Factors such as drought, the lack of major hydroelectric projects and community opposition have contributed to the decrease in the installed capacity of this generation source in the SIC. A formula is currently being sought to reverse this situation.

Hydropower development: Obstacles and strategies

It is considered one of the most abundant sources of generation in the country and, until about ten years ago, its installed capacity in the Central Interconnected System (SIC) was approximately 60%. However, the picture has now changed for hydroelectric power plants, with the figure reaching just over 40%.

According to the information provided by Generadoras de Chile, the level of hydroelectric production that existed in 2000 was 20,000 GWL, a number that was maintained in 2013. This is despite the growth in energy consumption over the last decade, which is why it is established that this requirement has been covered directly by the contributions made by coal to the SIC.

The reasons? Factors include the drought that has affected the country in the last five years and the lack of execution of large hydroelectric projects. This is compounded by the alleged concentration of ownership of water rights and community opposition to this type of work.

An example that illustrates this situation is the Angostura dam power plant, which recently came on line after the debut of the Ralco power plant in 2004. With respect to the outlook for the coming years, this does not vary much since, according to the latest works plan, published in April by the National Energy Commission (CNE), the only hydro projects contemplated are Ñuble (137 MW), Las Lajas (267 MW), Alfalfal (264 MW) and San Pedro (144 MW), initiatives that have not been free of complications and, as a whole, will be operational by the end of 2019. From then on, there are no new proposals.

For Rodrigo Jiménez, general manager of Systep, these difficulties not only affect the projects directly involved, but also give a tremendously damaging signal to future investors, where it is evident that today it is not only enough to obtain the permits granted by the State itself, but they can also be revoked or validated in court.

The point of origin

A milestone in the country’s water history is when the 1980 Constitution was enacted, which protects the right of property over the right to use the resources at the constitutional level, and with it the 1981 Water Code came into force.

This new regulatory scenario meant that any person or company could apply for unlimited rights and incorporate them into their assets, without having to pay for their maintenance.

For some specialists, this implied the concentration of water rights in a reduced group of companies, while for others it was used as a speculation mechanism to prevent the development of new projects.

Patricio Rodrigo, executive director of Chile Ambiente, points out that the country is privileged in having sources from Aconcagua to the south and what is needed is the release of water rights, most of which are in the hands of Endesa, so that various projects can make the most of this resource, always respecting the environment and local communities.

Rodrigo Weisner, former general director of Aguas and lawyer of Puga Ortiz, explains that although there are water rights associated with large flows and falls, which allow the construction of power plants exceeding 100 MW, the deficit of hydroelectric projects does not occur because these rights are concentrated.

What has existed, Weisner explains, are entry barriers generated by known speculators who ask for small non-consumptive water rights to prevent the development of projects, which, in his opinion, needs to be addressed by the institutional framework of free competition.

The first conflicts

With water rights in private hands, and with it hydroelectric development, the community began to question the private sector’s ownership of these titles and its investments in hydroelectric power, since, as Hugh Rudnick, an academic at the School of Engineering of the Pontificia Universidad Católica, says, “they were aimed at profit and not at social benefit”.

He adds that in the 1990s, environmental studies were also called into question and projects began to be prosecuted, a fact that was related to the creation of environmental institutions during this period, which began to make much higher demands on these initiatives.

“At that time there began to be difficulties for the development of these infrastructures due to the generation of conflicts with the communities, particularly in the Biobío river sector, since groups of Pehuenches said that the implementation of these initiatives would affect indigenous areas; a position that was supported by environmental groups that began to act to try to stop this hydroelectric development”, explains Rudnick.

However, this situation is different in Brazil, says the academic, and proof of this is the construction of the Belo Monte power plant which, although it has had an impact on indigenous groups, the government has managed to negotiate with them. The reason? In that country, the State has led the development of hydroelectric power and is positioning an energy matrix, since for them this energy source is very relevant. “In Chile, the government withdraws and lets the private sector solve problems, but this sector has not been able to solve citizen problems and community relations,” Rudnick emphasizes.

Seeking consensus

Although there is currently a mea culpa on the part of the hydroelectric companies due to the episodes that generated impacts on the community, Hugh Rudnick suggests that they should find mechanisms for relating with the inhabitants by passing on part of their benefits.

As a result, the State has been asked to seek community compensation schemes to mitigate the impacts and make them participants in the profits they produce.

Along with the above, Minister Máximo Pacheco is promoting the energy agenda, which – in his opinion – must be socially validated, and to this end he organized a meeting that brought together businessmen from the sector and representatives of civil society to generate consensus that will enable energy initiatives to be unblocked.

What do these investment proposals need to look like? Patricio Rodrigo states that a good project is in line with modern low-impact technologies and correctly located. In addition, it must comply with the requirements of the Environmental Impact Assessment and carry out an effective citizen participation process where social actors can make their contributions to the project and feel involved.

For projects in indigenous territories or rural communities, the director of Chile Sustentable maintains that rather than compensating economically for eventual impacts, a formula should be sought to make them participate in the benefits and/or profits of the initiative.

Box 1

HidroAysén

Regarding the HidroAysén project, the Minister of Energy, Máximo Pacheco, stated that during the month of June the Council of Ministers will meet and make a decision regarding the 35 complaints against the project. The company issued a public statement explaining that it will not move forward until next year, when it is more certain of the definitions of the new authorities.

Box 2

Hydroelectricity in the Energy Agenda

Within the third axis of the Energy Agenda announced by the Ministry of Energy, which refers to the development of the company’s own energy resources, the first line of action is to support hydroelectric development with sustainability criteria. “The Ministry of Energy and DGA will develop joint actions to maintain an updated and georeferenced information platform on non-consumptive water use rights granted and in process for use in hydroelectricity in the priority basins of the SIC,” the document details. In addition, the chapter on citizen participation and land use planning states that a global mapping process of the country’s watersheds will be carried out, based on technical, hydrological, geological, environmental, economic and socio-cultural criteria.

Conclusions

• In the last ten years, the installed capacity of hydroelectric generation in the SIC has decreased from 60% to 40%.
• Factors include the drought that has affected the country in the last five years and the lack of execution of large hydroelectric projects.
• There is also the alleged concentration of ownership of water rights and the opposition of the community to this type of works.
• Today there is a need to generate mechanisms for community relations.