EPM’s Giant ‘Guatape’ Hydroelectric Plant Repairs Underway; Rationing Threat Lessens

Medellin-based power giant EPM announced March 25 the successful delivery of the last of eight groups of replacement cables and related equipment for repairing its 560-megawatt (MW) “Guatape” hydroelectric plant in Antioquia.

The plant went off-line February 15 because of a fire in an access tunnel, which officials suspect could be traced to some defect in the original power cables.

Replacement cables were flown to Medellin from Mexico aboard gigantic Antonov 124-100 aircraft, capable of hauling 100 tons of extra-bulky cargo. All the cables have now been delivered to the Guatape site.

EPM now estimates that 25% of Guatape’s output capacity likely would be restored by May 1 — close to the deadline by which Colombia’s national government has promised to decide whether episodes of power rationing might be required for some time. Colombia hasn’t faced power rationing since a severe “El Niño” drought in 1992, after which new power-tariff rules incentivized the construction of 18 backup thermopower plants.

However, Colombia President Juan Manuel Santos announced March 29 that a decision about power rationing could come as early as next week. Meanwhile, Colombia’s power-market operator — Medellin-based XM — also is due to make a recommendation in coming days about whether the government should impose power rationing.

Following Guatape’s intial 25% restoration in May, “it is estimated that in June 2016 another two generating units wills start operating, while the other four units will enter service in July and September,” according to EPM.

EPM added that an insurance policy would cover much of the combined cost of cable repairs along with lost revenue resulting from the plant’s shut-down.

U.S.-based bond rater Fitch Ratings announced March 16 that EPM’s insurance deductible requires the company to absorb 45 equivalent days of business interruption.

“Depending on the total cost scenario, EPM will have to absorb between US$35 million to US$75 million of business interruption for the 45 days deductible,” according to Fitch.

The combination of the “El Niño” drought in recent months, plus the unexpected shut-down of the Guatape hydropower plant, has put Colombia’s national power grid under the potential threat of power rationing, perhaps as early as May or June.

However, IDEAM –Colombia’s national weather-forecasting agency – predicted in late March a return to near-normal rains in April in Antioquia and other key hydropower-based regions in Colombia. “Volumes of precipitation [are expected] between normal and slightly below normal in the Caribbean and Andean regions,” according to IDEAM.

Meanwhile, thermal power generators that have been replacing power shortfalls from hydroelectric dams are complaining that the current government-dictated tariff ceiling on thermo-based generation puts them at risk of financial ruin. The government has promised to take appropriate steps on power tariffs in coming weeks to avoid any such disaster, however.

On a related front, independent power producer Celsia announced March 28 that it has just completed repairs to one of its turbines at the 610-MW “Flores IV” thermoelectric plant. Those repairs have restored 230-MW of power that had been temporarily lost to Colombia’s national grid.

In mid-March, Celsia also announced that it’s now adding another 40-MW of surplus thermopower capacity to the national grid from its “Argos” cement plants ts in Cartagena, Sucre, Valle del Cauca, Boyaca and Antioquia.