The Angostura hydropower plant in Chile.

Hydroelectric currents in Chile

Traditionally important hydropower is becoming less common across Latin America. However, as recent activity in Chile demonstrates, flowing water remains a potent source of energy for companies willing to invest. Domestic utilities have long understood this, but more recently, foreign companies have been keeping hydropower relevant.
 
The Angostura hydropower plant in Chile.

Article by Daniel Sweet
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Built in 1959, the 52.5 MW Rucatayo hydroelectric facility is situated along the Pilmaiquén river in Chile, 900 kilometres south of the capital Santiago. For the first 60 or so years of its existence, the plant was controlled by the domestic utility Empresa Electrica Pilmaiquen. In 2015, the Norwegian company Statkraft purchased Empresa, earning the rights to Rucatayo and further enhancing their already strong position in Chile: Statkraft purchased 50 per cent stakes in two other Chilean hydropower plants, La Confluencia and La Higuera, in 2004.

With their purchase, Statkraft also gained the rights to a project that Empresa had been developing before the buyout. The Los Lagos hydroelectric facility, planned for USD 204 million and projected to produce 51.6 MW, became a focus of Statkraft in Chile, and after four years of work, construction began this August.

In a statement, Jurgen Tzschoppe, executive vice-president International Power of Statkraft, said the company is “working to build scale in Chile. We want to capitalize on our combined expertise in power generation and market operations to best serve the market and provide energy to large industrial customers in the country.” Statkraft’s continued interest in Chilean hydropower is somewhat atypical given the current situation in Latin America, where hydropower projects have been on the decline.

Decline in hydropower

Hydropower has long been an important source of energy for Latin America. In fact, according to ABN AMRO’s Energy Monitor (2018), hydropower is still Latin America’s main source of power generation, accounting for roughly 65 per cent of all electricity generated and occupying 80 per cent in the renewable energy mix. But over the years, that statistic has been declining. In 2000, hydropower accounted for 95 per cent in renewable energy. 

Economists Farah Abi Morshed and Marijke Zewuster attribute this decrease in hydropower to the “fear of droughts, environmental impacts (like deforestation), marine life impacts, and social factors (e.g. the displacement of (ethnic) groups).”

These challenges to hydropower have particularly affected Brazil, and as a result, Morshed and Zequster report that “the Brazilian government has been considering various alternatives as part of a bigger plan to remedy structural water management problems. Aside from the environmental challenges, economic projects/rivers are becoming scarce, as most of them are already in production.”

Given the current state of affairs then, the construction of a new Chilean hydropower plant along the Pilmaiquén—some 60 years after the first facility began generating power from its current—illustrates the significant potential of Chile’s waterways. Indeed, the International Journal of Hydropower & Dams estimates the technically feasible hydropower potential in Chile at around 162.000-gigawatt-hours per year. 

In addition to foreign investors, domestic utility companies remain aware of this potential. Last year, another hydroelectric facility began to capitalise on Chile’s capacity for hydropower and is owned and operated by an in-country provider.

Los Cóndores

The Los Cóndores Hydropower Plant, which became operational in 2018, serves as another testament to the continued importance of hydropower in Chile. The plant is operated by the Chilean utility company ENDESA and is currently producing 150 MW of clean electricity per year. Power is generated at the plant via two vertical-shaft Pelton turbines installed in an underground powerhouse at the end of a 12-kilometre-long tunnel.

One common feature of the Los Cóndores plant and the Los Lagos facility is equipment from Voith Technology Group. Voith’s involvement in Los Cóndores consisted of contracts for the two Pelton turbines, as well as two generators, plant and product engineering, manufacturing, erection, supervision, commissioning, and project management services. The project’s key components were manufactured at Voith Hydro in São Paulo, Brazil.

For Los Lagos, Voith was again selected to serve as the electro and hydro-mechanical contractor. The delivery of major components and construction services from Voith is also expected from their facilities in Brazil.

Latin American renewables

Despite declines in the use of hydropower across Latin America—except Chile—the region generates some of the cleanest energy in the world. The effort of Latin American countries to draw from renewable sources has led to an increase in their installed capacity for renewables, from 10 GW in 2006 to 36 GW in 2015. Three Latin American countries—Chile, Mexico, and Brazil—rank among the top 10 in renewable energy markets. And the overall share of Latin America’s renewable energy runs to twice the global figure.

As is the case with hydropower, Chile is a significant contributor to Latin America’s overall renewable push. Chile began 2019 with a power mix made up of 20.8% renewable energy, an increase from the 17.9% share recorded in 2017, and almost 92% of the freshly added 715MW to Chile’s electricity system in 2018 came from renewable sources, led by solar (59%) and wind (32%). Chile’s Atacama Desert currently boasts Latin America’s largest solar panel park, and Chile is home to South America’s first geothermal plant.

At a global scale then, Latin America remains a top contender in renewables, even as its general hydropower output diminishes. And as domestic and international power companies alike continue to tap Chile’s potential for hydroelectric energy, the country will help keep the region at the top.
 

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