Hydro power generators in favor of changing hydro power law

Lifting the 20MW upper limit which classifies mini-hydro plants as non-conventional renewable energy (NCRE) projects would be welcomed by Chile’s biggest hydro power generators,

Rene Muga, managing director of industry association Generadoras de Chile, told BNamericas.

“One could make a good case for lifting this limit. Evidently it would be more efficient in terms of scales of economy to develop one project of say 40MW, making just one investment, rather than two separate projects of 20MW involving two separate transmission lines. This is something that could be revised,” Muga said.

Under existing Chilean regulations hydro projects over 20MW do not qualify as renewable and energy companies operating in the country have called on the government to amend this regulation.

They insist that reform will help the government achieve its target of having 20% of installed capacity on the gird provided by NCRE sources by 2020. Moreover, it will help utilities meet the law that 5% of their power must come from clean generation.

Some suggest amending the law will make it easier for the country’s biggest companies to construct larger scale projects, and crowd out smaller ones.

Chile’s energy minister Rodrigo Álvarez has not commented on the issue publicly, but former minister Ricardo Raineri told BNamericas that the government has considered redefining the 20MW limit.

Estimates suggest that Chile has untapped potential to develop new hydro projects in excess of 25GW, of which around 10GW could come from run-of-the-river and mini-hydro schemes.

In related news, Chilean industry association for small and mid-size hydro plants Apemec has announced that it has reached a trade agreement with two Norwegian lending institutions.

Under the agreement, Norwegian export associations GIEK and Eksportfinans will provide financing to Chilean firms looking to purchase technology from suppliers based in the Scandinavian country.

Repayments can be made in periods of up to 18 years, with potential resources of up to US$21mn available to Chilean firms, Apemec said in a press release.

Hydro power generators in favor of changing hydro power law

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