Residential Electricity Rationing May Begin in Chile as Foreign Owned Mining Industry Consumes Almost 100% of Electricity Produced from Hydropower

Depleted reservoirs, the recent closure of a major generating plant and an expected consumption surge in March have Chilean authorities concerned about Chile’s ability to meet its growing electricity needs.

Chile generates roughly 38% of its 13,000 MW of total electricity with hydroelectric dams.

(Of which almost 100% is consumed by the foreign owned mining industry.)

Last year’s dry winter and unusually warm spring, however, have resulted in dropping water levels in the reservoirs that feed those dams. In fact, water levels in Chile’s reservoirs are down by an average of 40% compared to this time last year. Some reservoirs are drier still.

Region IV’s Cogote reservoir is down more than 55%, while the Peñuelas reservoir in Region V has dropped a staggering 65% in the past year.

Many of those reservoirs now contain barely the minimum amount of water they need to operate properly. Once the reservoirs drop below that minimum, the dams they feed begin functioning as “run of the river” dams, which can mean a sharp drop off in electricity production. For example, Region VIII Ralco dam, the country’s most powerful, has the capacity to generate some 690 MW. But if water levels drop below 692 meters (they’re currently at 703.7 meters, down 18 meters since early February 2007), the Ralco dam (On the Biobio River) would produce just 50 MW of electricity.

Complicating matter even more are predictions for yet another dry winter. Meteorologists say the “La Niña” effect, which involves a notable cooling of the Pacific Ocean water, could mean less than average rainfall for the country.

Chile’s electricity grid also took a hit late last year when a turbine fire forced the closure of Region V’s 370 MW Nehuenco plant. The thermoelectric plant, owned by Chilean energy company Colben, is currently under repair and is not expected to reopen for several months.

“There are two new factors that make this year, especially March, very complicated. We’re talking about the shutdown of the Nehuenco plant and also the low snow accumulation due to high temperatures at the end of last year,” Energy Minister Marcelo Tokman told reporters this week.
“If another large plant goes down, it’ll be next to impossible to avoid rationing. However, given the current situation, we think that with some additional measures we plan to take, we’ll be able to avoid (rationing) in March,” he said.

It’s not yet clear what exactly the government’s soon-to-be-announced measures will entail.

Analysts, however, say one possibility could be a slight voltage reduction. Chilean residences are wired to receive 220 volts of electricity. That voltage can be tweaked by as much as 7% either up or down without damaging household electric devices. The government might also authorize electricity providers to establish rate incentives for customers willing to reduce consumption.

(No plans are in place to limit the mining industry: Ransacking Chile: Fabulous Profits for Multi-Nationals)

This is certainly not the first time Chile’s electricity scenario has captured headlines. Over the past four years significant media attention has gone to the so-called Argentine natural gas “crisis.” Chile traditionally relies on natural gas – used in thermoelectric facilities – for much of its electricity production. However, ongoing supply cuts from Argentina have forced producers to turn to more expensive alternatives. As a result, costs for producing electricity have risen dramatically – up by more than 200% in central and northern Chile.

(A man made problem, not a resource issue: "Cheap" energy costs Argentina billions and more blackouts - The cause of Chile's natural gas shortage? )

The country’s natural gas woes have been used in turn to argue in favor of large-scale hydroelectric ventures such as the controversial HidroAysen project. A joint entity created by Spanish-Italian electricity giant Endesa and Colbon, HidroAysen is planning to build five massive hydroelectric dams in Region XI, an area of Chilean Patagonia also known as Aysen. (More efficient and less environmentally destructive than helping Argentina overcome its energy problem, which would relieve Chile's in turn.)

Slated for the Baker and Pascua Rivers, the five dams would together generate a substantial 2,750 MW of electricity. That energy, say backers of the project, would go a long way toward alleviating Chile’s growing appetite for electricity, said to be rising by more than 6% annually.

(A 6% annual increase in electricity corresponds to a 30% increase in population as Chile's residential customers only consume 17% of the electricity generated.)

The project, however, is being hotly contested by a coalition of Region XI residents, Chilean environmentalists and NGOs in both the United States and Spain. Critics say the dams will destroy the pristine Baker and Pascua rivers and set the stage for an all out “looting of Patagonia
. Chile ought instead to invest in non-conventional, renewable energy sources such as wind and solar, argue leading dam critics like Juan Pablo Orrego of the Santiago-based NGO Ecosistemas.

“Chile is a country that’s exceptionally rich in terms of renewable energy sources.

Exceptionally rich. We could have solar energy in the north, wind energy throughout the entire country, geothermic energy from top to bottom, and tidal generators. But so far in Chile nothing’s been done with all these renewable energy sources. We’ve also done nothing in terms of efficiency,” Orrego said during a recent press conference in Santiago.

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