Latin America Climate, Energy and Environment News: 7/30- 8/3/2012


While the two companies who own the proposed Hidroaysén dam project in Patagonia, Endesa and Colbún, hope to resume the project before the end of the year, there remains significant uncertainties and challenges that could threaten the reactivation of the project. After two months since suspending the environmental impact assessment (EIA) for the project’s necessary transmission line, the companies are still waiting for signals from the government before going ahead with preparations, one of which is an electric road proposal that will likely be brought to Congress this month. Many believe that the government is in favor of an alternating current transmission line, which would not accommodate the Hidroaysén project.  Another uncertainty is how the government will handle its obligation to protect lands occupied by indigenous communities. The transmission line would cross several conflict areas with native tribes. A source from the companies says that it would not be sensible to advance the projects only to be stopped by the Supreme Court, which is what happened with the wind project, El Morro. Despite their decision to speak out about the lack of a national energy policy, there has been little change. For this reason, many engineers and consultants have stopped their work on Colbún’s recommendation (Diario Financiero 7/30/2012).

In a special meeting to discuss the electric road proposal that would cover 2,000 kilometers and traverse the country to support electric transmission, members voted 46-47 against an agreement that would have mandated the Ministries of the Environment and Energy to make arrangements for the state to assume the construction and financing of the overhead power line that would make way for the development of private projects (Diario Financiero 8/2/2012).

A study commissioned by Chile's national energy commission (CNE) estimates that interconnection between Chile’s central SIC and northern SING power grids could provide the country with between US$519 million and US$1.47 billion in economic benefits. Interconnection would prove more important if two planned mega hydro projects in Southern Chile - the 2.75GW HidroAysén dam and Energía Austral's 640MW Cuervo dam -do not go ahead. Without these projects, the economic benefits of a link between the grids would increase by US$135 million, the study found. Chile's mining industry has long advocated grid integration, as it would enable operations in the north to access power from hydroelectric and renewable sources on the SIC grid. The cost of integrating the two grids—US$1 billion by some estimates—has appeared uneconomical until now as the study shows that the benefits may outweigh the costs (Business News Americas 7/31/2012).

Given the need for environmental information for small and medium enterprises (SMEs), the Center for Management and Enhancement of Clean Development at the Catholic University of Valparaíso and the Secretariat for the Environment are launching a free online platform next August that will provide information to SMEs about certification processes and environmental parameters for development. The site will allow companies to compare themselves and provide support guidelines to incorporate sustainable practices and technologies.  The goal is to have 7,000 companies using the site by 2020 (Diario Financiero 7/25/2012). 

Costa Rica

The Costa Rican Institute of Electricity (ICE) is seeking offers from consultants to serve as the hydropower expert on a panel which will review the preparation of hydroelectric and geothermal energy projects. The hydropower expert will advise on studies of five proposed hydroelectric projects totaling 629.1 megawatts. The work is being performed under a program financed by the Inter-American Development Bank to confirm that the projects meet the expectations of the lender and to ensure that Costa Rica has adequate information and testing to guarantee expansion of the electricity sector to meet consumer demand (Costa Rica Star 8/1/2012). 

Data from the Costa Rican Oil Refinery (Recope) indicate that the Costa Rican Electricity Institute (ICE) consumed 93 percent less diesel and 38 percent less bunker fuel during the first half of 2012. The decrease is due to less demand from the country’s thermal power plants. Costa Rica has nine thermal power plants that feed on diesel and bunker fuel and generate 537 megawatts—20 percent of ICE’s installed capacity (El Financiero 7/30/2012).

During the second half of the year, the University of Costa Rica (UCR) will launch the new Energy Efficiency and Renewable Energy Technology Program that will be the foundation for the Costa Rican Energy Efficiency Center. The project stems from a Memorandum of Understanding signed in 2010 between the UCR, the Ministry of Environment and Energy (MINAE), Costa Rican Electricity Institute (ICE), Costa Rican Oil Refinery (Recope) and the U.S. Government. The center will engage in research and training, and promote the development and commercialization of energy efficient technologies (El Financiero 7/3/2012).


The Puebla Landfill Gas to Energy project is applying for Clean Development Mechanism (CDM) status with the UN Framework Convention on Climate Change (UNFCCC). The project will capture the methane landfill gas (LFG) released from the Chiltepeque landfill and use it to generate electricity. This mechanism will reduce CO2 emissions by an estimated 132,220 tons per year and have a generation capacity of 2.7 megawatts. The LFG engines, which will supply power to the national SIN grid, will be operational in October (Business News Americas 8/2/2012).

Construction has begun on the Santa Catarina wind farm in northern Mexico.  The 22 megawatt plant will sell energy under long-term power purchase agreements with municipalities around the nearby city of Monterrey (Business News Americas 8/1/2012).

Fresh off the election, it is still unclear whether or not President-Elect Nieto will take advantage of Mexico’s vast wind energy potential. Experts have estimated that the Isthmus of Tehuantepec in southern Mexico alone (which includes the state of Oaxaca, where the vast majority of Mexico’s operating wind farms are located) has enough wind resource to supply the entire electricity demand of Mexico.  The Mexican government has taken initial steps to incentivize wind generation; however, more wind-related initiatives are needed for wind energy to take up a noticeable share of the Mexican energy portfolio. Along with improving transmission line access, de-monopolizing power generation to allow renewable projects to compete with the state-owned utility company, CFE, would help spur significant new investment in wind energy projects in Mexico (North American Wind Power 8/2/2012).

This week’s news was compiled by Emily Jovais.

Note: The linked articles and excerpts in this post are provided for informational purposes only and do not necessarily reflect the views or positions of the Natural Resources Defense Council.