Chile aims for 100 new mini-hydro plants by 2018

Unlike its nearest South American neighbors, Chile's domestic fossil fuel reserves are negligible.

The country must therefore take better advantage of its ample water resources to produce electric power, according to the energy ministry's head of project management, Danilo Núñez.

"The diagnosis is quite clear," Núñez said at the Expo Apemec mini-hydro trade fair in capital Santiago, stating that hydroelectricity accounted for 70% of the country's power generation 20 years ago, compared to 37% today.

To reverse the trend, energy minister Máximo Pacheco (pictured, second from right) and Apemec – Chile's association of small and medium-sized hydroelectric generators - have a goal of adding 100 new mini-hydro plants to the national energy mix by the end of President Michelle Bachelet's term in 2018.

In Chile, mini-hydros are considered to be plants with installed capacity under 20MW.

Núñez said that Chile's mini-hydro project pipeline currently stands at 130 plants, the vast majority with installed capacity of under 5MW. The 130 include nine power stations that entered operation this year; 10 projects under construction; 50 that have secured environmental approval; 16 currently in the approval process; and 45 in prefeasibility.

As an example to follow, Núñez cited Germany, which boasts 300 operational mini-hydro plants with capacities between 1MW and 10MW. By comparison, Chile currently has 73 mini-hydro plants in operation.

Principal barriers to mini-hydro plants in Chile include permitting delays, access to financing and community opposition, Núñez said, all problems that the government is working on addressing through legislative and regulatory reforms.

Lack of sufficient transmission infrastructure is an important barrier as well, he said, explaining that mini-hydro developers often must build their own transmission lines, making financing less attractive.

With regard to local opposition, Núñez said that communities often do not differentiate between small, medium and large hydropower projects and their respective impacts on the environment.

The ministry is working with Chile's national irrigation commission CNR and water department DGA on measures to facilitate the acquisition of water rights for mini-hydro developers, he added.

State development agency Corfo, in collaboration with German development bank KfW, will make available in the second half of this year financing for non-conventional renewable energy projects, which Núñez said will benefit the mini-hydro sector.