Pilot projects again: The consolation prize?

Between 2009 and 2011, negotiations on the conditions under which the Quenu, Tabón and the Desertores Islands projects would be executed took place between the Ministry of Energy and the Regional Government. During that period there was a significant change in the Chilean political landscape. In 2010 a new right-wing government took office after 20 years of centre-left wing leadership of the ‘Concertación’ coalition. Most of the technical staff and authorities at the Rural Electrification Unit (former PER, now DAEE) of the Ministry of Energy were confirmed in their positions but important changes happened at the Regional Government level, in which the new designed ‘Intendente’⁴⁷ brought in a new team of advisors and a different approach to rural electrification policy. Some technical staff at the regional government were confirmed in their positions but the UTER officer in charge⁴⁸ was removed.

All these changes implied that network building, learning and trust had to be recreated from scratch (Interview 36, Interview 38). Positively, this created the opportunity to establish a new agenda in which the powerful stabilising forces of incumbent actors, including distribution utilities and policy makers, could have been eroded. However, the political ability of the central authorities was limited in opening up opportunities for RET-based rural electrification.

The regional strategy therefore tuned-in better with a market vision promoted by the

47 ‘Intendente Regional’ or head of the Regional Government is the highest political authority at the regional scale. The position is designated by the President of the Republic.

48 UTER stands for Technical Rural Electrification Units, which were established in several Regional Governments to manage the rural electrification process in coordination with central and regional authorities.

incumbent distribution utilities and a relaxed approach regarding technology choices, which in practice meant that non-standardised diesel-based projects filled the off-grid rural electrification pipeline (Interview 18, Interview 21, Interview 27, Interview 36).

As part of the negotiations, the Ministry of Energy and the GEF Programme started to define a new cooperation framework in which the GEF programme would reallocate some of its funds to leverage public investment for the implementation of the few wind-based projects that were still in the rural electrification pipeline for the Chiloé Islands. Although agreement was never reached, key informants affirmed that the negotiations generated political momentum at the central scale, so the Ministry of Energy obtained high level political support from the General Secretary of the Presidency and the Ministry of the Interior (the two most prominent political Ministries) for the completion of the wind-based mini-grid projects in Chiloé (Interview 12, Interview 17, Interview 36). This is one of the reasons why, regardless the lack of support at regional scale, the GEF programme and the Ministry of Energy were able to sustain the commitment to go ahead with the RET-based electrification of the 9 islands in the rural councils of Calbuco (Quenu and Tabón), Chaitén and Hualaihué (Desertores Islands).

Despite the regional government’s change of approach to RET-based rural electrification, many council mayors responded to demands from their constituencies to fulfil promises about access to electricity in rural areas by starting to negotiate directly with the Ministry of Energy as an alternative path to agreement on project implementation. This local councils lobby resounded at the Ministries cabinets in Santiago with the result that central authorities mandated to their regional counterparts the electrification of Quenu, Tabón and Desertores Islands with wind-based systems. Additional financial resources from central sources (Ministry of Energy and SUBDERE) were allocated to the Regional Government to call new public tenders⁴⁹.

At this point, RET-based projects had ceased to be a fundamental part of the regional electrification strategy, and had become, rather, a number of initiatives in the process of becoming a nightmare which it was felt had to be completed (Interview 12, Interview 20, Interview 36). Development and implementation of projects were not flowing through a cohesive network of actors at different scales and from different sectors, but through a top-down authority line. More importantly, in the opinion of some of the interviewees, projects became a problem to be got rid of rather than a solution to local needs to be co-produced

49 The construction of a bridge between the Great Chiloé Island and the mainland was cancelled and as a trade-off an infrastructure plan for Chiloé was launched. The so-called Chiloé Plan included rural electrification, and the remaining wind-based projects were therefore incorporated into this centralised budgetary allocation.

between local, regional and national actors (Interview 4, Interview 21, Interview 24, Interview 36).

The aforementioned dynamics suggest that the execution of rural electrification projects in Chiloé has been driven in recent years by the imperative to achieve political objectives and electrification targets. These, however, are not fully aligned with the new policies and motivations behind access to energy, a process already co-evolving in many other regions of the country, as shown in the case of productive uses of PV projects in northern regions or through the creation of broader access to energy programmes at SUBDERE and the Ministry of Energy. By contrast these few RET projects did not fully articulate social and productive needs at the local scale, but focused only on basic residential electrification. The opportunity to integrate productive uses of energy and non-electricity energy services was neglected in the electrification of the remote islands of the Chiloé Archipelago (Interview 18, Interview 19).

But more importantly, during the long years which passed between the development of draft plans and the production of detailed project designs, a crucial issue emerged as a condition for the success of technology uptake. This is the engagement of community organisations in the management and operation of projects. Lessons from previous experiences (such as the Tac Island and other RETs projects elsewhere) did not permeate new projects designs. This could be the result of the lack of monitoring and evaluation of implemented initiatives, and so is a great missed opportunity of taking advantage of one of the strengths of Chilote’s culture:

namely their self organisation and local governance capacity (Interview 19, Interview 24, Interview 51).

An example of other social practices is useful to understand this particular feature of the local culture in Chiloé. Extremely isolated island communities are used to the close bonds of their own community networks. Local leaders play important roles as intermediaries between public service provision and societal needs at the local level (Interview 18, Interview 24). But a remarkable cultural feature is the ‘minga’, a collective project with community benefits or a community volunteering work that helps some members of that community. An example of a

‘minga’ is the physical moving of an entire house (and the family) from one location (e.g. an island) to a different one (e.g. another island or a different place in the same island), a process carried out by an entire community, which takes the house through the sea to its new place.

Consequently, local community engagement could have been considered a natural step in the project implementation cycle and therefore electricity cooperatives were thought to be the right mechanism (Interview 14, Interview 36). The GEF Programme indeed supported the creation of several cooperatives through legal analysis and advice, but over the years these

entities have not played a role in the decision making or the management of electricity services at the local scale (Interview 4, Interview 36).

However, the absence of regional support for the implementation of more decentralised, bottom-up approaches to energy provision favoured traditional commercial relationships between energy companies and rural customers (Interview 21). Distribution utilities managed to define the direction (technological options) and the scope (particular locations and villages) of rural electrification planning in Los Lagos. Wind mini-grids were kept in the regional pipeline as a concession to the dominant regime actors and were ultimately left as pilot projects to be implemented by the Regional Government through public biddings (Interview 12, Interview 20, Interview 21). The result is that the opportunity to better articulate community needs and technological options (for instance for productive uses of energy) was somehow missed.

Replication and scaled-up interventions were not achieved in Chiloé. The lack of a cohesive network of actors meant that lessons from previous experiences have not been learnt;

expectations have changed and have even been contradictory over time; knowledge has not been transferred to the local space and so those RET projects still in the pipeline (Quenu, Tabón and Desertores Islands) were conceived as new pilot experiences (i.e. the wind-based mini-grids have not benefited from replication of practices but are understood as new and separate interventions). Rural families are finally being connected to electricity service provision through hybrid RET systems in some of the Chiloé islands. However, the long period between project identification, development and implementation has generated doubts about the extent to which users’ needs, the engagement of rural communities and governance arrangements match technological options and institutional capacities to manage such systems. Additionally, the changing nature of political visions and rural electrification regional strategy has entailed a lack of reflexive co-construction and articulation of the problem-solution issue, achieving only a limited scaling up from a societal perspective (also referred to as societal scale-up in chapter 5).

In the first two quarters of 2012 both wind-based projects in Calbuco (Quenu and Tabón Islands)⁵⁰ and Desertores⁵¹ were commissioned and are currently – at the time of writing up this thesis - being implemented⁵². The only aspect of the contractual obligations actually

50 GORE Los Lagos Press release. http://www.goreloslagos.cl/sala_prensa/noticias_det/434

51 Ministry of Energy Press release:

http://www.minenergia.gob.cl/ministerio/noticias/generales/ministro-alvarez-lanzo-proyecto-de.html

52 The Quenu and Tabón projects were inaugurated in May 2013 and the Desertores Islands project was under execution at the same time

(http://www.subdere.cl/sala-de-prensa/subdere-inaugura-electrificaci%C3%B3n-rural-para-la-isla-tab%C3%B3n-en-la-regi%C3%B3n-de-los-lagos)

decided so far relate to the provision of maintenance, leaving the real capacity to deal with operational challenges still somehow unclear. The extent to which lessons from previous projects are being taken into account is doubtful. Wireless Energy, the very firm that provided the equipment for the Tac Island project, is designing and building the electricity systems in the Desertores Islands and is responsible for providing maintenance during the first 10 years of subsidised operations⁵³ (Interview 18, Interview 19, Interview 21). In Quenu and Tabón only equipment provision was considered in the tender and the Calbuco council has the responsibility of supporting local electrification committees to ensure adequate operation and maintenance (Interview 18, Interview 51).

The last phase of dissemination of small scale wind power in Chiloé was characterised by the displacement of decision making from arenas focused on solving societal needs to a direct negotiation between central and regional authorities. Intermediary action became a bilateral negotiation between stakeholders and the importance of connecting producers and users of technology was forgotten. The narrow set of actors involved in deciding the fate of the few remaining wind projects in Chiloé can be understood as a factor affecting the extent to which the adaptation of practices and technology has been addressed. The problem has been that the rigidity of rules (institutional, cognitive and technological) hindered the possibility of stimulating experimentation and variety.

Expectations in this phase were shared by only few actors, mainly central and local authorities and some technology providers. This left a gap in the intermediation at regional scale, where most decisions should have been taken in this stage of project implementation. RET-based rural electrification visions and strategies were often contradictory and contested between these actors, so non-cohesive networks were easily co-opted by incumbents’ interests.

Commitments from regional actors were shallow and not backed by concrete plans and implementing strategies. Finally, as has mentioned in several parts of the wind power journey, lessons from previous experiences were regularly disregarded, particularly learning about management models, user involvement and the creation of socio-political capital that might have empowered local electric cooperatives to manage their own decentralised electricity systems.

53 Together with the FNDR subsidy for infrastructure provision, an additional annual CLP123 million (circa USD250,000) was agreed as a subsidy to user’s tariff

(http://www.datossur.cl/index.php?option=com_content&view=article&id=5309:islas-desertores-inician-obras-de-electrificacion-en-siete-islas&catid=37:local&Itemid=127).

6.6 Chapter Conclusions

This chapter has presented the second case study of the thesis. It tells the story of wind power diffusion in rural electrification in the southern Chiloé Archipelago over the last two decades.

The empirical account has been constructed through a narrative that looks at the development of small scale mini-grids using a mix of wind resources and traditional fuels. As in the other case study (PV), different phases of socio-technical dissemination have been identified in an historical account of developed and executed projects in the framework of the PER in Chile.

The first stage was marked by the execution of small-scale wind pilot projects supplying electricity to rural schools, community centres and households in southern regions by local authorities and universities interested in supporting technology development for rural communities. Given the lack of institutional embeddedness and support for operational challenges, most wind turbines broke down and expectations turned towards grid extension.

In a subsequent phase aiming at demonstrating the viability of small-scale wind systems, the Tac Island pilot project was implemented at the beginning of the PER in one of the islands of the Chiloé Archipelago. To overcome the perceived barriers to wind power dissemination, the central government reached a cooperation agreement with NREL and obtained the international cooperation from the US (through the Department of Energy) to provide technical assistance in the development and execution of the project. The initial engagement strategy involved bringing together regional authorities, the major distribution utility in the region of Los Lagos (SAESA) and a technology provider (Wireless Energy, a locally based RET firm owned by an American citizen). A needs assessment and a wind monitoring campaign were implemented, and the international actors provided their technical expertise in analysing all the data gathered and in designing the electricity generation plant and mini-grid.

Once the pilot project was executed, however, local and regional support began to diminish so follow up activities were never planned. The operational scheme (a local operator and the technology provider in charge of maintenance through a contract with SAESA) proved to be impractical given the difficulty of reaching the island during winter and in periods of poor weather. Lack of local know-how prevented the anticipation of technical problems and the provision of adequate maintenance. Moreover, low local engagement from community members resulted in misuse of electrical appliances, a steep growth in demand and a badly managed electricity generation system. After two years of operations the wind components of the system had broken down.

The failure of the distribution utility and the regional government to seriously buy into this project specifically or small scale wind power more generally meant that expectations were not backed by concrete commitments and ongoing support. Claimed as a success at the beginning, the pilot experience in Tac Island failed in the end to demonstrate the viability of the technology because the electricity system started to run only on diesel and demanded very expensive tariffs to ensure cost recovery operations.

However, as a pilot project, the Tac Islad project had been devised as a flagship for the electrification of an additional 32 remote islands in the Chiloé Archipelago, something which would have constituted the greatest set of mini-grid projects ever developed in the country.

The GEF programme started to support the plan and the e7 Fund became involved through technical expertise and financial aid. The strategy included quasi-system level supporting activities: training and knowledge development, awareness campaigns amongst authorities and rural communities, networking and advocacy amongst firms and regional authorities, fieldwork with communities and wind monitoring campaigns, project designs and technological and commercial visits to more developed markets.

This space of protection was advocated and pushed forward mainly by central government authorities (National Energy Commission) and the GEF programme, also based in Santiago. The lack of regional buy in mentioned in the case of the Tac Island project, coupled with the lack of interest and tacit opposition played by SAESA generated pressure on regional authorities whose priorities began to diverge from the original plan. This resulted in a change to the regional electrification strategy so as to favour submarine grid extension to those islands closer to the Great Chiloé Island, which had itself only recently been connected to the national grid.

Most of the support committed by international and regional institutions vanished over the following years and the change of strategy resulted in a lack of stable political support, so municipal authorities found themselves void of possible solutions to demands made by community leaders. Alternative means of executing electrification projects were thus sought and what were supposed to have been grid extension projects became a myriad of diesel gen sets installed in rural homes or non-standardised mini-grids developed outside the rural electrification institutional framework. The latter would have ensured adequate assessment criteria, project development methods and focused funding mechanisms, amongst other rules and practices, but outside its framework these were lacking.

The overall dis-institutionalisation of the early and emergent support for RET-based rural electrification was further eroded by the misuse of other protection measures. This includes

the newly approved subsidy to RET rural electrification consumption, which was counterproductively provided to diesel generating technology in rural contexts.

Against the backdrop of pervasive forces frustrating the implementation of RET-based rural electrification projects in Los Lagos and Chiloé, but more crucially, in opposition to stabilising pressures in favour of traditional actors’ roles and practices in rural electrification, the few wind-based mini-grids that remained in the project pipeline (Desertores, Quenu and Tabón Islands) continued to be pushed forward by the GEF programme and the central authorities at the Ministry of Energy.

Changes in the political landscape in 2010 forced the rebuilding of networks, strengthening of expectations around small scale wind power and advocating access to electricity policies launched more than 10 years earlier at the central scale. These visions and political imperatives found little support in regional government circles, but political negotiations allowed the few remaining wind-based projects to be kept in the regional electrification pipeline. Once devised as transforming initiatives, these nine small scale wind mini-grids are currently under implementation as pilot interventions, in which none of the pitfalls and difficulties from previous experience have been internalized as learning, for which local participation has been negligible and technological knowledge and skills for adequate management schemes have been irrelevant.

The next chapter presents a discussion in which both case studies are compared and linked to the theoretical framework used in this thesis.