Building the Chacayes Hydropower Plant and Contributing to Cleaner Energy in Chile

The Chacayes plant is able to generate 560 GWh of electricity each year, which is expected to supply clean energy to more than 300,000 homes.

In addition, in 2012 the project was approved by the United Nations Framework Convention on Climate Change to issue and trade in carbon credits under the Kyoto Protocol's Clean Development Mechanism (CDM). Renewable energy generation at Chacayes will abate 357,000 tonnes of greenhouse has pollution every year — the equivalent of taking more than 155,000 vehicles off the road.

Located in Chile's sixth region, Chacayes is the first of a number of run-of-river hydropower projects Pacific Hydro plans to develop in the Alto Cachapoal Valley, where it has water rights to develop up to 600 MW of hydro capacity. By 2020, Pacific Hydro expects to invest about US$2 billion in the country to help meet its increasing demand for electricity and contribute to its economic growth and to the sustainable development of local communities.

In this same valley, the company operates the 31-MW Coya and 45-MW Pangal run-of-river plants, which were acquired from Chile's state-owned copper mining company, Codelco, in 2004. Australia-based Pacific Hydro established a presence in Chile in 2002 as part of a strategic move into South America. Since 2010, Pacific Hydro has also been operating the 155-MW La Higuera and 158-MW La Confluencia run-of-river plants in the nearby Tinguiririca Valley, through a joint venture that gives Pacific Hydro 50 percent ownership of the two hydro facilities. The company's partner in this development was Norwegian developer SN Power.

"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, delivering environmentally friendly energy at competitive prices," observed Pacific Hydro Chief Executive Officer Rob Grant.

Energy being generated at the Chacayes plant is sold to electricity distributor Chilectra under a long-term power purchase agreement.

Background on the Project

The Chacayes facility is located in a dramatic setting in the Andes Mountains, about 10 km upstream from Pacific Hydro's Coya project.

Pacific Hydro began qualifying builders for the Chacayes project in June 2007. The company awarded a US$282 million contract to Italy's Astaldi Group in September 2008, and former Chilean president Michelle Bachelet joined Pacific Hydro to lay the first stone at Chacayes, on the Cachapoal River, in October 2008.

In May 2009, Astaldi agreed to take a 27.3 percent share in the project, which meant the company would help finance the development and be responsible for delivering the project under an engineering, procurement and construction contract agreement. And in August 2010, the Alto Cachopoal River was diverted to flow through the partially completed main diversion structure.

The Chacayes project consists of: two intakes, one each on the Cachapoal and Cipreses Rivers; 7 km of canal; four tunnels ranging in length from 280 meters to 2.45 km; a 880,000 m³ reregulation pond; and a two-unit surface powerhouse. Astaldi and local Chilean contractor Fe Grande, working as consortium Constructora Astaldi Fe Grande Cahcapoal Ltda., built the project. Andritz Hydro supplied the electromechanical equipment for the facility, including two turbine-generating units.

Hatch, headquartered in Ontario, Canada, prepared the basic design and definition designs for the project, as well as the owner's technical requirements, including drawings and specifications for civil structures and mechanical and electrical systems. The company also acted as owner's engineer, responsible for reviewing the EPC contractor's detailed civil design and drawings and equipment supply.

Sustainable Development

Throughout the development, construction and, now, operating phases of the Chacayes hydro plant, Pacific Hydro focused on sustainable development. This focus has created positive outcomes for surrounding communities, the environment and the health and safety of every worker directly or indirectly involved in the project.

"At the peak of its construction, the Chacayes hydro created approximately 2,000 direct and 3,000 indirect jobs," explains Grant. "We also developed an annual training program for the community and created an ongoing community fund called Creciendo Juntos [Growing Together] to sponsor projects in education, health and the welfare of the local communities."

The Chacayes hydroelectric facility also received the "Environmental Initiative of the Year" Award at the International Tunnelling Awards 2011 in Hong Kong. This award is hosted by the UK's New Civil Engineer and Ground Engineering magazines and recognizes the innovative environmental initiatives implemented during construction of Chacayes. "This award recognizes the sustainable development measures we put in place in the early design stages of the project to comply not only with Chilean environmental regulation and our own Health, Safety and Sustainability policy, but also with the Equator Principles and the Kyoto Protocol Clean Development Mechanism eligibility requirements," says Grant.

The innovative environmental initiatives implemented during development of the Chacayes project represent an investment of more than US$10 million and include:

• Use of two low-height intakes, instead of large dams, in line with the Kyoto Protocol standards;
• Tunnelling using a tunnel boring machine, instead of drilling and blasting, to reduce noise and disturbances, thus minimizing environmental impacts;
• Continuous monitoring of the native fauna during plant construction and operations;
• Implementation of a Community Management Plan to anticipate, avoid or mitigate social impacts and manage complaints in neighbouring rural and urban areas, such as the towns of Rancagua and Coya and the communities of Chacayes, Pangal, Termas de Cauquenes and Perales;
• Development of a nursery managed by community members for reforestation, which created training and employment opportunities and allowed the production of about 400,000 native plants and trees;
• Construction of a 66 kV power line that allowed the supply of electricity throughout the construction stage from another run-of-river project and minimize the use of diesel generators;
• Construction of new access roads and widening of an existing bridge that improved access to the remote region where project activity took place;
• Construction of a 2.6 km-long tunnel instead of a free-flow canal to connect the two hydro project intakes, as well as use of a rubber inflatable dam that is more environmentally friendly, changes that added US$5 million to the total cost to build the Chacayes project; and
• Painting of some of the transmission line towers a shade of green similar to that of the surrounding vegetation to mitigate visual impacts.

Post-operational Achievements

Due in part to the wide variety of measures undertaken during construction of the Chacayes plant to minimize environmental impacts, organizers of the POWER-GEN International and Renewable Energy World North America events awarded the facility their Hydro Project of the Year Award. The renewable energy Projects of the Year awards highlight the industry's best achievements and recognize innovation during the construction of renewable energy projects and the sustainability and environmental features of those projects.

Pacific Hydro will use the experience gained during planning and construction of Chacayes to develop more renewable energy projects that take into consideration the communities, environment, sustainability and innovation. These projects will be developed in the O'Higgins Region of Chile, where the company holds water rights for the development of an additional 500 MW of hydropower projects.