RALEIGH, North Carolina — Paraguay is one of only two landlocked countries in South America. Adding to this misfortune is the fact that it does not have much by the way of mineral or oil reserves. But, there is one natural resource that the nation has an abundance of — hydroelectric power potential. In fact, Paraguay has long produced more than enough hydroelectric power for its own needs, exporting the remainder to neighbors Brazil and Argentina. In 2019, Paraguay’s generated 6% of its GDP from the exportation of 64% of its power production. Renewable energy in Paraguay has the potential to transform the nation.
Itaipú Dam: A Hydroelectric Behemoth
Renewable energy in Paraguay centers around three large hydroelectric power plants: Itaipú, Yacyretá and Acaray. Itaipú began operating in 1984 as not just the largest of the three plants but one of the largest power plants in the world, both physically and in terms of power capacity. The dam, which sits on the Brazil-Paraguay border spanning the Paraná River, even set the record for power output in a single year, generating 103,098,366 MWh in 2016.
The Itaipú Dam is a joint venture between Paraguay and Brazil. The two countries jointly own and manage the dam, and from the beginning, it was clear that Paraguay’s share of power production would far exceed its need. Paraguay, therefore, signed a 50-year agreement under the 1973 Treaty of Itaipú to sell its excess power to Brazil. Paraguay eventually came to believe that the agreement was unfair. The agreement was renegotiated in 2009 to give Paraguay more favorable terms.
Untapped Hydropower, Yet a Need to Diversify
Itaipú alone represents 79% of the total power capacity of Paraguay. On the whole, hydroelectric power constitutes 99.5% of Paraguay’s power capacity. This makes renewable energy in Paraguay a standout globally. Not only is Paraguay able to generate all its electricity needs from renewable energy but almost all of it stems from a singular source of energy, hydroelectric power. As remarkable is the fact that Paraguay has an undeveloped hydrologic capacity that the nation can use to meet its growing energy needs in the future. Between 2001-2019, Paraguay’s total “electricity consumption grew 15.8% annually.”
Recent extended dry periods — the result, many believe, due to changes in the climate — make clear that an overdependence on hydroelectric power could be risky. The country plans to utilize a mix of renewable energy sources going forward to diversify its energy mix and increase its energy security. While scarcely existent today, Paraguay hopes to develop more solar and wind power projects in the future.
The country also has a sizable biofuels industry that produces about 7% of its road transport energy needs in the form of ethanol and biodiesel. A clear upside to this industry is that it employs many farmers (corn, sugarcane and soybean) and plant workers. However, some dispute whether these fuel sources are indeed sustainable and environmentally friendly.
Renewable energy in Paraguay is so abundant that the nation has nearly realized U.N. Sustainable Development Goal 7 (SDG 7) — ensuring “access to affordable, reliable, sustainable and modern energy for all.” Recording 99.95% electricity access at the close of 2019, Paraguay enjoys nearly universal access to electricity. In some remote locations, including the Chaco region of the country, inhabited by Indigenous Paraguayans, Paraguay utilizes solar plants to meet electricity needs.
Additionally, thanks to an overabundance of hydroelectric power in combination with subsidies for low-volume energy users (0-300 kWh per month), citizens of Paraguay also enjoyed the most affordable power rates in Latin America in 2018.
In Paraguay, even though most households have access to electricity, many do not have the means to cook with electricity (or with gas), and instead, must use wood or charcoal for cooking. When used indoors, these heat sources present health risks. They also often result in women and kids spending much of their time gathering these resources. This makes clear that merely having access to electricity is not enough to break the cycle of poverty. People also need electric tools and appliances to help them utilize electricity in a manner that betters their lives.
Renewable energy in Paraguay brings the nation closer to achieving not just SDG 7 but also SDG 5 — gender equality. Electricity access frees up significant time for girls and women. Instead of spending hours each day collecting fuel and building fires, females can allocate this time toward more productive activities, such as paid employment and education, enabling them to move out of the depths of poverty.
– Jeramiah Jodan