Chile: Dam Company Revamps Polemical Hydro Project

Environmentalists and Region XI residents opposing the Aysén Dam Project claim it will be environmentally and culturally destructive. Of particular concern is the 93 square kilometers of wilderness and farmland HidroAysén, in its original design, planned to flood.

In an effort to garner support for its contentious Aysén Project, HidroAysén unveiled a new – and at least in the company’s estimation – very much improved version of the planned hydroelectric complex.

As originally presented, the Aysén Project called for two massive hydroelectric dams on each of Region XI’s two largest rivers: the Baker and the Pascua. Together the dams were expected to produce approximately 2,400 MW of electricity – roughly equivalent to 30 percent of the electricity currently available in central Chile.

According to energy companies Endesa and Colbún – co-owners of HidroAysén – the project is a necessary response both to Chile’s growing appetite for electricity (rising more than 6 percent annually) and its vulnerability vis-à-vis ongoing shortages of Argentine natural gas, which is used here for electricity production.

Over the past year, however, the Aysén Project has attracted numerous critics. Environmentalists and Region XI residents opposing the venture claim it will be environmentally and culturally destructive. Of particular concern is the 93 square kilometers of wilderness and farmland HidroAysén, in its original design, planned to flood.

That’s precisely one of the sticking points HidroAysén is looking to address with its redesign. Last week, the company announced plans to reduce the projected flood zone by 36.5 percent. The reduction, however, should not affect overall electricity production, HidroAysén General Manager Hernán Salazar revealed. In fact, the company now anticipates the project will generate 2,750 MW, thanks in large part to a fifth hydroelectric dam slated for the area.

"Water is a resource that is naturally abundant in Chile and we ought to use it in order to solve to the country’s problems," said Salazar

The new plan, Salazar added, will also spare one of the area’s most impressive tourism attractions: a large waterfall located at the intersection of the Baker and Nef Rivers. The falls, one of the region’s most breathtaking natural wonders, is a popular spot for fly fishing.

With these changes, HidroAysén is hoping the hydroelectric venture will be more attractive to the Chilean government, which through its National Environmental Commission (CONAMA) must decide whether to approve the polemical project. HidroAysén expects to hand CONAMA a requisite Environmental Impact Study (EIS) early next year and begin construction on the first of the five dams – the 660-MW Baker I – in 2009. Overall the project, by far the most ambitious hydroelectric venture in Chile’s history, would take a decade to complete.

Mixed Signals

The Chilean government, for its part, has offered mixed signals over the controversial project. Ana Lya Uriarte, the government’s top environmental authority, insisted last week that the Bachelet administration will take up the issue only after HidroAysén has submitted its EIS.

"This isn’t the moment to make declarations about this project. It would be unwise to do so…When it comes to environmental decisions, regardless of the project, it’s up to CONAMA," she said.

Uriarte’s comments echoed similar statements in early June, when she declared that the government, despite Chile’s current energy woes, would not fast-track the Aysén Project. "There are no special dispensations allowing a project to skip the legal procedures or the existing rules. Therefore, regardless of what the project is, it’ll have to be evaluated according to the current norms," she said.

Others in the administration, however, have taken a far less cautious approach to the topic. Energy Minister Marcelo Tokman, during the recent inauguration of a Colbún-owned hydroelectric plant in Region VIII, described the Aysén Project’s electricity potential as "necessary."

Two weeks earlier, Rodrigo Iglesias, executive secretary of Chile’s National Energy Commission, also threw his weight behind the project. The Aysén Project "could strengthen (Chile’s) energy security and independence, due to its scale and hydrologic stability… This will reduce exposure to the volatile prices or imported fuel that Chile uses to generate electricity," he said.

National Tourism Service (SERNATUR) head Óscar Santelices, on the other hand, openly criticized the project this week, calling the Endesa-Colbún plan a threat to Region XI’s budding tourism industry. "Aysén is an excellent area for tourism. Given our legal mandate, we ought to preserve the scenery," he told reporters.

Santielices said Chile should instead explore energy alternatives – including the nuclear option. "Why not?" the SERNATUR official questioned. "President Bachelet has asked for studies to be done on the viability of nuclear energy. It’s another alternative, not necessarily the only one, but it needs to be looked at seriously. Argentina has it. Brazil has it. Why not Chile?"

Continued Local Opposition

The Aysén Project, meanwhile, continues to draw harsh criticism from leading dam opponents like the Santiago-based NGO Ecosistemas and the Region XI-based Citizen Coalition for Aysén Life Reserve (CCARV), which argue that even with the proposed changes, the plan threatens to devastate the area.

In a joint declaration issued Thursday, Ecosistemas and the CCARV said the Aysén Project would "kill" the Baker and Pascua Rivers. The organizations also said the project marks the beginning of an overall effort to industrialize Patagonia and turn it into a giant energy reserve.

"Keep in mind that beyond the four dams planned by HidroAysén, the Swiss mining company Xstrata is also considering building one. And with the way that other electric companies are abusively applying for water rights, there could be many more (dams)," the declaration reads.

The "abusive" acquisition in this case refers to a company called Sur Electricidad y Energía S.A., which in the past several months has petitioned for a flurry of area water rights. Since June 15, according to the CCARV, the company has filed for water rights along the Cisnes, Cáceres, Vlanco, Norte, Cajón, Ñireguao, Pangal, Figueroa, Planea, Bravo, Ibáñez, Los Ñadis, Mayer and the Baker Rivers.

"We’re concerned about how this particular company wants to get into the huge (hydroelectricity) business that already involves Endesa, Colbún, Xstrata and AES Gener," CCARV representative Peter Hartmann said in a July press release. "They know that if the transmission line for the Baker and Pascua dams gets built, the path will be clear for the continued destruction of all of our rivers… Today we can clearly see that the attempt to loot Patagonia has already begun."

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