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Chile hopes to overcome its ultra-dependence upon energy

marcelotokman.jpgThe limit to energy sources poses a threat to the sustainability of Chile’s economic growth, which is a reason why Michelle Bachelet’s government strongly supports the development of hydroelectric energy in Patagonia. The initiative is tempting for Chilean and Spanish investors and the authorities, but ecologists, farmers, livestock farmers, fishermen, professionals and local cultural associations are making their concerns about the project known. The government’s objective is to have by 2011 or 2012 an energy grid that is more assured than the current one.

(From Santiago) THE CHILEAN MINISTER OF ENERGY, Marcelo Tokman, recently confirmed for us that Chile imports two thirds of the energy that it consumes.

Practically all of the oil that Chile consumes is imported, as is more than 90 percent of its coal. “With this project, ENDESA confirms that Chile is its strategic Latin American destination” What’s more, gas has recently turned into a nightmare for the Chilean authorities, due to the new production demands of Argentina, a habitual provider to Chile, and the changes in Bolivia’s energy policy. Tokman admits that natural gas is no longer sufficient for any electricity generation whatsoever.

This constraint seriously threatens the normal functioning of the Chilean economy, and it is for this reason that the government has made energy policy one of its top priorities. The key to this effort lies in diversification of the grid: The objective of Bachelet’s government (as Minister Tocman pointed out to us) is to have by 2011 or 2012 an energy grid that is much more assured than the one that we currently have.

HYDROELECTRIC ENERGY: AN ACE UP THE SLEEVE

In order to achieve this, the government will employ all of the resources that it has at its disposal. “The authorities and those in charge of the firms argue that hydroelectric energy is clean and sustainable and cite the cases of Canada, Norway and New Zealand” It is not going to renounce carbon-based thermal energy generation, although it recognizes that due to its high contaminating effect there are more preferable options. The introduction of the GENEL project in Chile (in the northern and central parts of the country) to compensate for the Argentinean supply problems is considered to be a stand-out one.

But the great gamble will be the development of hydroelectric energy. This is one of Chile’s very powerful resources, but variability in rainfall has impacted its development. However, it looks like the current star project dodges this risk, as it involves the construction of several hydroelectric power plants in Patagonia, where some of its rivers have a steady flow of water. In short, the Baker and Pascua Rivers, fed by the glacial bodies North Ice and South Ice, have what Hernán Salazar calls non-cyclical behavior, or very little variability.

Salazar is the manager of HidroAysén [1], “In the next few years, in order to transport the energy, Chile will erect the longest high tension electrical installation in the world: more than two thousand kilometers” the company that will build the dams. Spanish-owned ENDESA [2] controls 51 percent of HidroAysén, while the remaining 49 percent belongs to the Chilean COLBUN [3]. With this project, ENDESA confirms that Chile is its strategic Latin American destination: it obtains three quarters of its regional profit from there.

Although the HidroAysén project is important, it will, of course, not solve Chile’s energy necessity problems on its own, given that when it is completely developed it will only meet about one fifth of the demand of the so-called Central Interconnected System (Sistema Interconectado Central), the electric connection mechanism upon which 90 percent of the country’s consumption depends.

THE OBSTACLES

But before the Patagonian rivers can be tamed and their energy harnessed, serious problems must be overcome. A large coalition of ecologists, local businesses, farmers, livestock farmers, fishers, professionals and local cultural associations are strongly opposed to the project, due to the ecological impact and the changes in culture and customs that it will produce in the region.

“The campaign against the dams is overwhelming the Chilean region. Powerful international ecological organizations have seriously committed themselves to trying to save Patagonia” The authorities and those in charge of the firms argue that hydroelectric energy is clean and sustainable and cite the cases of Canada, Norway and New Zealand, countries that are very respectful of the environment and have clearly given their support to this method of electricity generation.

Yet there is another important reason why the plan is being rejected by some. The energy that the Baker and Pascua Rivers will produce will not stay in the area, but will instead go towards fulfilling the energy necessities of Santiago, with its six million inhabitants and myriad of businesses dotting the megalopolis and mining companies in the third and fourth regions, which are even further north. This means that in order to transport the energy to these places, Chile will erect the longest high tension electrical installation in the world (more than two thousand kilometers) in the next few years. It is an economical matter; as the demand for energy in the region is very scarce, the price of converting the electricity from a direct current to an alternating one in order to bring the electricity down is not worthwhile.

The campaign against the dams is overwhelming the Chilean region. Powerful international ecological organizations and a good number of American celebrities from Hollywood and elsewhere have seriously committed themselves to trying to save Patagonia.

THE GOVERNMENT OPTS FOR NEUTRALITY

“Everything indicates that ENDESA will continue to conduct a substantial amount of business in Chile The government is contemplating the dispute with uneasiness. In principle, it adopts a position of neutrality. The director of CONAMA (The National Environmental Commission), Álvaro Sapag, merely pointed out to us that the country needs that energy and that the project will be approved if it passes the environmental impact evaluation, which is about to be initiated.

The General Water Director, Waissman, revealed to us that ENDESA had to modify its solicitation for water rights because the initial petition called for control of the entire Baker River basin. The use of water has been privatized in Chile ever since Pinochet’s dictatorship.

“It is Patagonia’s hydroelectric power plants that will take center stage in the media during the upcoming months” The Chilean government is in general showing itself to be favorable to ENDESA’s operations through its partners and associates in the country. The controversy over the construction of the Ralco power station, due to the displacement of indigenous “mapuche” communities, has still not been put to rest. Some of the local populations’ claims are currently in court. Ecologists are denouncing the unclear behavior of the Spanish company.

Nevertheless, everything indicates that ENDESA will continue to conduct a substantial amount of business in Chile. What’s more, the Andean country will even be used by the firm to project an image of it being committed to the environment. Last December, the Chilean president Michelle Bachelet and the president of ENDESA, José Manuel Entrecanales, inaugurated a wind power station in Canela, in the northern part of the country, with an initial capacity of 18 megawatts, but with a potential for up to 90.

Ecologists lament that these initiatives are so scarce, and they call for a greater effort to develop the potential of not only wind power, but also of solar, tidal, and geothermal (starting with volcanoes) power. Minister Tocman assured us that the government is not overlooking any of these resources, and he recounted to us some of the action (legislative and in R&D) currently in progress. Nonetheless, it is Patagonia’s hydroelectric power plants that will take center stage in the media during the upcoming months.