Rurelec in Chile: An uphill battle to add cleaner capacity

Monday, December 1, 2014

Part I: Termonor

The footage of Rurelec representatives leaving a radio station after an interview last month in the northern Chilean city of Arica, in Arica and Parinacota region (XV), is unsettling.

The YouTube clip shows protesters angry about the UK-based power company's planned Termonor thermoelectric plant, yelling obscenities and throwing water and other objects at the men as they rush to a waiting van.

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Rurelec's foray into Chile began in 2010, when it acquired the 38MW backup power project.

Termonor's original developers had obtained environmental approval in 2009 for the plant to run on the heavy, highly viscous fuel oil No. 6.

"Nasty stuff," Rurelec business development manager Tom Bouwens told BNamericas, "that if you put it in a glass and turn it upside down, it stays in the glass ... which is just not what Rurelec does."

Rurelec's model in Latin America has been to convert open-cycle gas plants to the cleaner and more efficient combined-cycle process, as it did with the Comodoro Rivadavia plant in Argentina and the Guaracachi plant in Bolivia.

The upgrades were partly funded through United Nations (UN) carbon credits. Although the plants run on fossil fuels, Bouwens said, "as far as the UN was concerned, the process of adding the extra cycle and using the waste heat is effectively like a renewable technology."

Rurelec planned to make Termonor into a cleaner project as well, and to increase capacity and introduce needed competition on Chile's coal-dominated northern SING grid.

Rurelec filed a request, or "pertinencia" with Chilean environmental authority SEA to amend Termonor's declaration of environmental impact (DIA). Under the pertinencia, which SEA initially approved, Rurelec would install a gas turbine with dual fuel capability instead of diesel powered engines.

Since Rurelec would not immediately have access to gas in Arica, the turbine would first run on light diesel No. 2, which burns much cleaner than fuel oil No. 6.

Rurelec planned to switch to gas as soon as it could secure gas in Arica, and to eventually convert the plant to combined-cycle as it had with the Argentina and Bolivia plants, quartering the emissions that the fuel oil plant would have produced.

"From an economic point of view, the fuel oil No. 6 project was the easier project to do," Bouwens said. "It was already approved, and commercially it made sense. It was a profitable project, but Rurelec has aligned itself as a clean tech company."

Tomorrow: Rurelec in Chile: Trouble begins.