In recent weeks, discussion around the controversial proposed HidroAysén mega-dam scheme has focused on two false dilemmas. First is the idea that Chile's future energy portfolio must depend on either large hydro or coal. Secondly, that President Sebastian Piñera will be forced to make a choice between environmental protection and business in creating his political agenda, which will affect his government’s decision on whether or not to approve the EIA for the HidroAysén’s proposal. These “either/or” discussions distort the public perception of Chile’s energy market and impede an open, honest dialogue about Chile’s energy future from taking place.
A professor at Pontificia Universidad Católica de Chile recently told Bloomberg News that “without HidroAysén, Chile would have to build more coal- fired generating plants.” President Piñera recently projected that the country’s electricity supply will need to double to almost 20,000 MW in the next ten years, a claim that HidroAysén and other big energy companies are using to justify aggressive development of big, conventional energy projects. Yet the source of this projection is not public. The most recent public government estimates for future energy consumption were made before the global economic downturn and the devastating earthquake this past February – both of which negatively affected electricity consumption. These projections have no reasonable basis and are far above recent growth trends in Chile. A 2009 technical study by international and Chilean experts proved these earlier government projections inaccurate. For example, the 2008 info stated that demand would grow by an average of 5.5% through 2025. In reality, it was -1.2% in 2008 and -0.2% in 2009.
This same study also showed that the total installed capacity of the energy projects Chile already has built, plus those in construction or under approval processes would, by 2025, more than meet the 2008 government projections, especially when modest non-conventional renewable energy* and efficiency growth are included – and without HidroAysén. Furthermore, using their own, more updated projections, the authors proved that by 2025 Chile could actually back out of 40% of the fossil fuel plants planned for construction. So, not only is HidroAysén irrelevant, but there is really no rush to approve it, or any other such enormous and impactful projects, like coal-fired plants.
Yet, proponents of both large hydro and big coal are pushing ahead with their projects – most recently illustrated by yesterday’s environmental approval of the Barrancones coal plant, proposed for construction next to the country’s Punta de Choros marine reserve. This October, HidroAysén’s environmental review process will continue. The “either/or” presentation of the coal/hydro choice actually seems to be more of a “both / and” situation. Meanwhile, the government does nothing to examine the realistic energy demand growth over the coming decades, and far too little to advance energy efficiency, which comes at a fraction of the cost of any other power supply option and represents the fastest, cheapest and cleanest energy supply option for Chile.
Instead of approving massive and destructive conventional energy plants, Chile has plenty of time to take a step back, have an honest and open review of all of its potential energy sources to create a coherent, strategic energy plan, as the International Energy Agency recommended in its 2009 Energy Policy Review. Such a process would widen the discourse from the narrow “coal or large hydro” vision to include the remarkable range of Chile’s abundant non-conventional renewable resources –solar, geothermal, small-hydro, bio-mass, wind, ocean and tidal power, as well as energy efficiency. The 2009 technical analysis concluded that by 2025, over 4,380 MW of Chile’s installed generation could come from non-conventional renewables and over 3,000 MW from energy efficiency – over 2.5 times HidroAysén’s proposed capacity. The right mix of these clean resources could mean that neither HidroAysén nor its coal counterparts are necessary and that Chilean could pay lower electric bills and save thousands of lives from improved air quality.
These numbers are not unrealistic. New data indicates that geothermal alone can contribute 1500 MW to Chile’s main grids, and that 50,000 homes will enjoy the benefits of solar panels by 2011. President Piñera just set a new goal to have 20% of generation come from non-conventional renewables by 2020. By doing so, he also illustrated the point that he can advance both environmental protection and economic growth in his policies. These are not mutually exclusive options, but, on the contrary, with the right set of policies, can be mutually reinforcing in a way that spurs economic growth and employment. Pursuing clean energy is not only a global moral imperative, to save the climate, but also a huge business opportunity.
Well known for creating the Tantauco reserve on Chiloe Island, Piñera touted his green credentials during the presidential elections last autumn. He also campaigned on the promises of growing the economy by 6% annually and creating 1 million jobs. Now, as his political agenda begins to take form, the discussion is, “which of these two sides will win out? Will the President’s policies support his environmental or his business priorities?”
This narrow scope ignores the very real fact that environmental protection can actually grow the economy. Wilderness conservation and eco-tourism, green buildings and smart growth, oil-import-reducing public transit, energy efficiency and non-conventional renewable energy are all sectors that, when fostered, will create jobs, improve public health and boost development in a clean, sustainable way. If Chile has an open, honest discussion about where the energy sector should go in the future, Chileans will likely realize that the false choices they see in the everyday media are misleading.
The government goal to double energy consumption in the next ten years will have huge economic and environmental costs that will be locked in for at least a generation. Chile can grow its economy faster, cleaner and smarter by ensuring that energy is used more intelligently in every sector. If President Piñera chooses to encourage his country to develop these clean and modern industries, he can accomplish his economic campaign promises and protect the environment at the same time. And in doing so, he can help Chile realize its potential as a clean energy leader in Latin America.
All without unnecessary, costly and destructive large hydro projects, such as HidroAysén, or large coal-fired power plants, like Barrancones.
*In Chile, the term “non-conventional renewable energy” is used to exclude hydro-electric plants above 20MW.