Chile's Endesa Game - controversial coal power plant approved

Published by MAC on 2012-12-11
Source: Reuters, Santiago Times

Isabel Allende warns of "environmental sacrifice"

Chile approves Endesa 740 MW coal-powered project

Reuters

3 December 2012

SANTIAGO - A Chilean ministerial group has lifted a suspension on energy firm Endesa's 740-megawatt Punta Alcalde coal-fired thermoelectric project, the company said on
Monday, in a boon for miners in the mineral-rich north of the world's No.1 copper-producing nation.

An environmental commission in June blocked Endesa's $1.4 billion complex, citing the project's potential tocause water and air pollution.

Government sources were not available to comment on Endesa's statement or explain why the suspension had been lifted.

Environmental groups are increasingly opposing power projects ranging from coal-fired thermoelectric plants in Chile's northern Atacama, the world's driest desert, to
hydropower dams in the pristine Patagonia region.

"With the aim of canceling emissions of material particles, Endesa Chile will be the first electrical company in Latin America to use domes to cover the two fields that will be used
for the stockpiling of coal in Punta Alcalde," Endesa said in astatement.

Once in operation, the project will have the capacity to supply around 12 percent of energy demanded in Chile's central energy grid.

Chile's power grid has a capacity of 17,000 megawatts. The government aims to add another 8,000 megawatts by 2020.

The ministerial committee, made up of six ministries, meets to review appeals against environment-related decisions. Chile'senergy, environmental and economy ministries were not available for comment.

Marine conservation group Oceana has decried Punta Alcalde, saying the project will saturate the coastal area of Huasco, already home to thermoelectric plant Guacolda and a factory belonging to steelmaker CAP.

"This is a completely arbitrary decision, tainted by pressure from the mining sector," said Oceana's executive director Alex Munoz. "We're waiting for further details to
figure out how to follow up in court or via other paths."

The two 370-megawatt units are planned in Chile's Atacama region, close to Antofagasta Minerals' Los Pelambres mine, Barrick Gold's Pascua Lama and Lumina Copper's
Caserones mine, among others. Several energy and mining projects in the Atacama region are reeling from legal setbacks.

Chile's energy and mining sector is putting pressure on conservative businessman and president Sebastian Pinera's administration to clarify regulatory rules surrounding mega
projects.

During the annual mining council dinner late last month, Pinera said "we need ... to face the topic of increasing lawsuits against approvals given to projects that this country
needs ... We need to urgently advance in materializing energyinvestment."

The Andean country is banking on attracting $100 billion in mining investment and boosting annual copper output by more than 30 percent to over 7 million tonnes by 2020, but many analysts and even miners themselves have called into question the
investment aim.

Shares in Endesa rose 0.90 percent on Monday, outpacing a 0.45 percent increase on Santiago's blue-chip IPSA stock index.

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Chilean opposition vows legal action against power plant approval

Aaron Walck

The Santiago Times

4 December 2012

In response to the approval of Chilean energy company Endesa's Punta Alcalde thermoelectric plant despite its rejection by the Environmental Evaluation Commission (SEA) in June, Chilean opposition members say they will go to national or international court if necessary.

Chile's Senator Guido Girardi strongly opposed the approval of the Punta Alcalde power plant, vowing to challenge it in international court if necessary.

On Tuesday, Sen. Guido Girardi, of the liberal Party for Democracy (PPD), called the decision "illegal" and pledged to appeal to national courts. "If Chile's court system does not overturn the approval", Girardi said he "would take the case to the Inter-American Court of Human Rights (IACHR)".

"This is not a project that guarantees the health of the public or the environment" Sen. Girardi told the press. "The government has abandoned the defense of the public's health. We will take this to the national courts and if necessary to the IACHR because it is our obligation to protect the health and human rights of our communities."

Endesa got unanimous approval from a ministerial committee for its newest US$1.4 billion Punta Alcalde power plant project after addressing environmental concerns. In a press release Monday, Endesa pledged it would adapt the project to meet the highest standards of technology, efficiency and environmental compromise.

"This will be one of the most efficient power plants in Chile and Latin America", Endesa said in a press release. "As a part of these additional compromises acquired by Endesa Chile during the environmental processing we will install an electrostatic precipitator...which will assure the complete reduction of Punta Alcalde's emissions. At the same time, this company has voluntarily committed to establish a maximum level of emissions 10 percent below the actual emission norms."

Girardi was skeptical about Endesa's environmental compromises.

"We cannot keep approving projects that don't fulfill these requirements", he told the press. "This company does not comply with these requirements, safe environmental practices or with their duty to release the full extent of the environmental contamination of their projects. They say they will evaluate and compensate the damage they cause afterwards, but no matter what they do, it will not cover the destruction of the environment and maritime resources this project will cause."

Girardi's words echoed those of his socialist colleague Sen. Isabel Allende, who said the project "would make nearby towns into an environmental sacrifice."

Puerta Alcalde is the latest in a string of controversial energy projects in Chile, such as the La Castilla thermoelectric plant, which was frozen by the Supreme Court in August, and Endesa’s HidroAysén mega-dam project, which was stalled when its minority shareholder withdrew in May.

As Chile's reliance on imported energy and electricity demands increase, the country is getting desperate to consolidate projects.

Recent reports of the promise of renewable energies such as wind, solar and geothermal have led companies such as Ireland's Renewable Mainstream Energy, and Australia’s Hot Rock to begin small ventures into Chile. However, these renewable sources still compose a small fraction of Chile’s 17,000 MW energy grid, are relatively expensive, and produce energy in smaller doses than the 740 MW Punta Alcalde power plant.

According to Endesa, the Punta Alcalde power plant would be one of the most efficient connected to Chile's electricity grid, which would have the capacity to generate the equivalent of 12 percent of the electrical demand for the central grid, which in turn supplies 93 percent of the country.