Colombia - Power Market Development Project : sector environmental assessment - Colombian electricity sector (Vol. 1 of 3) : Executive summary

I,,. Ij ~~I,IT A4d~~~~~~~~~~~~~~~~~~~~~~k i'~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~i t ; t ; si; ; iii 'I 1t.1 jTl?jili 'I4WXI ;j' IK A. } A . 4 s , ,< ,;: ,,3 ; 1 t . ;~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~, MINISTl.RIPO E S YIEN,13GIA f , , , tt,aS A. *. fdLMaT_ j~~~~~~~~~~~~~~~~~~~~~~~~~~~  SECTOR ENVIRONMENTAL ASSESSMENT COLOMBIAN ELECTRICITY SECTOR EXECUTIVE SUMMARY Ak - ME MINISTERIO DE MINAS Y ENERGIA I. : Interconexi6n Electrica S. A  SECTOR ENVIRONMENT>L ASSESSMENT TABLE OF CONTENTS 1. INTRODUCTION 1.1 BACKGROUND 1.2 SCOPE OF THE ASSESSMENT 1.3 METHODOLOGICAL ASPECTS 1.4 PUBLIC SURVEY 2. THE COLOMBIAN ELECTRICITY SECTOR 2.1 INSTITUTIONAL STRUCTURE 2.2 TECHNICAL CHARACTERISTICS OF THE PRESENT ELECTRICAL SYSTEM 2.3 TECHNICAL AND ENVIRONMENTAL SEQUENCE OF POWER GENERATION PROJECTS 2.4 TECHNICAL AND ENVlRONMENTAL SEQUENCE OF TRANSMISSION LINE PROJECTS 25 PROCESS OF PLANNING FOR EXPANSION 2.6 FUTURE ENERGETIC OPTIONS . DESCRIPTION OF THE SECTOWRS ENVIRONMENTAL IMPACT 3.1 ENVIRONMENTAL DESCRIPTION OF THE HYDROELECTRIC SYSTEM 3.1.1 Impact an the abiotic environment 3.1.2 Impact on the biotic environment 3.1.3 Impact on the sodoeconomic envirmnment 3.1.4 Impact on the sodoculhnal envirmnment 3.2 ENVIRONMENTAL DESCRIPTION OF THE COLOMBIAN THERMAL-ELECTRIC SYSTEM 3.2.1 Impact on the abiotic environment 3.2.2 Impact on the biotic envirmnment 3.2.3 Impact on socio-econniic and soruo-cultural environments 3.3 ENVIRONMENTAL DESCRIPTION OF TRANSMISSION UNES 3.31 Impact on the abiotic environment 3.3.2 Impact on the biotic environment 3.3.3 Impact on socio.economnic and socioacIItural environments 3.4 ESTIMATE OF ENVIRONMENTAL IMPACT OF THE ELECTRICITY SECTOR 4. ENVIRONMENTAL INSTITUTIONAL SITUATION 4.1 MINISTRY OF THE ENVIRONMENT 4.1.1 The National Envirnmental System (S.I.N.A.) 4.1.2 The Natiornl Environmental Council 4.1.3 Regional Autonomous Corportons 4.2 POSITIVE ASPECTS 4.3 ASPECTS TO BE CORRECTED 5. LEGISLATION REGARDING THE ENVIRONMENT 5.1 ENVIRONMENTAL PRECEPTS IN THE CONSTITUTION F;.2 THE RENEWABLE NATURAL RESOURCES AND ENVIRONMENTAL CODE 5.3 LAW 99 OF 1993 - CREATION OF THE MINISTRY OF THE ENVIRONMENT 5.3.1 Main deficiencies 5.3.2 Negative aspects 5.4 ASPECTS OF PRIORITY AWAMNG LEGISLATION  SECTOR ENVIRONMENTAL ASSESSMENT 2 6. ENVIRONMENTAL POLICIES OF THE SECTOR 6.1 ENViRONMENTAL POLICY OF THE ENERGETIC SECTOR 6.2 ENVIRONMENTAL POLICIES OF THE ELECTRICITY SECTOR 6.3 ESTIMATE OF POLICIES 7. MANAGEMENT OF ENVIRONMENTAL MATTERS IN THE ELECTRICITY SECTOR 7.1 ENVIRONMENTAL PLANNING 7.2 ENVIRONMENTAL MANAGEMENT 7.2.1 Management in Hydroelectric Projects 7.2.2 Maaement In Thermal-elecbtic Projects 7.2.3 Management in transmission lines 7.3 GENERAL CONCLUSION, STRONG POINTS AND WEAKNESSES OF THE ENVIRONMENTAL MANAGEMENT OF THE COLOMBIAN ELECTRICITY SECTOR 8. METHOD FOR ENVIRONMENTAL EVALUATION OF THE EXPANSION PLAN 8.1 CURRENT METHOD 8.2 LIMITATIONS OF THE CURRENT METHOD 9. PRESENT STRATEGIES FOR SECTORIAL DEVELOPMENT AND THEIR ENVIRONMENTAL IMPLICATIONS 9.1 PRIVATE PARTICIPATION AND FREE COMPETITION 9.2 INDICATIVE RATHER THAN RIGID PLANNING 9.3 PARTICIPATION OF REGIONAL INSTITUTIONS 9.4 INTEGRAL PLANNING AND REGULATION OF THE ENERGETIC SECTOR 9.5 INCREASE OF THERMAL-ELECTRIC GENERATION 9.6 INCREASE OF ENERGY-EFFICIENCY 9.7 PROJECT SCALE 9.8 CONSTRUCTION OF NEW HYDROELECTRIC PLANTS 9.9 STUDY OF NEW POWER GENERATION PROJECTS 10. ECONOMIC EVALUATION OF THE ENVIRONMENTAL IMPLICATIONS OF THE ELECTRICITY SECTOR 11. PRESENT TENDENCIES AND POSSIBLE FUTURE PERSPECTIVES FOR THE ELECTRICITY SECTOR AND THE ENVIRONMENTAL SECTOR 11.1 THE ELECTRICITY SECTOR 11.2 REFORMS TO THE ENVIRONMENTAL SECTOR 12. RECOMMENDATIONS FOR A PLAN OF ENV RONMENTAL ACTION 12.1 GENERALASPECTS 12.2 BASIC PRINCIPLES 12.3 RECOMMENDED STRATEGIES  SECTOR ENVIRNMENTAL ASSESSMENT 3 1. INTRODUCTION 1.1 BACKGROUND In March, 1993, as a result of oan agreements for financing the Third Transmission Une Plan and for co-finandng thermilolecbic power generaton projects under BOO and similar schemes, the Natonal Govemment areed wAth the World Bank to perform a Sector Environmental Assessment (SEA) of the Colombian Electrcity Sector (CES), in accordance wlth specific terms of reference and the general guidelines from the Bank for this type of assessment. The Ministry of Mines aEid Energy appointed Interconexd6n Electica S.A., ISA to eawry out the SEA, under the general coordiation of Eduardo De La Cruz Charry, Environmental Manager, Enrique Angel Sarint, Ecological and Natural Resources Diector, and Luis Calos Villegas Rodriguez, Social Management and Studies Director. A team of specialists vAs conted to develop specific subjects arnd to pepare the reporLt, undr the direction of Juan Jose MarIflO, Civil Engineer. o,The contribution of Maria Clara Mejia, economist of the Wond Bank. in the general design of the assessment and the revision of the prelrimnary draft of the Report, vms very impotant. The comments of the professional and technicians of the Environmental Admninistration and the support in text edition by the Ecological and Social groups are greatly acknowedged. 12. SCOPE OF THE ASSESSMENT The assessment indudes a geneml analysis of environmental planring and management in the Sector over the last ternty-five yean and in the light of the legal wnd institutional changes derived from the countrs process of modernization and fmrm the privatization of the Electricity SecWs activity. The objective is to review environmental performance. The environments strn points and weaknesses are pinpointed and the report concludes with the prposal of an Environmental Acton Plan wit a view to vworldng out deflcieniesi reinfrcing the most significant advances achieved by the Sector, and reviewing the main criteria for the regulalion and application of the National Govemmert's polides regarding the environment 1.3 METHODOLOGICAL ASPECTS The vwt performed for this Sector Environmental Assessment, given the Urme limit, mainly consisted in the collecion, analysis and synthesis of numerous documents that exist on the Colombian Electricity Sector and its progress in connection v4th the environment; and the gathering of additional information through interviews with employees of the companies of the Electricity Sector and organizatios of the Environmental Sector. In addition, institutional information vas requested of all of the compties of the sector, and this vms furnished by EEB, CHEC, CVC, EEPPM, URRA S.A., CHB and ISA. Regarding environmental management by the Sector, three different penods should be distirguished, as follows: * Environments management before the Natural Resources Code, issued in 1974, carried ot in a summary manner and wvth little planing.  SECTOR ENVIRONMENTAL ASSESSMENT 4 * Environmental plannring and manaWgement from 1974 to 1987, approimtately, vAth a corelve rather than preventve emphasis. Most of the projeciz Included In the sample vmre constrnted durlng this pedod of time. * Environmerta planning and management wlth a preventive focus, developOd espedally as of 1987, wAth significant progress in: Conceptual aspects; the formation of Environmental Units in the compwnes of the Sector; coordition through the CoMOit Amblerial del Sector Elci:lrco Colomblano (Envimrnmental Committee of the Colombian Elctridty Sector), CASEC. IA PUBLIC SURVEY The Sope of the SEA induded a pubilc survey on the resits of the study,. vth the paericip.on of govemment deparents, indusy and commerce represntatives, urdversities and nor- govemmental oaWrizaons. This vms done by sending the draft Report of the SEA. The resmlt of the survey is very satisfactory; more than 60% of the organizadons surveyed sent their comments and suggestions, many of which vere induded in the final version.  SECTOR ENVIRONMENTALASSESSMENT a 2. THE COLOMBIAN ELECTRICITY SECTOR 2.1 INSTITUTIONAL STRUCTURE The present institutional structure is incuded in Annex 2.1-1. The folowing evolution is foreseen: govemment organizations with contrl, supervision, planning and operational functions, generating companies that compete among themselves for the markets wid for large industrial cientS: a company in charge of bansmission and delivery; distribution companies that wil directly attend the end users except in the case of large industries. Coopers and Lybrand's proposal is shown in annex 2.1-2. In the new institutiona- structure, the government assumes a role of control and supervision inside the CES. removing itself from administrative funions and those of the daily management of the sector. This change demands a period of transition in which the CES will gradually be left in the hands of the regions (provinces and municipalities) and of the private sector, as financial liquidity and the transformation of the companies progresses. 2.2 TECHNICAL CHARACTERISTICS OF THE PRESENT ELECTRICAL SYSTEM The Colombian interconnected system has an installed capacity of 10048 MW, (Jun/93) distributed as follows: Hydraulic 8060 MW (80.2%) Thermal 1988 MW (19.8%) Steam - Coal 569 MW (5.7%) Steam - Gas and/or Fuel Oil 909 MW (9.1%) Gas turbine 510M W (5.0%) Total 10048 MW (100.0%) In order to regtlate river flows, the interonnected hydmoelectric system has aggregate reservoir capacity of 6676 hm3, equivalent to 13859 GWh. The transmission netork of the interconnected system has 14471 km of transrnission lines, distributed as follows: 115 kv lines 6912 km 230 kv lines 7036 km 500 kv lines 523 km TOTAL 14471 km  SECTOR-ENV1RONMENTAL ASSESSMENT S ANNEX 2.1-1 INSTITUTIONAL STRUCTURE COLOMBIAN ELECTRICITY SECTOR r------------~---------------------------~~~~-------I- g |~~~~NACIONAL GOVERNMENT| <I Z ' MINISTRY OF MINISTRY OF NP FINANCES & P.C. MINING AND ENERGY _CONFIS___ NEF o I CORELCA . .5. a ' I- -I-- - - - - - - - - - - - - - - - - - - - - - - ,| GOVERNORS 9 SUB- SIDIARIES CHEC REGIONAL UTILITIES n , CAPITAL MAYORS EEB EEPPM EMCALI MUNICIPAL v ! CHBt45 . H | . eHIDRA (1) Notional Energetic Financer (2) Unity fcr Planning Mining/Energy 163J Energetic Regulatory Commission Energy Companies (4) 5etania Hydro-power Plant Control insSitutions (5) Direction for the Generation of Electric Energy  SECTOR ENMRONMENTAL ASSESSMENT 7 ANNEX 2.1-2 INSTITUTIONAL STRUCTURE: SUMMARY COOPERS & LYBRAN D'S PROPOSAL '___________ A~paltAppi SXupIntdewt of Pubk Services 1Appdnt Coon