Benefits of the Project

What concrete benefits will the implementation of this project have for the Aysén Region?

Energía Austral is a company that is committed to the sustainable development of the Aysén Region. We make a distinction between the project’s general benefits, which are common to any infrastructure project, and those benefits that are unique to Energía Austral and are the result of its commitment to the community.

Benefits of the development of Energía Austral for the Region

• We create job opportunities. At its construction peak, Energía Austral will require an estimated 4,000 workers of whom between 600 and 800 will be hired from the Aysén Region.
• We boost economic activity in the Region and generate a pole of long-term development. We do so directly by acquiring services needed for the project’s development, such as transport, catering and hotel accommodation, and also indirectly through the introduction of new services, such as financial and academic institutions and tourism services, and, for example, through increased retail activity.
• We improve connectivity in the Region by building new roads and improving existing ones and by installing new bridges. We also plan to build new piers and ramps.
• We seek to promote effective formulas for providing the Aysén Region with more accessible and cheaper electricity. Through its Blanco project, Energía Austral will contribute between 12 and 15 MW to Aysén’s electricity system, infrastructure for which the company is already developing the engineering. If this is to mean cheaper electricity for the Region, the regulation in force will have to be modified and we have been active in seeking a solution through talks with national and regional authorities and other companies.
• We pay business licences and taxes in the Aysén municipal district.
• We create new opportunities for the tourism sector through the development of new attractions such as the Private Protected Natural Area around Lake Yulton.

Specific benefits of Energía Austral arising from its commitment to the community

• New training opportunities. A training programme offered in conjunction with the INACAP training institute specifically for the Aysén municipal district and tailored to its needs (trades, tourism and industrial fishing).
• Austral Film and Theatre cultural programme, designed primarily to increase access to the theatre and cinema for the inhabitants of Aysén.
• Social and community development through Social Investment Funds which support projects by social organisations that seek to improve people’s quality of life in areas such as education, sports, culture and entrepreneurship.
• Contribution to the quality of primary and secondary education through the School Library Implementation Programme, which seeks to encourage reading, and a programme of professional visits for pupils studying tourism at the Liceo Politécnico school in Puerto Aysén.
• Programme to promote competitiveness by building networks of producers in the Region.
• Support for micro-entrepreneurship through advice on use of the different platforms for the promotion of small and mid-sized businesses and specific programmes of training in entrepreneurship.

Environmental benefits

• Reactivation of forestry activity as a result of Energía Austral’s reforestation programme (creation of long-term semi-skilled and unskilled jobs, attraction of research centres and universities, etc.).
• Programmes of research into the biodiversity of the Aysén Region in the framework of environmental compensation programmes.
• Positioning of Chile as a clean country that seeks growth and development based on renewable energy which does not emit greenhouse gases and helps to mitigate climate change.
• Creation of protected areas and study of local ecosystems. A Private Protected Natural Area around Lake Yulton envisages sectors for preservation, conservation and public use and an area for the conservation of wetlands to the south of the Cóndor project, with a focus on research and environmental monitoring.
• Promotion of research into species of fauna and flora that are little known or have so far been little studied.

Safety of the project

Will Energía Austral’s dams be safe in an earthquake?

Yes, they will be safe. It is important to remember that, because Chile is a seismic and volcanic country, it has specialised government services that are expert in setting norms to minimise the danger of collapse during an earthquake.

Many of Chile’s hydroelectric plants are located close to a volcano or a geological fault including, for example, those on the Maule River (Colbún, Pehuenche, Isla, Cipreses, Curillinque, Loma Alta and San Ignacio), on the Biobío River (Pangue and Ralco) and on Lake Laja (Antuco, El Toro and Abanico). The engineering used in these plants ensures their installations’ safety and they have remained in normal operation after major earthquakes such as that of 27 February 2010.

Energía Austral complies with all Chilean norms and the highest international standards, providing us with the assurance that, in the event of an earthquake or the eruption of a volcano, its installations will not represent a danger for the population.

In conjunction with the local and national authorities, Energía Austral will, nonetheless, prepare the usual contingency plans with which all constructions of this type in Chile must comply.

Cuervo Plant

Will the Cuervo plant be built on a geological fault?

Geological studies carried out by the University of Chile for Cuervo’s Environmental Impact Study indicate that a fault zone known as Liquiñe-Ofqui exists in the area where the project will be located. However, it is important to point out that the Cuervo plant will be located not over the main fault but tertiary extensions, a situation common to other installations of this and other types in Chile. According to the international expert in dam design, Guillermo Noguera, who is an active member of the International Commission on Large Dams (ICOLD) and, through the EDIC engineering company, an advisor to the Cuervo project, “its installations are designed over an area where third-order extensions have been identified, not over the fault itself, and present-day engineering is perfectly capable of dealing with such situations… It should be remembered that, wherever a river exists, there is a situation of geological weakness and, in Chile, we have good examples of hydroelectric plants built where the conditions are not very different”.

Will the Cuervo Plant be safe in the case of a volcanic eruption or an earthquake?

Yes, it is designed to respond with total safety to the most extreme weather, seismic or volcanic events that could occur in the area. A precise understanding of the area’s conditions and how to address them from an engineering standpoint has been obtained through rigorous studies of the sector and its geology. “Given the geological conditions of the area of the dams, we did not, under Chilean regulation, which is among the strictest in the world, need to factor the risk of a severe earthquake into this project,” notes Carlos Andreani, project director of Dessau Chile, the engineering company responsible for Cuervo’s design. “But what did we do? We projected a scenario in which an earthquake of maximum intensity does, in fact, occur and took this scenario as our starting point for the project’s design,” explains the expert.

What preventive measures were taken into account when designing the Cuervo plant?

It is designed to respond with total safety to the most extreme weather, seismic or volcanic events that could occur in the area. According to Carlos Andreani, project director of the Dessau Chile engineering company responsible for Cuervo’s design, there were three key factors in its design:

1. Energía Austral requested that the most extreme scenarios be taken into account, regardless of the probability of their occurrence, in order to comply with the company’s own standards and ensure peace of mind for both the community and the authorities. This implied adopting standards higher even than those established in Chilean and international design guidelines.
2. A second factor was the requirement of an excellent level of information about the geological and geomorphological characteristics of the area of the dams in order to design them appropriately. Extensive research was carried by a team of scientists at the University of Chile‘s Geology Department as part of the project’s environmental evaluation as well as drilling campaigns and a series of specific geological studies.
3. A third factor in the dam’s design is the rock on which its foundations will be built. This is of an exceptional quality rarely seen in similar projects in Chile and is an enormous advantage as regards its stability.

What is the “special seismic joint” included in Cuervo’s design?

This is a concept, incorporated into the design of the Cuervo plant, involving modern technology that gives even greater stability to a gravity dam. It was also used in the modern Clyde dam in New Zealand, a country with intense seismic activity. This technology was developed by the Swiss engineer, Dr. Giovanni Lombardi, considered a “guru” of international engineering who participated in the project’s design concept and its subsequent review and approval.

Transmission line:

What will be the characteristics of the transmission line that will be built to transport electricity from the plants to the Central Interconnected Grid?

Given the sensitivity of this project, Energía Austral’s work is structured around the following four pillars in order to achieve a project of excellence:

1. Protected Areas and Native Forest: Avoidance of intervention in areas of great scenic value;
2. Social and Productive Interests: Efforts to reach agreements, maximisation of opportunities and permanent dialogue;
3. Accessibility: Equilibrium between existing and new routes; Facilities for access, operation and construction;
Security: Supply security; Geographic and weather considerations.

In general terms, the project envisages a collector system to pick up power from the three hydroelectric plants, a transformer station near the Cuervo plant, a direct-current line with a length of approximately 800 km, including an underwater segment, and a second transformer station on the northern part of the line.

The transmission line will transport the power generated to Chile’s Central Interconnected Grid (SIC) to which it will connect in the Los Ríos Region.

Hydroelectric Energy:

Why not generate the same power that will be produced by the hydroelectric plants in another way and, specifically, using alternative renewable sources?

Chile’s growing demand for energy means that there are opportunities for sources of all types. According to the National Energy Commission (www.cne.cl), Chile will need to double its installed capacity by 2020 in order to cover projected annual growth of around 6%. Energía Austral is proposing a clean energy project, using water force, that will contribute to supplying the country’s energy needs and have the following qualities:

• Water is a domestic resource and its large-scale use, therefore, reduces Chile’s dependence on imported fuels, such as coal and diesel, which are more polluting and whose price depends largely on external factors.
• Water is highly efficient in terms of power produced/area used. Generating the same quantity of electricity from eolic or solar sources would imply intervening larger areas and installing thousands of kilometres more of transmission lines to transport the power to consumption centres.
• Due to its great efficiency and low CO2 emissions, the generation of electricity from water is a clean technology.

For these reasons, we believe that we have an excellent project to offer Chile.

General Questions:

How many people will continue to work for Energía Austral once it starts operations?

During their construction phase, hydroelectric projects are very labour-intensive and, at the peak of its construction which is expected to take 56 months, Energía Austral will need an estimated 4,000 workers. The operation of hydroelectric plants, on the other hand, requires a limited number of workers and we estimate that Energía Austral will then have some 80 to 120 people working in the Region. In addition, a further 150 people will be required for the development of the forestry compensation plan, which will have a duration of at least 20 years.

What will Energía Austral do to conserve the way of life of the Aysén people?

One of Energía Austral’s objectives is to minimise its impact on the way of life of the inhabitants of Aysén. For this reason, it will seek to avoid using the town’s infrastructure during its construction phase.

To this end, it will install camps in the area of its worksites, with sufficient capacity and equipment to accommodate workers from outside the Region. These camps will have entertainment and rest areas, canteens and medical services. A shift system of 14 days’ work followed by 14 days off will allow workers to return to their places of residence during the latter period, thereby avoiding the impact of a sudden influx of workers.

In addition, for the transport of machinery, inputs and personnel, Energía Austral will prefer a system that combines its own roads and sea transport in order not to affect Puerto Aysén’s road infrastructure.

As regards healthcare, Energía Austral has an agreement with the Mutual de Seguridad, an occupational health and safety organisation, for the installation of an outpatient medical centre in Puerto Aysén that will attend workers and their families as well as the local community.

What concrete benefits will the implementation of this project have for the Aysén Region?

Energía Austral is a company that is committed to the sustainable development of the Aysén Region. We make a distinction between the project’s general benefits, which are common to any infrastructure project, and those benefits that are unique to Energía Austral and are the result of its commitment to the community.

Benefits of the development of Energía Austral for the Region

• We create job opportunities. At its construction peak, Energía Austral will require an estimated 4,000 workers of whom between 600 and 800 will be hired from the Aysén Region.
• We boost economic activity in the Region and generate a pole of long-term development. We do so directly by acquiring services needed for the project’s development, such as transport, catering and hotel accommodation, and also indirectly through the introduction of new services, such as financial and academic institutions and tourism services, and, for example, through increased retail activity.
• We improve connectivity in the Region by building new roads and improving existing ones and by installing new bridges. We also plan to build new piers and ramps.
• We seek to promote effective formulas for providing the Aysén Region with more accessible and cheaper electricity. Through its Blanco project, Energía Austral will contribute between 12 and 15 MW to Aysén’s electricity system, infrastructure for which the company is already developing the engineering. If this is to mean cheaper electricity for the Region, the regulation in force will have to be modified and we have been active in seeking a solution through talks with national and regional authorities and other companies.
• We pay business licences and taxes in the Aysén municipal district.
• We create new opportunities for the tourism sector through the development of new attractions such as the Private Protected Natural Area around Lake Yulton.

Specific benefits of Energía Austral arising from its commitment to the community

• New training opportunities. A training programme offered in conjunction with the INACAP training institute specifically for the Aysén municipal district and tailored to its needs (trades, tourism and industrial fishing).
• Austral Film and Theatre cultural programme, designed primarily to increase access to the theatre and cinema for the inhabitants of Aysén.
• Social and community development through Social Investment Funds which support projects by social organisations that seek to improve people’s quality of life in areas such as education, sports, culture and entrepreneurship.
• Contribution to the quality of primary and secondary education through the School Library Implementation Programme, which seeks to encourage reading, and a programme of professional visits for pupils studying tourism at the Liceo Politécnico school in Puerto Aysén.
• Programme to promote competitiveness by building networks of producers in the Region.
• Support for micro-entrepreneurship through advice on use of the different platforms for the promotion of small and mid-sized businesses and specific programmes of training in entrepreneurship.

Environmental benefits

• Reactivation of forestry activity as a result of Energía Austral’s reforestation programme (creation of long-term semi-skilled and unskilled jobs, attraction of research centres and universities, etc.).
• Programmes of research into the biodiversity of the Aysén Region in the framework of environmental compensation programmes.
• Positioning of Chile as a clean country that seeks growth and development based on renewable energy which does not emit greenhouse gases and helps to mitigate climate change.
• Creation of protected areas and study of local ecosystems. A Private Protected Natural Area around Lake Yulton envisages sectors for preservation, conservation and public use and an area for the conservation of wetlands to the south of the Cóndor project, with a focus on research and environmental monitoring.
• Promotion of research into species of fauna and flora that are little known or have so far been little studied.

How many people will continue to work for Energía Austral once it starts operations?

During their construction phase, hydroelectric projects are very labour-intensive and, at the peak of its construction which is expected to take 56 months, Energía Austral will need an estimated 4,000 workers. The operation of hydroelectric plants, on the other hand, requires a limited number of workers and we estimate that Energía Austral will then have some 80 to 120 people working in the Region. In addition, a further 150 people will be required for the development of the forestry compensation plan, which will have a duration of at least 20 years.

What will Energía Austral do to conserve the way of life of the Aysén people?

One of Energía Austral’s objectives is to minimise its impact on the way of life of the inhabitants of Aysén. For this reason, it will seek to avoid using the town’s infrastructure during its construction phase.

To this end, it will install camps in the area of its worksites, with sufficient capacity and equipment to accommodate workers from outside the Region. These camps will have entertainment and rest areas, canteens and medical services. A shift system of 14 days’ work followed by 14 days off will allow workers to return to their places of residence during the latter period, thereby avoiding the impact of a sudden influx of workers.

In addition, for the transport of machinery, inputs and personnel, Energía Austral will prefer a system that combines its own roads and sea transport in order not to affect Puerto Aysén’s road infrastructure.

As regards healthcare, Energía Austral has an agreement with the Mutual de Seguridad, an occupational health and safety organisation, for the installation of an outpatient medical centre in Puerto Aysén that will attend workers and their families as well as the local community.

Will Energía Austral’s dams be safe in an earthquake?

Yes, they will be safe. It is important to remember that, because Chile is a seismic and volcanic country, it has specialised government services that are expert in setting norms to minimise the danger of collapse during an earthquake.

Many of Chile’s hydroelectric plants are located close to a volcano or a geological fault including, for example, those on the Maule River (Colbún, Pehuenche, Isla, Cipreses, Curillinque, Loma Alta and San Ignacio), on the Biobío River (Pangue and Ralco) and on Lake Laja (Antuco, El Toro and Abanico). The engineering used in these plants ensures their installations’ safety and they have remained in normal operation after major earthquakes such as that of 27 February 2010.

Energía Austral complies with all Chilean norms and the highest international standards, providing us with the assurance that, in the event of an earthquake or the eruption of a volcano, its installations will not represent a danger for the population.

In conjunction with the local and national authorities, Energía Austral will, nonetheless, prepare the usual contingency plans with which all constructions of this type in Chile must comply.

What will be the characteristics of the transmission line that will be built to transport electricity from the plants to the Central Interconnected Grid?

Given the sensitivity of this project, Energía Austral’s work is structured around the following four pillars in order to achieve a project of excellence:

1. Protected Areas and Native Forest: Avoidance of intervention in areas of great scenic value;
2. Social and Productive Interests: Efforts to reach agreements, maximisation of opportunities and permanent dialogue;
3. Accessibility: Equilibrium between existing and new routes; Facilities for access, operation and construction;
4. Security: Supply security; Geographic and weather considerations.

In general terms, the project envisages a collector system to pick up power from the three hydroelectric plants, a transformer station near the Cuervo plant, a direct-current line with a length of approximately 800 km, including an underwater segment, and a second transformer station on the northern part of the line.

The transmission line will transport the power generated to Chile’s Central Interconnected Grid (SIC) to which it will connect in the Los Ríos Region.

Why not generate the same power that will be produced by the hydroelectric plants in another way and, specifically, using alternative renewable sources?

Chile’s growing demand for energy means that there are opportunities for sources of all types. According to the National Energy Commission (www.cne.cl), Chile will need to double its installed capacity by 2020 in order to cover projected annual growth of around 6%. Energía Austral is proposing a clean energy project, using water force, that will contribute to supplying the country’s energy needs and have the following qualities:

• Water is a domestic resource and its large-scale use, therefore, reduces Chile’s dependence on imported fuels, such as coal and diesel, which are more polluting and whose price depends largely on external factors.
• Water is highly efficient in terms of power produced/area used. Generating the same quantity of electricity from eolic or solar sources would imply intervening larger areas and installing thousands of kilometres more of transmission lines to transport the power to consumption centres.
• Due to its great efficiency and low CO2 emissions, the generation of electricity from water is a clean technology.

For these reasons, we believe that we have an excellent project to offer Chile.