- Development & Aid
- Economy & Trade
- Human Rights
- Global Governance
- Civil Society
Thursday, March 23, 2017
- Diversifying the energy mix and the spectre of energy shortages in Chile are central issues in the campaign for the primary elections this Sunday Jun. 30, when presidential candidates will be nominated for the Nov. 17 elections.
Particularly controversial is the HidroAysén project, which aims to build five large hydropower plants on the Baker and Pascua rivers, 1,600 kilometres south of Santiago, in Chile’s Patagonia wilderness region.
This is the most controversial project in recent years, raising hackles among local people and environmental activists on the one hand, while being presented as a concrete solution to the energy crisis forecast for the coming decade by its proponents, on the other.
Centre-left presidential hopeful and former president Michelle Bachelet (2006-2010), who is in the lead in voter intention polls, said on Jun. 23 that “HidroAysén is not viable, so in my view it should not go forward.”
Potential centre-right presidential candidate Andrés Allamand, of National Renewal (RN – Renovación Nacional), agreed that the project “is dead.”
HidroAysén, owned by Colbún, a company controlled by the Chilean consortium Matte and the European firm Endesa-Enel, is designed to occupy an area of 5,910 hectares.
Its power plants would have a planned total capacity of 2,750 MW for the country’s central grid, which supplies electricity to 90 percent of the country’s 17 million people.
The proposed investment is about 3.2 billion dollars and includes a transmission line 1,912 km long – the longest in the world – from the city of Cochrane in Patagonia to Santiago.
According to environmentalists, the area where the HidroAysén complex is to be built is a natural heritage of humanity site because of its wealth of biodiversity, and it is one of the greatest fresh water reserves on the planet.
“We oppose the hydropower megaprojects, not only for numerous environmental reasons, but also because of the tremendous social harm they will do,” activist Patricio Rodrigo, executive secretary of the Patagonia Defence Council, a coalition of community groups which mobilised 120,000 people in a march against HidroAysén in 2011, told IPS.
“Chile and the world are changing,” Rodrigo said. “We see what is happening in Brazil. The companies will have to adjust to developing projects that are consistent with society’s goals, and not impose aims that the citizens do not agree with.”
But Daniel Fernández, the executive vicepresident of HidroAysén, warned that the country was courting an energy crisis in the future on a scale “much greater” than this project.
Chile has an installed capacity of 17,000 MW, 74 percent in the central grid, 25 percent in the northern grid, and the rest in medium-sized grids in the southern regions of Aysén and Magallanes.
There are nearly 40 hydropower stations in the country, and 10 projects are in the stage of environmental assessment.
However, only 40 percent of the energy mix is provided by hydropower. The rest is supplied by thermal power stations burning polluting fossil fuels, 97 percent of which have to be imported.
Due to the shortage of energy sources, the cost of production per MW/hour in Chile is one of the highest in Latin America, at over 160 dollars, compared to 55 dollars in Peru, 40 dollars in Colombia and 10 dollars in Argentina, Fernández said.
According to the National Energy Commission, an additional 7,000 to 8,000 MW need to be generated over the next few years, and by around 2030, demand will have tripled, Fernández said.
The HidroAysén project was approved in May 2011, and is awaiting a decision about its future by the Council of Ministers for Sustainability, which is reviewing 38 appeals received by the Environmental Assessment Service.
Fernández said: “No human intervention, least of all an energy project, can avoid some environmental impact.” He added that at the moment there is no other project that will produce as much energy as HidroAysén, with less impact.
He told IPS that the delay by the Council of Ministers in deciding the future of the project was “a blow to the country’s environmental institutions,” and he called on the political system to establish a “state energy policy” so that investors can “know what to expect.”
“If the message Chile sends is that there is uncertainty over project approval, a risk of getting endlessly bogged down in the courts, and un-met deadlines, then we are not attractive to investors,” Fernández said.
“There are already some investors who no longer want to invest in Chile,” he said, adding that “it is a legal and administrative obligation” for the government of rightwing President Sebastián Piñera to make its position clear on the future of HidroAysén.
In Rodrigo’s view, the threats of an energy crisis and investor flight are part of “a terror campaign on the part of the electricity monopoly,” made up of Endesa, Colbún and Gener.
He maintained that in this South American country “there are enough energy projects to avert any crisis.”
Morevoer, he repudiated the bill on electricity concessions presently before parliament, which it is said will grant concessions in perpetuity to the electricity companies.
When it comes to the positions of Bachelet and other candidates, Rodrigo said: “the former president is listening to the voice of the people.”
“There is consensus among political leaders that Patagonia is more valuable, from the environmental, social and economic point of view, as natural heritage than if it is filled with dams,” he said.
Fernández, on the other hand, believes that Chile’s energy problem is so vast “that to oppose Hidroaysén is a reductionist stance.”