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Ruling Against Thermoelectric Plant Sparks Debate

Panoramic view of Totoral, in the Atacama Desert, which has won a legal battle against the Castilla thermoelectric power plant. Credit: Alex Fuentes/IPS

SANTIAGO, Sep 4 2012 (IPS) - A Chilean Supreme Court decision ordering a halt to the construction of the Castilla thermoelectric power plant has sparked a debate over the country’s energy security.

The authorities and some specialists claim that if projects of this size are not allowed to go through, national development will be hindered.

However, according to Lucio Cuenca, the director of the Latin American Observatory of Environmental Conflicts (OLCA), “This is unfounded political pressure, it is blackmail. The daily energy consumption of Chilean citizens is not threatened by whether or not the Castilla thermoelectric plant is built.”

The project is being undertaken by the energy company MPX, a subsidiary of the EPX Group owned by Brazilian billionaire Eike Batista. Located 810 km north of Santiago in the Atacama Desert and on the Pacific coast, the Castilla complex would be the largest thermal power generation facility in South America.

The 4.4-billion-dollar project comprises eight thermoelectric plants: six coal-fired plants that would produce 300 MW of electricity each, and two run on oil with an individual capacity of around 127 MW.

As a whole, the complex would contribute an additional 2,100 MW of power to the Central Interconnected System, which supplies electricity to 90 percent of the Chilean population

But on Aug. 28, the Supreme Court ordered a halt to construction on the project, in response to a request for an injunction filed by the local residents and fisherfolk of Totoral, the town closest to the plant, which had already been partially accepted by an appeals court.

The unanimous ruling established that MPX and its German partner could not present separate environmental impact evaluations for each component of the project, namely the thermoelectric complex and the port where the coal and oil imported to feed the generators would be unloaded.

According to the Court’s ruling, “the primary customer and purpose of the port is to supply the thermoelectric plant, and the latter needs to be supplied with the coal and diesel oil transported through the port, which means that there are clearly three units for a single activity, that is: the port, the plant and the connection between the two.”

The Supreme Court concluded that, in order to move forward, the companies must present a new environmental impact assessment “that considers the two projects together as well as the connection between them for the transfer of the coal and diesel oil, as applicable, from the first to the second.”

After the Supreme Court decision was announced, MPX stated it in a press release that it “will reassess its Business Plan for the Chilean project.”

This declaration sparked an immediate reaction from the government.

Minister of Mining Hernán de Solminihac warned that by 2020, copper mining will demand 97 percent more electricity than it consumed in 2011.

Along the same lines, economist Jorge Rodríguez Grossi told Tierramérica* that the rejection of Castilla and other energy projects “threatens the process of economic growth.”

Rodríguez Grossi, who was the energy minister during the Ricardo Lagos administration (2000-2006), added that the country’s environmental legislation and its stipulations are “an own goal that we are scoring against ourselves from an economic point of view.”

“All Chileans want to grow sustainably in environmental terms, but we don’t want to delay growth by 10 or 15 years for respecting the environment,” he claimed.

“It is up to the government to provide investors with clear and completely proven guidelines for the correct way to evaluate a project,” he added.

In his opinion, “for a new project to appear and pass through the environmental filters again, it will take two or three years,” which could, in turn, slow down investments in mining.

But as far as environmentalist Cuenca is concerned, this is “an artificially constructed argument aimed at promoting the continuation of a mistaken strategy for development,” which would not hold weight “if it weren’t for the uncontrolled expansion of mining investment.”

Chile is the world’s largest producer of copper. Its current installed capacity for electricity generation is 17,000 MW. In 2011, its consumption was just over 6,000 MW, said Cuenca, which means there is a wide margin to meet new demands in the short and medium term.

But the distribution of electricity is uneven: 74 percent of the installed capacity is in the Central Interconnected System, 25 percent is in the Great North Interconnected System, and less than one percent is in the medium-sized networks of the southern regions of Aysén and Magallanes.

It is precisely in the north where mining activity is concentrated. The region currently consumes a third of the electricity produced in Chile, with significant growth forecasted.

Thermal power generation, which is highly polluting, accounts for 63 percent of electricity production, while hydro power contributes 34 percent. The remaining three percent comes from non-conventional renewable sources.

The spokesman for the residents of Totoral, Juan Carlos Morales, told Tierramérica that “thermoelectric power is on the downturn worldwide, because new generation methods are being used. And it is mega-mining that is increasing the demand for energy and leaving us without water and with severe pollution because of the tailings deposits.”

For Morales, the Supreme Court ruling came as a surprise. “We are surprised that in Chile our arguments have been respected, that justice has managed to prevail despite all of the pressures,” he said.

* This story was originally published by Latin American newspapers that are part of the Tierramérica network. Tierramérica is a specialised news service produced by IPS with the backing of the United Nations Development Programme, United Nations Environment Programme and the World Bank.

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