Three-year drought hurting Colbún's thermo generation

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Thursday, August 29, 2013

The ongoing drought in Chile, which has impacted hydro generation across the nation and caused electricity prices to rise, is now taking its toll on thermo generation of the main grid's largest generators.

The largest generator on the central SIC grid, Colbún, reported that due to the ongoing dry conditions it has had to seek additional sources of water for cooling and emissions reduction at the Nehuenco thermo complex in region V. The complex's 12 wells are not producing enough to meet the plants requirements and the company is studying other ways to ensure water supply in the long term, according to Colbún's latest MD&A.

Despite the fact rainfall in the second quarter this year was lower than in 2Q12, hydro generation remained steady due to grid operator CDEC-SIC's decision to dispatch more Colbún's namesake 474MW large hydro.

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Construction at Colbún's 316MW Angostura hydro project, the largest Chilean hydro built in the last decade, is on track to begin filling the reservoir this quarter and start injecting power into the grid by year-end.

A construction start date for the 150MW San Pedro hydro will be set later this year as the analysis of studies and monitoring efforts continues into 3Q13.

The company continues developing the 34MW La Mina hydro, a second 342MW unit at the Santa María thermo complex and feasibility studies for a floating storage regasification unit (FSRU) LNG terminal.

Colbún posted net income of US$41,7mn in Q2 compared to a US$19.7mn loss in 2Q12 due to low cost generation at the Santa María I coal plant, improved natural gas supply conditions which reduced diesel generation, and a US$63.9mn insurance payment for when the Nehuenco I was offline due to a fire in late December 2007.