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Chilean policy making development of 2,750-MW HidroAysen uncertain

SANTIAGO, Chile 6/1/12 (PennWell) -- Chilean power company Colbun is wavering on its plan to build a transmission line for the country's 2,750-MW HidroAysen hydroelectric project, HydroWorld.com has learned.

Colbun's board of directors cited Chile's unclear regulations and public opposition as its main reasons for suspending transmission line impact studies, effectively stopping development of the US$3.2 billion complex from proceeding.

"As long as there is no national policy that counts with broad consensus and provides the energy guidelines that this country needs, Colbun feels the conditions to develop energy projects of this scale and complexity aren't met," the company says in a statement.

The HidroAysen project -- which actually includes five separate hydroelectric facilities -- would involve flooding around 6,000 hectares of land near Patagonia, in the far south of Chile.

HydroWorld.com reported in May 2011 that the project had received approval from the country's environmental regulators, but a Chilean court ordered the project's suspension five weeks later.

"It will be the mission of executive and legislative powers to reach a consensus on the regulatory and institutional changes necessary to make viable the generation and transmission projects Chile's economic and social development demands," Colbun's statement says.

Colbun and its partner, Spanish utility Endesa, say they are still committed to using Patagonian rivers to produce electricity, although development of HidroAysen is uncertain.

If constructed, HidroAysen would help Chile reach its goal of adding 8,000 MW of electrical capacity by 2020. Currently, the country's matrix has a capacity of 17,000 MW.

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