Earlier this week, the CEO of the Italian energy company ENEL*, Fluvio Conti, met with Chilean President Piñera to push for the rapid completion of the environmental review of HidroAysén Mr. Conti complained that the process to consider the impacts of this massive proposal to build five dams on two of Patagonia’s wildest rivers was proceeding “very slowly”. He appears to believe that the President should exert his influence to short circuit the regulatory process. However, Mr. Conti failed to recognize that the cause of the delay is due to not to the government’s actions, but instead to his company’s inability to now twice provide full and accurate documentation of the impacts of the dams. Instead of trying to ram this scheme through, ENEL should be helping the new Chilean Administration think through all of its options to achieve real energy security.
President Piñera has publically spoken in favor of large hydro development, but has not to his credit suggested that he would meddle with the environmental review process. Under Chilean law, the initial decision on the adequacy of the environmental review has to be made by the Environmental Commission of Aysén (COREMA), the Region where the dams would be located.
In August 2008, HidroAysén submitted a massive 10,500-page environmental impact assessment (EIA) to COREMA. State agencies and civil society groups were given 60 days to review the document, and then filed over 2600 criticisms. Eleven agencies called for its outright rejection because the EIA lacked essential information and baseline data. In November 2008, the head of COREMA acted on his own—even before the public comment period finished—and granted the company nine months to address these critiques. His decision was quickly challenged by the Patagonia Defense Council and members of Congress. They argued that under law only COREMA’s board, which is comprised of members of the participating agencies, has the power to provide an extension by means of a vote. Their petition is currently awaiting final appeal before Chile’s Comptroller Tribunal.
In October 2009, HidroAysén submitted a nearly 5000-page Addendum. Within their given ten day period, state agencies reviewed the document and filed over 1100 critical comments (per Chilean law, civil society was not allowed to participate beyond the first round). They again called attention to the major gaps in key information and described how the data it does contain is unsubstantiated or erroneous. See my earlier blog on the serious deficiencies in the revised EIA here. One key problem they cited was the lack of analysis of the effects of climate change on the rivers, particularly the increasingly frequent glacial lake outburst floods (or GLOFs), described in further detail here. In January 2010, the same head of COREMA again unilaterally and illegally decided to grant HidroAysén six months to address these new comments. This second Addendum is due June 30th.
Throughout this environmental review process, Chile’s state agencies have demonstrated real integrity and technical ability. They have been inundated with thousands of pages of convoluted information and fully analyzed them under next-to-impossible deadlines. And the head of ENEL has the nerve to complain about the speed of the environmental review! Any interference in this process on the part of President Piñera—or anyone in the central government, for that matter—would be an insult to these agencies’ arduous efforts.
The fact is, there is simply no need to rush to build or approve HidroAysén. A technical study released last summer, Are Dams Necessary in the Patagonia?, demonstrated that by 2025, there will be more than enough energy generated between the projects currently under construction and already approved for development to supply all of Chile's demands without HydroAisen, and without taking any extra energy efficiency or renewable energy measures. Neither HidroAysén nor ENEL has ever challenged these findings. Mr. Conti apparently agrees with the need to explore Chile’s variety of resources, evidenced by his statement that “one technology alone cannot solve the issue of energy dependence... We need all.” The country has a remarkable potential for solar, geothermal, wind and tidal power. And Energy Minister Raineri recognized this when he recently suggested doubling Chile’s renewable energy target, from 10% to 20% of total generation by 2020.
The International Energy Agency just completed a thorough review of Chile’s energy sector last October. The report was generally favorable and complimentary, but the IEA noted the lack of a national energy strategy which would help foster political and public consensus about proposed projects. The report repeatedly recommended that the government conduct an open, comprehensive review of its energy sector to assess all of Chile’s potential resources. Leading Chilean environmentalists have met with Minister Raineri and have urged him to undertake such a study. We believe that it is really in ENEL’s and Chile’s best interests to step back from their urge to rush approval for new projects, take a deep breath, and first take a hard look at the country’s energy future. Then they can consider whether investing in HidroAysén is truly the best way to go.
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* ENEL is the Italian energy company that owns the energy company Endesa Chile, which in turn owns 51% of HidroAysén. Colbún, a major Chilean energy company, owns the other 49%.