE and the Brazilian Furnas Centrais Elétricas S.A. Negotiations between both countries for exploiting the enormous hydroelectric potential of the Paraná River began in the 1960s. In 1970, feasibility studies were conducted, and construction began three years later. Operations started on May 5, 1984, with three generation units; additional units were installed over the next seven years, bringing the total to 18 with a total installed capacity of 12.6 gigawatts by 1991. At that point, Itaipú surpassed the Venezuelan 10-gigawatts Guri Power Plant as the world’s largest power plant.
In the 2000s, two additional units were put in operation at Itaipú, for a total of twenty units, increasing installed capacity to 14 gigawatts. In 2006, Itaipú was displaced as the largest power dam in the world, based on installed capacity, by China’s Three Gorges Power Plant, although Itaipú remained the first in terms of electricity-generating power; it generated 83,800 gigawatt-hours in 2023. In 2009, a storm caused damage to three transmission lines that transported electricity from Itaipú to consumption centers, causing a blackout in 10 Brazilian states and Paraguay. In 2023, Itaipú’s generated electricity covered about 90 percent of electricity consumption in Paraguay and about 10 percent of Brazilian electricity consumption. In 2016 Itaipú became the first hydroelectric dam to generate more than 100,000 gigawatt-hours of electricity per year, generating 103,100 GWh.
Downstream from Itaipú, also at the Paraná River, is the Paraguayan-Argentinean Yacyretá Power Plant, with an installed capacity of 1.5 gigawatts. In 1973, Argentina and Paraguay signed an agreement for jointly completing the project; building began in 1983 and commercial operations in 1998. Yacyretá is operated by the Entidad Binacional Yacyretá (EBY), a consortium equally owned by ANDE and the Argentinean Energéticos Binacionales S.A, or EBISA (formerly Agua y Energía Eléctrica). The Yacyretá Dam has been plagued by corruption scandals, and several EBY employees have been convicted for corruption; the company itself has been taken to the Inter-American Court of Human Rights for violation of the human rights of settlers from the region where the power plant is located.
As of the early 2020s, there were plans to build another Argentinean-Paraguayan hydroelectric power plant, situated between Itaipú and Yacyretá, the Corpus Christi Power Plant. Corpus Christi would have an installed capacity of 2,880 megawatts; however, the plan has encountered strong resistance among inhabitants of the region where the plant would be built, and its construction has been delayed. As of 2024, it has a planned completion date of 2033.
In 2021, total generated electricity in Paraguay amounted to 40,576 gigawatt-hours. All of the domestic primary electricity supply in Paraguay was provided by hydropower. Hydropower accounted for 37.5 percent of the nation's total energy supply in 2021, followed by biomass (firewood, farm and forest waste, and other biomass) at 32.6 percent. Oil made up 29.9 percent of its energy supply and was used almost exclusively for transport. Import of all fossil fuels and its distribution in the retail market were exclusively in the hands of the state-owned Petróleos Paraguayos (PETROPAR). Since 1989, PETROPAR has distilled ethanol from sugarcane, which since 2005 has gained importance in the domestic market as a result of higher oil prices. Since 2005, a law has regulated the introduction of biofuels such as ethanol and biodiesel.
The government is also studying the introduction of other renewable energy sources for rural electrification, as about 37 percent of the Paraguayan population lived in rural areas (2023). These sources would mainly involve minihydroelectric plants, solar photovoltaics, and wind energy.
Bibliography
“Dam Failure Triggers Huge Blackout in Brazil.” CNN, 11 Nov. 2009, edition.cnn.com/2009/WORLD/americas/11/10/brazil.blackout/index.html. Accessed 7 Aug. 2024.
"Integration That Generates Energy and Development," Itaipú Binacional, 2024, itaipu.energy/. Accessed 7 Aug. 2024.
"Paraguay." CIA World Factbook, 31 July 2024, www.cia.gov/the-world-factbook/countries/paraguay/. Accessed 7 Aug. 2024.
"Paraguay." International Energy Agency, 2024, www.iea.org/countries/paraguay. Accessed 7 Aug. 2024.