Social license imperative for Colbún's Chile hydro projects

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Friday, June 12, 2015

Knowing firsthand the perils of social opposition to large energy projects, Chilean generator Colbún is part of a growing corporate social responsibility movement in the country's electric power sector.

Speaking at a sustainability conference organized by industrial association Sofofa, Colbún CEO Thomas Keller cited his firm's 316MW Angostura dam, which entered operation in 2014.

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The US$675mn project included the construction of a park on the Biobío river with campsites, hiking trails and other outdoor amenities and which attracted 100,000 visitors this past summer, Keller said.

But it will take more to win over Chileans living near large power plants like Angostura in Chile's far-flung regions, who often pay much higher electricity bills than residents of capital Santiago and who have long complained about a lack of input in the planning of projects and about not receiving economic benefits from operational power stations in their own backyards.

Local conflicts have stymied development of large projects like the all-but-doomed HidroAysén dam, in which Colbún holds a 49% stake. The energy ministry aims to address the problem through its proposed asociatividad bill, which would mandate the payment by generators for land rights to local governments instead of to the national government, and would ensure that residents living near large power plants receive discounts on their electricity bills.

The Chilean association of power generators endorsed both measures in its latest monthly report.

The second part of the bill would be introduced later, according to a report from local paper Pulso, and would involve a framework for the sharing of project benefits with communities through local development initiatives.

SUSPENDED US$650mn DAM PROJECT BACK ON

Colbún submitted an environmental impact study (EIS) to environmental regulator SEA for a series of modifications to the US$650mn San Pedro hydroelectric dam project, which had been on hold since 2011.

The dam, which would have a maximum capacity of 170MW, first received environmental approval in 2008, a Colbún statement said.

After launching construction in 2009, Colbún suspended works in 2011 following the discovery of poor quality rock at the construction site along the northern bank of the Riñihue river.

The modifications will involve lengthening the dam about 45m to "base it on suitable rock."

The EIS coincided with the launch by Colbún of a website for the project "with the objective of facilitating access to relevant information" about San Pedro, a company statement said.