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Medellín Metro News 132

Published in Medellín Metro News Written by July 11 2018 0

Investment promotion agency Agencia de Cooperacion e Inversion de Medellin y el Area Metropolitana (ACI) announced July 10 that besides the under-construction, 220-room Hilton luxury hotel on Las Palmas and the recently completed, US$50 million Marriott hotel in El Poblado in Medellin, Antioquia soon will host another 34 new hotel projects in 2019.

Citing statistics from Colombian hotel trade association Cotelco, ACI explained that “Medellín went from having 176 hotels with 7,370 rooms in 2016, to 197 hotels and 8,628 rooms in 2018. By 2019, 34 new projects will be undertaken in the territory of Antioquia.”

“We are the department [Antioquia] with the most investment -- COP$674 billion [US$235 million] --in the construction of hotels in Colombia, directly generating more employment, as 56,640 workers in Medellín are employed by hotels,” added Johana Martínez, executive director of Cotelco’s Antioquia-Chocó chapter.

Among the new and under-construction hotels in Medellín: Decameron, Hilton, Travelers, Wyndham, Atton (US$30 million), Viaggio, La Quinta Inn, Marriott, Metro Hotel, City Express (US$42 million), Click Clack and Blue Doors, according to ACI.

Citing Colombian SITUR tourism-agency figures, ACI added that “the accelerated growth in hotels responds mainly to the demand for the sustained increase in the arrival of travelers to the city, with 735,570 visitors in 2017, of which 274,693 were foreigners, an increase of 4.8% over 2016.”

“Tourist growth and the great attraction for foreign investment offered by Medellín -- part of a city-region strategy -- are key elements for the September 24-25, 2018, realization of SAHIC [South American Hotel and Tourism Investment conference] here, one of the most important international events in the sector,” the agency added.

Besides business and convention tourism growth here, eco-tourism is also growing in Antioquia, according to Federico Guerra Hoyos, Secretary of Productivity and Competitiveness for the departmental government of Antioquia.

Antioquia “is one of the places with the greatest number of bird species in the world. All this natural beauty is very close to villages with hotel infrastructure, which, added to the host talent of the residents, make our territory an unforgettable place and a unique sensation,” Guerra added.

Published in Medellín Metro News Written by July 10 2018 0

Medellin’s “Metro” public transit agency announced July 9 that Wall Street bond rater Fitch just upgraded Metro’s long-term debt rating to “AAA (col)” from “AA + (col)” while the short-term rating remains at a relatively strong “F1 + (col).”

“In both cases, these are the highest ratings that [Fitch] gives to Colombian companies,” according to Metro, which operates a mainly electric-powered railcar, aerial-tram and surface-tram system, as well as a natural-gas-fueled bus rapid transit (BRT) system in the Medellin metropolitan area.

The ratings indicate that “Medellín Metro has been characterized by solid management and administration,” supported by “income legitimacy, operational risk, financial profile and asymmetric added risk,” according to the agency.

“In the case of the long-term rating, Fitch Ratings raised the rating to 'AAA (col)' from 'AA + (col)' with a stable outlook, which is assigned to issuers or obligations with the lowest expectation of default risk in relation to all other issuers or obligations in the same country. The outlook indicates that it is unlikely that the rating will change in a period of between one and two years.

“In the case of the short-term rating, Fitch affirmed the 'F1 + (col)' rating it had given in its previous review, also with a stable outlook, which is assigned to the lowest default risk in relation to others in the same country. When a + sign is added, as in the case of the Medellín Metro, this indicates that the liquidity profile is particularly strong.

“The legitimacy of revenues refers to the capacity to increase them and the competitive position in the sector, a factor that was considered strong due to the existence of a strategic objective that establishes that by 2020, 10% of revenues must come from different sources to the rate.

“Operational risk is considered as a factor in the medium range because Metro adequately identifies its costs, which allows it to have a certain degree of flexibility for [containing] them.

“Regarding the financial profile, this is considered as a strong range since the EBITDA [earnings before interest, taxes, depreciation and amortization] generation is robust and its margins, although they show the start-up of greater services, remain relatively stable. Likewise, the liquidity position is good due to the existence of adequate levels of cash and liquid investments of free destination. Finally, Fitch highlights the conservative management of investment portfolios, which have a low risk profile,” Metro added.

Published in Medellín Metro News Written by June 28 2018 0

Colombia’s national development agency (Financiera de Desarrollo Nacional, FDN) announced June 27 that it approved another COP$600 billion (US$204 million) in debt finance for the crucial “Mar 1” highway project linking Medellin to current and future Atlantic ports in Antioquia and indirectly to the Pacific port of Buenaventura.

The latest debt approval means that definitive financial close on the project is expected around September 2018, according to FDN. The new senior debt credit carries a term of up to 18 years, the agency added.

“The financing of the project comprises a structure with three tranches, two tranches in pesos -- one in pesos and one in UVR [inflation-adjusted pesos] -- and one tranche in U.S. dollars,” according to FDN.

“Thus, the total debt of the project amounts to COP2.04 trillion [US$693 million], of which COP1.48 trillion [US$502 million] is structured in pesos and COP$560 billion [US$190 million] are denominated in dollars. With this loan, the total participation of the FDN represents 29.5% of the total debt of the project,” according to the agency

The project consists of upgrading and operating the existing highway between Santa Fe de Antioquia and Bolombolo (71 kilometers), constructing and operating a new divided highway between Medellin and Santa Fe de Antioquia (43 kilometers), construction and operation of a parallel tunnel to the existing “Tunel al Occidente” west of Medellin (4.6 kilometers) and the construction of 39 bridges, according to FDN.

The project also will connect with three other “fourth generation” (4G) highway projects including “Mar 2” and “Conexión Pacífico 2,” the latter of which would drastically improve freight traffic between Medellin and the Pacific port of Buenaventura.

Partners in the “Mar 1” project including Austrian construction company Strabag (Strabag AG Switzerland (37%), Strabag SAS (0.5%) and Strabag AG Austria; Sacyr (Sacyr Concesiones Colombia (37.5%) and Sacyr Concesiones Participadas SL; and the Colombian company Concay, SA (25%).

Published in Medellín Metro News Written by June 19 2018 0

In a June 20 press conference, Medellin-based multinational electric power giant EPM announced that it now foresees the likelihood of overcoming the current engineering crisis at its US$5 billion, 2.4-gigawatt “Hidroituango” hydroelectric project in Antioquia by around October 2018.

What's more, EPM revealed in a separate filing June 18 that Hidroituango construction would be completed by around 2021 -- possibly a year later than initially planned --  assuming that current engineering and geology challenges facing the dam and tunnel works are overcome.

EPM general manager Jorge Londoño de la Cuesta explained that thanks to falling water levels in the Cauca River, EPM probably can move in the next months to close permanently the right diversion tunnel that had collapsed and burst last month, forcing EPM to redirect Cauca River waters temporarily through the dam's machine house. 

Since EPM is likely to have completed raising and reinforcing the dam to at least 418 meters above sea level over the coming weeks, it's now become possible to forecast closing another crucial tunnel -- that is, the tunnel to the machine room -- hence enabling Cauca River waters to flow safely over the engineered spillway at 401 meters above sea level, rather than through problematic tunnels. 

Bottom line: The currently evacutated downstream populations in Puerto Valdivia could return to their homes, probably around October -- meaning the crisis is nearly over.

In the filing (see: https://www.superfinanciera.gov.co/publicacion/informacion-relevante-61446, listing under "Empresas Publicas de Medellin ESP,"), EPM points out that “until today [June 18] the technical information available allows us to estimate that the main structures of the Ituango hydroelectric project -- dam, landfill and powerhouse -- have not been significantly affected, so the completion of the project is considered viable, which we believe could be carried out within an estimated period of three years. But there is still uncertainty due to the fact that several of the activities necessary to achieve this objective are in the process of definition and design.”

According to the filing, EPM is working with “specialists, contractors and a panel of national and international experts in regaining control of the project with actions that include reaching the 418 [meters above sea level] of the dam, plugging the right [Cauca River water] diversion tunnel, covering the auxiliary diversion system and closing the flow of water through machine house.

“In this process, the company has been accompanied by world authorities in fields of knowledge such as: construction aspects, hydraulics, geology, geotechnics, risk management and emergency response,” according to the filing.

Despite the current challenges, EPM so far this year has delivered earnings before interest, taxes, depreciation and amortization (EBITDA) of COP$1.7 trillion (US$580 million), up 10% year-on-year, according to the filing. EPM is 100% owned by the city of Medellin, which gets about 25% of its annual revenues from the utility.

What’s more, the company expects that full-year 2018 EBITDA will come-in at around COP$5 billion (US$1.7 billion), according to EPM.

In addition, EPM can tap US$1.3 billion in credit lines from major international financiers including the Inter-American Development Bank, IDB Invest, CAF and BNDES, according to the company.

Furthermore, EPM has decided to cut 2018 expenditures by around COP$300 billion (US$102 million) in order to help offset future losses expected by delays in electricity sales from Hidroituango, as well as to cover associated extra costs for food, shelter, water, sanitation, utilities, transport, health-care and new infrastructure for affected downstream populations during the temporary crisis.

What’s more, the company has identified a further COP$2 trillion (US$681 million) in possible postponements of planned investments, in order to compensate for future delays in earnings from Hidroituango, according to the filing.

If necessary, EPM also could tap sales of certain assets from its COP$48 trillion [US$16 billion] portfolio, including assets in affiliates worth more than COP$9 trillion (US$3 billion), according to the company.

Thanks to continuing construction of the dam – now at 415 meters above sea level -- and with the engineered spillway now complete, the dam could withstand a Cauca River flood-flow of 6,000 meters per second, a rate that is calculated to occur about once every 500 years, according to the company.

“In this priority landfill [that is, the accelerated raising of the dam-height to 415 meters], the same materials were also used in the construction of the [pre-emergency dam works] up until the moment of the [diversion-tunnel collapse and later tunnel rupture] on April 28, when the dam elevation was 385.8 meters above sea level. These materials comply with national and international standards in terms of impermeability, filters and transitions for this type of works,” according to the filing.

“After reaching the [current] level 415 meters above sea level, the works are now focused on raising the dam to 418 meters above sea level and reinforcing the priority landfill. This with the purpose of turning [the priority section landfill] into a definitive dam for the project and reaching a final elevation of 435 meters above sea level.

“To have greater control over any contingency, a monitoring center was established that operates seven days a week, 24 hours a day, 365 days a year, where it is possible to observe that for [the last] 10 days the behavior of the monitored indicators (flow, dam and landslides) show a normal and stable performance,” EPM added.

Beyond all these financial and engineering safety measures, EPM also has a US$2.55 billion insurance policy covering infrastructure and equipment damage (with a US$1 million deductible), and a loss-of-electricity-sales policy (because of delays in entry-into-operations beyond 90 days) of US$628 million, the company added.

That policy is underwritten by global insurance giant Maxseguros, while EPM’s own (proprietary) insurance company isn’t affected, according to the company.

Published in Medellín Metro News Written by June 13 2018 0

The latest monthly study from Medellin-based wholesale electric-power grid operator XM finds that hydroelectric generators now account for 85.7% of all national power generation – confirming Colombia’s enviable status among the “greenest” power generators on Earth.

What’s more: Once Medellin-based EPM resolves what today is looking more like a temporary engineering problem with its under-construction, 2.4-gigawatt “Hidroituango” hydroelectric dam in Antioquia, hydropower’s dominance in Colombia is likely to continue for decades to come.

The city of Medellin is the 100% owner of EPM -- and the US$5 billion “Hidroituango” project is expected to help to continue delivering about 25% of the city’s annual revenues, when the current tunnel-and-dam engineering challenges are overcome -- as is now expected -- over the coming months.

Meanwhile, EPM announced June 13 that it has hired Imperial College (London) geology expert Nicolas Barton -- one of the world's top authorities on rock stability associated with mountains, dams and tunnels -- to investigate the current status and outlook for the rock massif and tunnels above and adjacent to the Hidroituango dam. EPM general manager Jorge Londoño de la Cuesta previously has stated that existing geological studies and EPM's continuous measurements employing sophisticated equipment indicate a very small possibility of any major collapse of the massif. 

Aside from hydropower -- 99.17% of all renewable power delivered to the Colombian grid -- other relatively negligible renewable-power generators here include bagasse-based thermal power generation (0.75%), wind-turbine generation (0.06%) and photovoltaic power (0.02%), the new XM study shows (see chart, above).

Bagasse-fired thermal power generation (using sugar-cane crop residue) fell 37% month-on-month (May 2018 versus April 2018) while biogas-fired thermal power generation plummeted 66%, the study shows.

“The source of [renewable] energy with the greatest contribution [to the national power grid] was the hydraulic generation with 99.17%, equivalent to 158.47 GWh-day [gigawatt-hours per day], a decrease of 0.45% in relation to April of 2018, and solar power, with a contribution of 0.02%, equivalent to 0.03 GWh-day, saw a decrease of 6.33% in relation to April of 2018,” according to XM.

“The total generation with non-renewable resources (fossil fuel) for the month of May was 26.70 GWh-day, a growth of 7.49% compared to April 2018.

“By subtype by source of energy, we found that natural gas was the largest contributor [in fossil-fueled thermal-power generation] with a 72.25% share, equivalent to 19.29 GWh-day, 10% more than that reported in April 2018. The greatest decrease was presented by liquids [diesel and fuel-oil] with 9.30%,” XM reported.

“For Colombia, it is very positive to have a diversified energy matrix, adaptable to climate changes, thereby contributing to preserve the provision of electric power service in conditions of reliability, security and economy,” added XM’s National Dispatch Center manager Jaime Alejandro Zapata Uribe.

Published in Medellín Metro News Written by June 07 2018 0

The Sociedad Colombiana de Ingenieros -- (SCI, the Colombian national association of engineers) -- on June 6 announced that several possible solutions are seen arising to overcome the current crisis affecting EPM’s under-construction, 2.4-gigawatt “Hidroituango” hydroelectric dam in Antioquia.

The US$5 billion "Hidroituango" project would supply 17% of Colombia's entire national electricity demand once completed -- although the current crisis has forced EPM to postpone the original, partial start-up of December 2018 to some as-yet-unknown, future date.

According to the SCI announcement (obtained by Medellin Herald), a special commission of SCI engineers met with EPM last week to review the various engineering challenges facing the project.

Below is the complete SCI statement, translated from Spanish to English by Medellin Herald:

“Last Friday, June 1, 2018, a special commission of the SCI, convened by its President [Argelino J. Duran Ariza] for the purpose, was received at the EPM facilities by EPM general manager Dr. Jorge Londoño, and the engineers Carlos Eduardo Isaza and Luis Fernando Restrepo, President and Infrastructure Manager of INTEGRAL SA, the firm that designed the project and advises [EPM] during the construction.

“The purpose of the meeting was to obtain first-hand information about the current status of each of the components of the project, the associated risk factors, and the measures being taken to reduce the threats that may affect the communities downstream of the project, and the project itself.

“The verbal information received at the meeting is consistent with the report of the commission of experts sent by the North American government, made known over the weekend, which indicates several threats that may affect the project, with potential effects on the communities downstream of it, including:

“1. Debris [landslides] from the slopes above the reservoir with the potential effect of generating a wave that could overtop the height of the dam, or plug the [water-capture-and-escape tunnel] in the machine house, and/or the [engineered] spillway.

“2. Unchecked loss of control of the right [water] deviation tunnel, which currently discharges 100 cubic meters per second.

“3. Undesirable infiltrations [of Cauca River water] through the dam at level 380 [meters above sea level], with the new design adopted for the so-called ‘priority landfill,' which [potentially] could lead to its failure.

“As for possible damage suffered in the cavern of the machine house, the special commission of the SCI was informed that according to the monitoring carried out, the cavern has not suffered any appreciable damage. Neither has there been detected any possibility of failure of the rock mass of the right massif [the mountain above the dam and machine house] and that all the underground [diversion tunnel blockage] events to date have been related to the location of the geological fault called Los Mellizos.

“EPM informed us that in order to empty the reservoir [behind the dam], there is a possibility of constructing a discharge system with a vertical well to which three existing reservoir arms [the routine drainage systems used in all hydroelectric dams] would be connected. However, it is not clear how much time would be required to build this, although it would be a process of several months.

“EPM expects that the flows of the Cauca River will behave according to historical records and decrease ostensibly from the second week of June, so that the decline in the level of the reservoir begins. This descent would eventually reach level 385 [meters above sea level], which would allow closing the gates of water-capture tunnels 1 and 2 [connecting to] the machine house, the only ones where the water is [now] entering. If such a decision were made, then the only controllable evacuation of the reservoir water would be through the [engineered] spillway [near the top of the dam, at 401 meters above sea level].

“The commission of the SCI was informed of the different monitoring systems that EPM has implemented in the project, and the formation of the integrated information center, which will give continuous results to feed the decisions that the Unified Command Post must adopt, in order to activate the corresponding alerts for the protection of the lives of workers and communities in the basin.

“At the date of our meeting, [EPM] reported that they are formulating a risk-assessment model linked to the instrumentation, and to the evaluation of the necessary time between the issuance of the alert and the occurrence of an event, in order to determine the time required for the possible scenarios and perform evacuation processes.

“The members of the SCI commission suggested some additional actions for consideration by the technical teams of the project, which were well received by EPM and its advisors.

“As a result of the analysis of the information received, the SCI found:

“1. Since the beginning of the emergency, EPM has adopted measures and actions to protect the stability of the works, seeking to reduce the threats to protect the stability of the works and seeking to reduce the threats that materialize, given the circumstances. Said measures correspond to: accelerated enhancement [raising the height] of the dam, evacuation of water through the machine house, and completion of the spillway. For these tasks and to face the various technical challenges that arise, EPM has had experts from the national consulting firms INTEGRAL and INGETEC, and several international experts of global relevance.

“2. It is unquestionable that all identified threats, as well as some other events that may affect the behavior of the dam, will disappear when the reservoir can be emptied in a controlled manner.

“3. Up to now there is no modeling that allows determining the probability of the occurrence of events caused by the threats mentioned, or others not yet identified, so it is not possible to predict with certainty when one of them may occur.

“4. The SCI has not had access to the report presented by the North American commission of experts regarding [allegedly non-optimal material used for the emergency raising of the dam to 410 meters] standards, so we cannot endorse the [North American commission] recommendations not to plug the right diversion tunnel or not to close the water passage through the machine houses, which EPM should evaluate.

“5. The project is still in high-risk condition, which puts the populations below the dam in high-risk condition. It is expected that the monitoring systems allow to anticipate alerts and possible evacuation orders in a timely manner. Therefore, EPM urges the inhabitants to be in permanent attention to the issuance of warnings and evacuation orders issued by the corresponding authorities.

“6. For the SCI, it is evident that the high [water] pressures and the saturation of the mass of the right massif at the dam site originate mainly by the flow of water through the cavern of the machine house. So it would be advisable to suspend this flow in the shortest possible time, but evaluating [also] the impact of [closing the machine-house water tunnel] on the possibility of [Cauca River water] overtopping the dam. Anyway, drying-out the machine house will require a gradual process of pressure release to avoid a possible collapse [of the machine-house cavern].

“7. It is suggested to the UNGRD [Unidad Nacional de Gestión del Riesgo y Prevención de Desastres, the disaster-prevention agency] to coordinate simulations of total evacuation of the populations that may be affected in the event of a breakage of the dam, since the response time will be a critical factor to safeguard lives.

“The SCI’s disposition to collaborate with EPM will be reiterated for overcoming the emergency, informing EPM that once discussions have been analyzed, the SCI will send EPM any additional suggestions. EPM’s offer to provide complementary technical information, if necessary, is appreciated.”

Published in Medellín Metro News Written by June 06 2018 0

The Colombian national infrastructure agency (Agencia Nacional de Infraestructura, ANI) announced June 6 that thanks to Colombia’s new entrance into the Organization for Economic Cooperation and Development (OECD), 13 major international funding organizations now aim to invest in “fourth generation” (4G) highway projects here.

Ten of those organizations are private-equity funds while the other three are pension funds, according to ANI.

Colombia’s entry into the 37-member-nations OECD “is an affirmation of the quality of our institutions, of the transparency and the favorable environment that has been developed for national and international private investment,” according to ANI.

“This seal of quality is a key factor to attract more foreign investment to the country, since being in the OECD guarantees a country to have the best practices,” added ANI president Dimitri Zaninovich.

Most of the large institutional investors active in the infrastructure sector “have limitations to invest in countries outside the OECD. Now Colombian projects can access this new source of capital,” according to ANI.

To date, ANI has approved 30 “4G” highway projects, of which 21 are under construction and nine are in preconstruction, according to the agency.

“Of the total of these projects, 26 have demonstrated their ability to finance infrastructure works before ANI, and 15 have signed credit agreements,” according to the agency.

Among Antioquia’s key “4G” highway projects are “Pacifico 1,” Pacifico 2,” “Ruta al Mar 1,” Ruta al Mar 2,” and “Vias del Nus,” all of which would drastically improve freight transport between Medellin and major ports on the Atlantic and Pacific oceans.

Published in Medellín Metro News Written by May 30 2018 0

The threat of possible landslides originating in the mountain above EPM’s under-construction, 2.4-gigawatt “Hidroituango” hydroelectric dam in Antioquia had triggered a temporary suspension and evacuation of workers May 29, pending further technical analysis.

However, in a 4 p.m. Wednesday, May 30 press conference, EPM announced that further technical analysis revealed no further movement in the mountain, hence enabling restart of construction work.

Then, in a follow-up press conference on Thursday, May 31, EPM general manager Jorge Londoño de la Cuesta added that a relatively moderate landslide of about 130,000 cubic meters from the mountain adjacent to the dam eventually is likely to fall near the entrance of engineered gates designed to conduct river water to the mechanical room (where the electricity turbines are to be located).

However, if and when this expected landslide happens, significant damage to the dam works isn't now seen very likely. Nor is a massive collapse of the mountain adjacent to the dam seen likely -- a collapse that possibly could block the spillway or perhaps cause a huge wave that could overtop the dam, according to international and local experts evaluating the situation.

With the engineered spillway work nearly complete (likely by June 3), and the planned closing of an access tunnel near the spillway due for completion by around June 5, the last crucial step is raising dam height to 415 meters above sea level (probably by June 7), from 410 meters currently. Those three steps likely ensure that no catastrophic failure of the dam will occur -- and also enable resumption of crucial tunnel works.

Permanent closing of the main diversion tunnel -- damaged and blocked by Cauca River flooding following unusually heavy rains in April and May -- is likely to take another two months, Londoño de la Cuesta explained. Meanwhile, closure, cleaning and evacuation of waters from the mechanical room -- temporarily used to divert Cauca waters because of damage to the main diversion tunnel -- likely will require several more months of work, followed by inspection and repairs to the mechanical room, requiring additional time, he added.

In the original May 29 announcement explaining the temporary halt to construction, EPM had announced: “A movement was detected in the upper part of the mountain, in the same place where on Saturday, May 26, a landslide occurred. As a preventive measure and for safety, 1,500 workers were evacuated who were carrying out works on the dam and landfill. In the operation, no-one was hurt and all employees were relocated to a safe place.

“When the geotechnical conditions stabilize, work will continue.

“In this [geological] massif, which in recent days prompted preventive evacuations for the safety of those who work in that area of the project, permanent monitoring with geologists and high technology is maintained.

“As a result of the monitoring, a [potential landslide] was anticipated and evacuation of the personnel in the field was ordered. Indications are that in the next hours or days there could be new landslides.

“With expert personnel, the company performs permanent geological monitoring with piezometers to measure the pressure of the water, [and EPM also employs] radar, satellite monitoring and laser beams in the [Cauca River water diversion] tunnels to determine the condition of the works.

“Additionally, with surface control points on the mountain, combined with radar, we can detect sensitivities of up to tenths of millimeters that allow us to warn of any eventuality,” according to the company.

Possible Economic Consequences

If some future landslide were to cause significant physical and economic damage to the project, then EPM is prepared to respond with possible asset sales, the company added.

For example, the company potentially could sell various power works in Colombia and in other countries, valued at some COP$3 trillion (US$1.04 billion), according to EPM.

“EPM as of today has cash at the Group level of COP$1.4 trillion [US$484 million} and credit lines approved and not disbursed for US$1.3 billion,” according to the company.

So far in 2018, EPM has generated revenues of COP$5.1 trillion (US$1.76 billion), earnings before interest, taxes, depreciation and amortization (EBITDA) of COP$1.7 trillion (US$588 million) and profits of COP$950 billion (US$329 million), the latter up 21% year-on-year.

In total, EPM’s investments in power and other subsidiaries amount to COP$9.3 trillion (US$3.2 billion), according to the company.

XM National Power-Grid Analysis

On a related front, Medellin-based wholesale power-grid administrator XM on May 29 published results of a nationwide scenario-analysis arising from possible delays to the Hidtroituango project.

“In the short and medium term [one to three years], there are no risks in attention to energy demand of the Sistema Interconectada Nacional [SIN, the Colombian national power grid] and there could be greater thermal power-plant generation requirements,” XM concluded.

However, “in the long term, and in the presence of critical hydrological conditions, there could be insufficiency in the supply of electricity,” XM warned.

“Hidroituango is an indispensable project to meet the energy demand in the country economically, safely and reliably,” the company added.

As for medium-term impacts (two to three years), “modeling considered scenarios of low hydrology and the non-entry of Hidroituango on the planned [start-up] dates -- the first unit [300 megawatts] in December 2018 and the fourth and last in August 2019 [totaling 2.4-gigawatts].

“These analyses indicate that the SIN would have the necessary resources to meet the demand and could [provoke] constant thermal generation requirements in some periods exceeding 70 gigawatt-hours (GWh) per day,” according to XM.

For “long-term” impacts (more than three years), “in the case of critical hydrological scenarios, it can be seen that from the year 2022 there could be moments in which the [power-supply] reliability indicators established by the current regulations are not met -- that is, periods with a deficit between supply and demand of electricity in the SIN,” according to XM .

“Based on the information we have to date, and with the imminent postponement of the entry into production of Hidroituango, no risks are foreseen in the SIN in the short and medium term; but, a greater contribution of thermal generation could be required,” added XM general manager María Nohemi Arboleda.

“As of 2022, the projections identify periods in which there could be insufficiency in the supply of electricity,” she continued. “Our analyses ratify the importance of Hidroituango -- which is why, in view of its delay, it will be necessary to have a greater contribution from the existing power generators, and it is vital to encourage the entry of new generation projects with short construction times, as well as distributed generation in the SIN, as well as demand-response mechanisms.

“We consider very relevant the recent proposal of resolutions issued by the CREG [Colombia’s national power-and-gas regulatory agency] to ensure firm energy to meet the demand of electricity in the medium and long term,” she concluded.

Published in Medellín Metro News Written by May 22 2018 0

Medellin-based multinational electric power giant EPM announced 12 pm Thursday, May 24 that it finally reached a crucial safety milestone toward eventual completion of its under-construction, 2.4-gigawatt “Hidroituango” hydroelectric dam on the Cauca River, which had been threatened with possible collapse.

Over the past three weeks, EPM hurriedly scrambled to raise the dam height to at least 410 meters above-sea-level – a height that enables excess Cauca River water to flow safely through an engineered spillway near the top, at 401 meters above sea level, or nine meters below the dam height. The spillway hence avoids water overtopping the dam, which could have caused disaster. 

Now, over the next few weeks, EPM will continue raising the dam height, to at least 415 meters, and will move to close two existing water-diversion tunnels, hence enabling repair work to the mechanical room, damaged during a tunnel-blockage emergency, according to the company.

In recent weeks, excess water flowing on the Cauca has been diverted through engineered diversion tunnels as well as the under-construction mechanical room, all of which are located far below the dam.

However, two out of three of the diversion tunnels had been blocked by rocks and dirt (and possibly logs) -- either occasionally or permanently over the past three weeks -- coincidentally during exceptionally heavy rains in April and May. Unfortunately, the third alternative diversion tunnel had already been cemented-in, in anticipation of a normal, scheduled evolution of the construction project.

A previously undetected geological fault near the main diversion tunnel might have been exposed to surging Cauca River waters over the past weeks, triggering partial tunnel collapses and Cauca water escape-route blockages, EPM officials said.

Suddenly, on May 13, a temporary blockage in the main diversion tunnel burst free, sending millions of gallons of floodwaters downstream, overflowing banks at the town of Puerto Valdivia, causing damage to several dozen homes and a passenger bridge.

That same diversion tunnel still potentially could suddenly unplug in coming days, causing another, temporary flood surge around Puerto Valdivia -- even after the dam spillway is completed, EPM warned.

Fortunately, EPM already set-up an elaborate earning-warning system, alerting residents downstream of the dam well in advance of any possible flood. Thanks to that system, vulnerable populations had long since moved to safer, higher ground, so no-one was killed or injured in the May 13 incident.

That one-time flood incident and the potential threat of a future dam collapse also had forced nearly 24,000 people -- including some 3,300 in the town of Puerto Valdivia -- to flee to higher ground, where they’ve been living for more than a week now, awaiting cancellation of flood threats.

As a result of the completion of the dam spillway system, only the 3,300 residents of Puerto Valdivia will have to remain in higher-ground shelters for the time being, EPM added today.

Despite the typical inconveniences of temporary displacement, at least the evacuees are receiving free food, water, shelter, beds and medical care, all paid-for and organized by EPM. EPM also will pay-for reconstruction of damaged or destroyed homes as well as related infrastructure.

Still, by averting a dam collapse, EPM avoided a disaster that could have wiped-out everything alongside its path for many miles downstream, threatening homes and lives of as many as 200,000 people.

When the main diversion tunnel plugged 10 days ago, EPM temporarily re-routed the Cauca river overflow through the under-construction mechanical room, providing a safe water escape pathway until the dam-raising construction would reach at least 410 meters.

While this temporary diversion helped avoid a catastrophe, it also has caused as-yet-unspecified damage to the mechanical room. Still, EPM managed to rescue some expensive equipment prior to the re-routing through the mechanical room.

Besides physical damage to the mechanical room, the flooding and blockage incident also will push-back start-up of the first 300-megawatts (MW) of the 2.4-gigawatt hydropower project beyond the initially targeted December 2018 start-up, according to EPM.

Despite these disappointments, Colombia’s national association of power producers (ALCOGEN) issued a bulletin May 10 advising that Colombia won’t be lacking power capacity for at least the next three years -- even if Hidroituango’s start-up is delayed by months or even years (although the latter delay now is seen less likely).

EPM also revealed that it has insurance coverage to help pay for the damage to the mechanical room and related infrastructure, as well as loss-of-income from a likely delay in power sales from Hidroituango.

Aside from relatively minor injuries to five EPM workers during the crisis, no downstream citizens were killed or injured by the temporary surges in Cauca water levels -- thanks to EPM’s well-organized alert-and-rescue operations during the crisis, involving numerous government agencies.

 

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About Medellin Herald

Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

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