Latin American Land Owners Are Fighting to Keep Power Lines Out

(Bloomberg) -- Gilson Denardin always hated the towering transmission lines crisscrossing his farm in northeastern Brazil. So when he caught wind of plans to put up two more sets of wires, he decided to put up a fight.

“It’s awful,” said the owner of 7,400 acres of farmland in Brazil's Northeast. “My land loses its value with so many power lines.”

Denardin is leading a local movement to force power companies to pay farmers more for their trouble, and he's not alone in raising a stink. At the end of the last century, before the commodities boom brought a wave of development to Latin America, opposition to the blight of new electricity infrastructure was rare. People just wanted the energy. Now that 100 percent of the region’s biggest economies have access to power, the “Not in my backyard” movement—or Nimby’ism—that has long been the norm from Europe to the U.S. is creeping in here, too.

More and more, land owners from the countryside of Brazil to resort towns in Mexico are protesting further development of energy infrastructure. Separated by thousands of miles, their complaints are usually the same: power plants and transmission lines disturb the skyline, reduce the value of properties and make it harder to harvest land. And the financial compensation for their trouble?

“Puny,” the 54-year-old Denardin said of the one-time payment of 1 real (28 cents) per square meter that power companies paid him in the past.

The cost to Latin American power companies and the region’s economies is anything but small. While access to power has improved, that doesn’t mean everyone has all the energy they need. Power shortages in Brazil have proven to be a particularly heavy burden for industrial clients like carmakers and steel producers, whose power costs can be as much as 45 percent more expensive than the global average, according to Rio de Janeiro’s Industry Federation. And while Mexico’s economy relies heavily on manufacturing, per-capita consumption is just a fraction of its northern neighbor.

“Brazil is a country under construction—it’s not like in Europe,” said Mario Miranda, president of the association of power transmission companies. “For our GDP to grow 1 percentage point, our power generation must grow 20 percent.”

That’s the major impetus behind major government efforts to bolster both energy output and transmission lines. Brazil last year auctioned off the rights to build 12,400 kilometers (7,700 miles) of cables and is planning two more sales this year. Mexico, which only opened up its energy and electricity markets to private investment in 2014, has plans to boost wind-generation capacity on the Yucatan Peninsula, a favorite destination for tourists, by 15-fold through 2020. And Argentina is also ramping up renewable-energy production with 10 gigawatts of new wind farms—equal to about 10 nuclear power plants—by 2025.

As the expansions gain steam, so do the Nimby movements. Denardin is organizing with neighboring farms to refuse access to their land unless they are better compensated. Mexican resort owners and tourist associations are adding their voice to environmental groups who in the past have successfully petitioned regulators to deny project permits.

In Mexico, people complain about wind parks along the coast because “it gets ugly,” said Leopoldo Rodriguez, president of the Mexican Wind Energy Association. “The industry has to work on communicating with local communities to show the development that energy brings.”

Nimby is a relatively new phenomenon in the region, and previous opposition mainly focused on environmental grounds (Hollywood director James Cameron famously protested this Amazon mega-dam), rather than the aesthetics.

For tips on how to deal with the shifting demands, Latin American power companies can look to their U.S. counterparts. Columbus, Ohio-based American Electric Power Co., the largest operator of transmission lines in the U.S., has a team of more than 200 employees that focuses on appeasing landowners.

“Increasingly, people want to be included in the process of building new infrastructure,” said Todd Burns, director of transmission project outreach. “It’s not like a road, where you experience heavy traffic and realize it’s necessary to build more roads. Power is invisible.”

Companies in Brazil and Mexico will all have to step up efforts to keep people happy. Landowners like Denardin are a good place to start. The grower of corn and cotton said he’s unlikely to approve plans to install more transmission lines across his property unless he gets rent for the space rather than a one-time fee.

“One of the companies is threatening to sue me,” he said. “I don’t care.”

The following photos show electrical transmission infrastructure on private farmland in Santa Maria, Bahia state, Brazil by Dado Galdieri, and wind farms in the popular tourist destination Dzilam de Bravo, Yucatan state, Mexico by Brett Gundlock.

 

©2018 Bloomberg L.P.

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