A Major Victory in the Fight to Protect Patagonia as HidroAysén Disappears from Investor List

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A major victory in the fight to protect Chile’s rugged Patagonia came today when media reported that Endesa Chile, the majority owner of HidroAysén, has removed the massive hydroelectric proposal from the list of active projects it presented to investors at the end of 2013. Citing legal challenges and uncertainty surround the dams’ transmission line as reasons for this exclusion, Endesa Chile has finally joined its partner in the joint venture, the Chilean energy company Colbún—as well as the majority of Chilean citizens—in realizing that the $10 billion project simply does not make sense. Although HidroAysén is not dead, this news is a significant step wards that end, and is an important sign that the voices of Chileans who strongly oppose the project are being heard loud and clear.

Chile’s biggest newspaper is reporting that Endesa Chile, which owns 51 percent of HidroAysén, did not include the mega-dam proposal in its list of active development projects in Latin America, and cites “sources close to the company” as confirming the report. The company explained its pulling of the project from that list by pointing to the uncertainty surrounding the construction of the project’s needed 1,912 kilometer long transmission line, as well the pending review of over thirty legal challenges by Chile’s Committee of Ministers –the highest administrative authority in Chile.

In doing so, Endesa Chile joined a line of other prominent decision makers who have acknowledged that HidroAysén is not in a viable position to be the best way forward for Chile. In May 2012, Colbún (which owns 49 percent of the project) unilaterally halted all work on the project from its side, citing a lack of public and political consensus in support of the dams. Throughout the 2013 presidential campaigns, HidroAysén was a ballot box issue, with six of the nine candidates in the first round pledging to not allow the project. The president-elect, former President Michelle Bachelet, said repeatedly that the project is “not viable” and recently that it “will not have our support.”

                          the Baker River, site of two of HidroAysen's planned five dams

These high-level announcements are an echo of the voices of the majority of Chileans. Two separate public opinion polls conducted last year demonstrated that most of the country’s citizens remain firmly against HidroAysén. A poll of communities in the region of Aysén, where the dams are proposed to be built, showed that 87.2 percent of inhabitants are against the project. A national poll released in early December showed that 62.9 percent of Chileans are against HidroAysén.

Proponents of HidroAysén have historically said that the dams will be necessary to help Chile meet its future energy needs, particularly the energy-hungry mining sector in the northern part of the country. Yet the growth of the non-conventional renewable energy* sector over the past few years is putting that notion to rest. With solar, wind and biomass projects operating and firmly underway, and great potential for geothermal power, plus an un-tapped resource in energy efficiency, it has become more and more clear that HidroAysén is simply not the best way forward for Chile. As more of these sustainable energy options come on line over the coming years, the less HidroAysén – and similarly destructive dam projects in Patagonia tethered to demand centers by incredibly long transmission lines – will make economic sense.

Although Endesa Chile’s removal of HidroAysén from its list of active development projects in Latin America is a great step in the right direction, there are still opportunities for HidroAysén to make a comeback. Endesa Chile is reported to still have the project is still in its long-term pipeline, and if the uncertainties surrounding the project are removed, HidroAysén could be reactivated.

For the time being, however, all who have fought to protect Chile’s stunning Patagonia from large-scale industrial development—embodied by HidroAysén—should celebrate this great start to a new year.

*In Chile, the term “non-conventional renewable energy” is used to exclude large hydroelectric power (hydro over 20MW of installed capacity) from the category.