Pacific Hydro inaugurates US$450m renewable energy project in Chile
26 October 2011
Leading Australian renewable energy company Pacific Hydro inaugurated its 111MW Chacayes run-of-river hydro power plant in Chile’s Alto Cachapoal Valley, approximately 120km south of Santiago, at a formal ceremony last night.
The ceremony was attended by Chile’s Minister for Energy, Rodrigo Álvarez, and follows Pacific Hydro completion of the US$800 million La Higuera and La Confluencia hydro projects in Chile 12 months ago.
An investment of over US$450 million, the Chacayes run-of-river hydro power plant will contribute 111MW of installed capacity to Chile’s national grid, enough clean energy to supply more than 300,000 local homes. Its operations will abate over 340,000 tonnes of greenhouse gas pollution every year – the equivalent to taking more than 130,000 vehicles off the road.
Pacific Hydro chief executive officer Rob Grant said that the company has long term plans to invest almost US$2 billion in Chile as the country has proven to be serious about its renewable energy policies, providing a level of investment certainty that is vital for investors.
“Chacayes is the first of a number of run-of-river hydro power projects that Pacific Hydro plans to develop in Chile’s Alto Cachapoal Valley as part of our US$2 billion investment pipeline in the country,” said Mr Grant.
“These projects will add more than 600MW of renewable energy capacity to Chile’s national grid by 2020 when fully operational, avoiding more than 1.13 million tonnes of greenhouse gas pollution from entering the atmosphere every year.”
Chacayes is currently going through the registration process with the Kyoto Protocol’s Clean Development Mechanism (CDM) to issue and trade in carbon credits. Once registered, the plant is expected to create around 340,000 carbon credits annually, which can be traded on international carbon markets.
“The business case for our Chilean assets is supported by revenue gained from the sale of carbon credits in global markets,” said Mr Grant. “With the introduction of a price on carbon in Australia, we can expect to see increased clean energy production, regional jobs and significant investment opportunities over the coming decades.”
Unlike traditional hydro power generation, run-of river hydro power plants are environmentally friendly as they do not require large reservoirs and, instead, use the natural flow of a river to generate electricity, minimising any environmental or biodiversity impacts. All the water used to generate clean power is redirected back to the natural flow of the river.
“Chile has an impressive potential for renewable energy, particularly hydropower, which plays an increasingly important role in the growth and diversification of the country’s energy matrix to reduce its reliance on energy from fossil fuels,” said Mr Grant.
The plant is co-owned by Italian construction company Astaldi, which holds a 27.3% stake and was responsible for delivering the project under an Engineering Procurement and Construction agreement.
Pacific Hydro is currently awaiting environmental approval for the Nido de Águila run-of-river hydro power project that it plans to build in the same valley.
Image above (from left to right): Paolo Astaldi, Chaiman of Astaldi; Patricio Rey Sommer, O’Higgins Region Intendant; Rodrigo Alvarez, Chile’s Minister for Energy; Jose Antonio Valdes, Pacific Hydro Chile General Manager; Garry Weaven, Chairman of Pacific Hydro; Rob Grant, Pacific Hydro CEO.