Are you ready to live in the dark?
Electrical power plants are trying to survive the unexpected change in water level due to climate change. Will they be able to adjust their operations before we are in the total darkness?
There are four interconnected systems that supply electrical power to Chile. The SIC (Central Interconnected System) is the largest one, with 80% of the installed capacity in the country. While sources of energy in the system are quite diversified, 39.21% of the energy comes from water, through hydroelectric power plants and hydro run-of-the-river power plants.[1]
Multiple companies provide energy to SIC, being Endesa Group, AES Gener and Colbun the bigger ones. Colbun not only holds 21% of the market share of installed capacity, but has also been recognized as one of the leading companies in climate change in Chile, given the incorporation of this issue as an essential part of its business.
The effects of climate change on the available supply of water, have become clear in recent decades. A CONAMA (National Environment Commission of Chile) study, shows that variability in rainfall patterns have resulted in decreases in river flows and accumulated snow. This is compounded by higher temperatures, that affects snow melting, and an increase in the height at which the isotherm 0°C is located, which reduces the available surface for snow to accumulate.[2] If electric generation companies like Colbun don’t adapt to climate change, we may not be able to have light during nights, we will be living in the dark.
To address the challenges posed by climate change, Colbun has adapted its operational model in two edges: (1) diversifying its energy matrix and (2) optimizing water resources.[3]
Diversification of the energy matrix
Since Colbun was established as a company in 1985 and until 1999, all the energy they produced came from hydroelectric power plants. However, given the rainfall and water flow volatilities, the company decided to diversify its production to other types of energy, to ensure a stable supply of energy to SIC.
Today the company has 49% of its installed capacity in hydroelectric plants, and 51% in thermoelectric power plants based on gas, diesel and coal.
Optimization of water resources
In recent years, the company has focused its efforts on the innovation of its operating system, to promote energy efficiency and sustainable use of the available water. For example, the company has built what is known as “mini hydro run-of-the-river power plants” to take advantage of energy remnants of water flows. In addition, the company developed a system of automatic control of wells to monitor and optimize the use of water in them. The company has also installed plants to process the remains of water in cooling towers, which allows to reuse water and thereby reduce the total demand for this resource.
Adaptation to climate change has also affected the long-term investment decisions of the company. To ensure the sustainable use of natural resources, Colbun has developed most of the new hydropower plants in series, to reuse water that was already used by other plants of the company located downstream.
What else can Colbun do?
While the company has already begun to adapt its operational model to the challenges posed by climate change, there are other initiatives that can be implemented to ensure the long-term sustainability of the company. The company can (1) continue diversifying its energy matrix and (2) replace fossil fuels with biomass in the thermoelectric generation and (3) further optimize its hydroelectric plants.
The biggest problem of having only hydroelectric and thermoelectric plants, is that both use water in their operation, and are affected by the lower availability of this resource. Colbun could analyze investing in other energies that don’t require water to function, such as wind, solar or geothermal energy. Also, thermoelectric plants operated by Colbun are fueled with fossil fuels (coal, diesel and gas). Replacing this fuels with biomass decrease the amount of water needed in the refrigeration towers, for a more efficient use of the available water.[4] Finally, Colbun must continue to seek for operational efficiencies to adapt to climate change. The Company may try to increase the storage capacity of the smaller hydroelectrical plants, to increase their operational flexibility.[5]
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[1] Capacidad instalada – Energía Abierta | Comisión Nacional de Energía. 2016. Capacidad instalada – Energía Abierta | Comisión Nacional de Energía. [ONLINE] Available at: http://energiaabierta.cne.cl/visualizaciones/capacidad-instalada/. [Accessed 03 November 2016].
[2] Departamento de Geofísica Facultad de Ciencias. Físicas y Matemáticas Universidad de Chile. 2006. ESTUDIO DE LA VARIABILIDAD CLIMÁTICA EN CHILE PARA EL SIGLO XXI . [ONLINE] Available at: http://dgf.uchile.cl/PRECIS/articles-39442_pdf_Estudio_texto.pdf. [Accessed 3 November 2016].
[3] Colbún – Energía es Futuro. 2016. Memoria Integrada 2015 Colbun S.A. [ONLINE] Available at: http://www.colbun.cl/wordpress-uploads/COLBUN-MEMORIA-ANUAL-INTEGRADA-2015EEFF.pdf. [Accessed 3 November 2016].
[4] Miguel Ángel Criado. 2016. El cambio climático amenaza la generación de electricidad | Ciencia | EL PAÍS. [ONLINE] Available at: http://elpais.com/elpais/2016/01/04/ciencia/1451921409_301489.html. [Accessed 04 November 2016].
[5] Hydropower | Center for Climate and Energy Solutions. 2016. Hydropower | Center for Climate and Energy Solutions. [ONLINE] Available at: http://www.c2es.org/technology/factsheet/hydropower. [Accessed 04 November 2016].
As Chile’s largest producer of power is of unmistakable importance to the continued development of Chile. Given the changes in rainfall patterns and river flows that you highlighted in your post, I can also see that Colbun is a critical player in the shifting energy landscape of Chile. Your assessment that by diversifying their energy production portfolio they can further hedge themselves against climate change is also important. I do, however, have several critiques of the paths forward you have proposed and I hope they spark further interest and research on this incredibly important topic.
• I would argue that, while water flows on rivers has changed, the greater impact to hydroelectric dams is the silting that occurs in the upstream reservoirs, decreasing their capacity and increasing the chance of flood. Is Colbun taking any action to address this issue?
• Biomass is an inefficient fuel, as it often requires energy of several multiples higher than it provides just to transport to energy production facilities, depending on the energy density of the material and other assumptions. This form of fuel is typically only viable in small-scale energy production serving regions with access to dense biomass. Thermoelectric plants are most often optimized through the use of liquid natural gas, the cleanest burning of the traditional fossil fuels.
Great job in highlighting the issues that Colbun is facing, as they are similar to those faced by many other large-scale energy providers around the world.
I have lived in the dark, and so unsurprisingly the answer is a definite NO! In Ghana, due to huge discrepancies between the supply and demand for electricity, the Electric Company of Ghana (“ECG”) is forced to ration electricity. A hydroelectric dam built to sustain 5 million people currently powers a country of 26 million. Consumers will either have electricity for 12 hours of the day or 12 hours of the night, and will usually be clueless in regards to the schedule. The problem Colbun faces is huge and it is very inspiring to see that they have been able to implement some steps to address the challenges posed by climate change. I hope Ghana can emulate some of these steps. I am also interested to learn more about how receptive people in Chile have been to the diversifying the energy mix. From your post, it looks like 51% of energy now comes from thermoelectric power plants. What are some of the challenges Chile faced in adopting these other forms of energy? Also, are these other forms of fuel more efficient?
It is very interesting how some of the ways in which we have tried to decrease our dependence on fossil fuels are now being irrelevant due to climate change, some of which is caused by the use of those same energy sources! I had not thought previously about how alternative energy sources such as this may be affected by climate change and it makes me wonder what other impact climate change will have on our energy supplies. It would be interesting to consider how changes in temperatures, weather patterns, etc. will impact other parts of the energy industry, and how people are looking to deal with those changes. Possibly adaptations could be shared across industries as companies work to deal in the changing environment.