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GDF Suez: Government of Chile should amend hydro project classifications

Chilean authorities should reform existing classifications for run-of-river hydropower projects which prevent bigger size schemes being recognized as renewable, according to Jan Flachet, regional CEO of power giant IPR-GDF Suez.

"As long as big dams, no matter the size, are not on a reservoir, they should be classed as renewable as well. They are not disturbing the course of the water, and should be considered fully environmentally friendly," the CEO told Business News Americas.

Roughly half of Chile's existing hydro capacity is from run-of-river plants, though under regulations they are too big to be classed as renewable.

Current energy laws stipulate that hydro projects over 20 MW in size do not qualify as renewable, leading several leading energy companies operating in the country to call on the government to amend the regulation. Firms say that such a move would help the country achieve its goal of achieving 20 percent of installed capacity from renewables sources by 2020.

"It doesn't really make sense to make an arbitrary limit, for example, that 30 MW counts, while 31 MW doesn't. It is all renewable," Flachet added.

According to Flachet, hydro power will continue to play an important role in Chilean power generation, despite the ongoing issues with its use.

More than 50 percent of the installed capacity on Chile's central SIC power grid comes from the country's dams, though low hydrology brought on by drought-like conditions has forced the government to restrict hydro output to conserve water for later in the year.

"We think that in Chile hydro still has big potential. We will probably concentrate more on hydro because it is financially more efficient," Flachet said.

GDF is currently working on the 35-MW Laja run-of-the-river hydro plant in Chile's region VIII. Flachet confirmed that the US$112 million project is on schedule to come online next year.

A second plant of similar capacity is also planned for the same river, with construction anticipated to start following completion of the first plant. Both facilities will be managed by IPR-GDF Suez subsidiary Eolica Monte Redondo.

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