Only 10% of electric power projects approved would be operating this year and no large size power plants are scheduled after 2014
The called-off megaproject HidroAysén is reducing its staff and will only be withholding about 20 people by the end of 2013
A 10% of electric capacity that obtained the environmental approval between 2010 and 2012, adding up 11,269 MW, will be for immediate start-up. The situation turns even more concerning and creates uncertainty – as some expert sources indicate – because from 2014 onwards there are no signs of large-size projects to be carried out.
In accordance with figures provided by the Ministry of Energy since Sebastián Piñera undertook the nation Presidency in 2010 environmental permits for electric power generation projects have been increasingly granted. In 2010 1,590 MW were authorized, 4,323 in 2011 and 5,356 MW in 2012. However for this year only 1,057 MW are forecasted to operate and most of them in the northern area of the country.
As per estimations from some sources well acquainted of the area, in the SIC system going between Taltal and Chiloé only a 5% of authorized works will be carried out and amongst them the following power plants: San Andrés (40 MW), El Paso (40 MW), Campiche (270 MW), Angostura (316 MW), El Arrayán (115 MW), Talinay (90 MW), and Viñales (32 MW ).
“More than 20,000 MW projects including different technologies and owned by different companies (…) have been approved or are in the environmental approval process, however the problem is that only a minor fraction of them is being built”, Bernardo Larraín Matte warns in a communication to shareholders.
“The energy issue is an important pending matter because in these four years no important progress has been observed”, the Senior Economist for Libertad and Desarrollo Think-Tank, adds. She adds that analyzing the electric power projects that have been granted the environmental approval is not enough, most of the projects must deal with some problems after having successfully overcome the environmental requirements.
LyD indicates that certainly projects gathering 8,939 MW are going through troubles – and in fact are in standstill condition- amongst which the following may be mentioned: HidroAysén, Energía Minera, Punta Alcalde, Castilla, Energía Austral, Neltume, Eolic Farm of Chiloé. “The Government has lacked the determination to develop electric power projects”, the expert concludes.
The situation is that from 2014 onwards there is no certainty for larger than 100 MW projects, notwithstanding the country needs call for 350 MW per year. “The lack of projects for the future is concerning because we will have a debilitated supply”, Jiménez states.
This reduced capacity explains the reasons for not having received offers in the last five calls for bids made by distribution companies as well as the prices rise and the problems to supply industrial and mining customers, Colbún’s CEO, Bernardo Larraín Matte warns in the company´s financial report.
As per Susana Jiménez opinion “the light will not be turned off but the bill will be higher” because the system will have to go to more expensive sources as it is the case of diesel.
Jammed Agenda
Currently only one project exists in the energy agenda of Government that may be approved during this term in office: electric concessions. “The Government has striven for this project, a very important one to develop the sector”, the LyD Legislative Program Director, Natalia González, comments. Impeachment against Minister of Education, Harald Beyer, may even delay the agenda, she adds.
The other key projects in the sector are the “electric highway” that, to the LyD expert’s opinion, is even more complex to be approved during this period, and the electric interconnection issue, that for not being able to be executed by the administrative way, will be finally realized by means of a proposed law.
And there is another problem: the NLDC (National Load Dispatch Center) reform. There are two NLDC in the country, one for the Norte Grande Region and another for the center-south region (SIC) and the Government committed to change the corporate government to empower it with more autonomy. The administrative change was not possible because the National Audit Office rejected the draft the Ministry of Energy sent. Consequently, the modification should then be made through legal procedures which is almost impossible because of the legislative burden it implies.
HidroAysén to reduce headcount to 20 people
The megaproject where Colbún (49%) and Endesa (51%) are partners, i.e. HidroAysén, is the largest project set in standstill condition in accordance with a survey made by LyD.
In the case of HidroAysén, its stoppage became evident when the Matte’s Colbún communicated they were putting a halt to the environmental study of the transmission line due to the uncertainty of the investment.
Until now the partners of this project have made disbursements that amount to US$280 million but as it is now in a standstill condition they have started reducing the staff to the minimum. If two years ago the headcount was about 100 people in HidroAysén, now they are only 50 and by the end of 2013 only 20 will be left, as some professionals close to the project have confirmed.
Source: El Mercurio
