Transmission just tip of iceberg in Chilean power cut

Although the March 21 power cut that affected seven regions of Chile was caused by a transmission fault, the country's SIC central grid was especially vulnerable that day, according to an official report cited by online news service Emol. The problem was caused by a combination of gas shortages, generation faults and transmission maintenance, the report said. The report, sent by the central grid's dispatch center CDEC-SIC to regulator SEC, said that a 500kV line belonging to transmission concessionaire Transelec between Ancoa and Charrúa in the south of the country was taken out of service that day from 8am to 6pm for maintenance. At 3pm the same day, generator Endesa's 350MW San Isidro plant stopped because it ran out of gas because of Argentina's export restrictions. Through a swap arrangement with Endesa's Central Costanera plant in Argentina, Endesa had been receiving Costanera's gas in exchange for buying diesel for Costanera to operate. The swap was suspended on March 18 because of uncertainties over the next delivery of diesel to Costanera, and although San Isidro itself could in theory use diesel, Endesa was reportedly against the idea because it had not received technical recommendations to do so. Generator AES Gener had taken its 338MW Ventanas plant off line on the night of March 20 because of problems with the cooling system, and so to compensate the power shortfall once San Isidro went down, CDEC-SIC asked Transelec to halt the maintenance and reconnect the Ancoa-Charrúa line to bring power from the south to the load center of central Chile. But in doing so, technicians did not remove a security device, and when the line was switched on, it short-circuited. The wisdom of carrying out transmission maintenance on a working day has been questioned and the need for better coordination between sector players highlighted. Sector players were reported as saying in Thursday's El Mercurio, the hard copy version of Emol, that if there is no rain in the next six weeks power will have to be rationed. The government was adamant that the March 21 fault was not related to gas shortages, which in view of the CDEC-SIC report is perhaps not entirely true, and has been equally emphatic in saying that power will not be rationed. The outlook is hardly optimistic. Economic growth and a lack of rain in Argentina mean that its thermoelectric plants will be burning more gas and therefore restricting even further the amounts available for export to Chile. Despite an increase in gas drilling in Argentina, a fuel swap arrangement with Venezuela, electricity imports from Brazil, gas import agreements with Bolivia and domestic gas pipeline expansion plans, gas pipelines in Argentina remain saturated. There are also diesel and fuel oil storage constraints, while low water levels in southern Brazil could restrict future power imports to Argentina, and any gas imports from Bolivia are subject to political uncertainty. Added to the above is arguably the main factor in Argentina's energy crunch - a lack of investment. There are no signs of that changing much, and in a recent report Merrill Lynch said gas exports would remain restricted this year and beyond, and Argentina's own power sector could reach crisis levels in 2007.