Feature: Insufficient project pipeline may trigger energy crisis in Chile

By the Potencia correspondent

The growth in electricity demand in Chile is one of the fastest in Latin America. According to figures from CNE, the national energy commission, the country will need an additional 2700 MW by 2020 to meet this demand. However, there is growing concern that the projects currently underway will not be enough to meet demand.

This is according to Chilean daily La Tercera, which quoted sources from Colbun, one of the country’s key utilities.

Colbun predicts that in the coming six years it will become ever more challenging to satisfy the country’s demand for electricity.

The CNE said that demand will grow at a yearly rate of 5.3 per cent, which means an increase from today’s production of 48,700 GWh to an expected 70,300 GWh by 2020.

However, projects that are currently being implemented will add 14,500 GWh.

Colbun’s general manager Ignacio Cruz believes that the growth of energy demand should be met by competitively-priced renewable energy sources.

However, it is more likely that energy production will continue to be based on fossil fuels, which will bring “extremely high prices and cause pollution”. Cruz adds that such a situation will make Chile less competitiveness.

Cruz said legal challenges are stifling energy plans. At present there are several projects awaiting a court decision on whether they can proceed. They represent a capacity of 8500 MW.

To avoid such setbacks Cruz recommend that companies work closely with the people and communities that will be impacted by the construction of the power plant.

That is exactly what Colbun did to enable the construction of Angostura hydropower station to go ahead. The hydroelectric facility is scheduled to be operational in late 2013 and will add 316 MW to Chile’s Central Interconnected System (SIC).

Colbun is due to providing approximately 30 per cent of the country’s energy needs between 2014 and 2020. This will be achieved via a new coal-fired plant that is expected to add 517 MW and be operating by 2018, according to the CNE.

The project is the second unit at the Santa Maria thermoelectric station. Its first unit produces 342 MW.

But Chile’s most ambitious project is HidroAysen, jointly owned by Colbàƒºn and Endesa of Spain. This $3.2 billion project includes the construction of five dams in the south of the country, 1800 km from capital Santiago.

Once operational HidroAysen will add 2750 MW to the SIC, according to the constructors, and produce an average of 18,430 GWh per year.

However, the HidroAysen project has stalled despite having obtained environmental permission. Protests from environmental groups have halted work on the project.

HydroAysen project deputy chairman Daniel Fernàƒ¡ndez stressed to Spanish news agency Efe that Chile needs hydropower plants such as the one he represents because the Chile’s energy currently comes mainly from thermoelectric stations fired by fossil fuels that are predominantly imported at a high cost.

Chile’s presidential elections, which are to be held later this year, are expected to decide the future of HidroAysen’s project.

Socialist candidate Michelle Bachelet “who was the president of the country for the period 2006-10 has expressed her doubts over the project. According to La Tercera, Bachelet said that HidroAysen “is not viable”.

Bachelet has a good chance of becoming the president of Chile once again.

However, a number of experts claim that her rejection of HidroAysn could worsen the energy crisis by the 2020s.

The former executive secretary of CNE Maria Isabel Gonzàƒ¡lez believes hydropower provide “a clean and efficient base to supply the energy demand at any time of the day”.

While, Francisco Aguirre of Electroconsultores consulting company adds that HidroAysen “is irreplaceable” because it reduces production costs and will help lower the electricity prices in the country.

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