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| nd ashes; thermal contmination in currents of water due to the waste waters from cooling processes. Much of the impac of thermn ectic projects on the ablotic environmernt does not have the complexity found in hydroelectric prjects and coudd be easily estimated in terms of importance, magrntude and duration. 32.2 Impact on the biotic environmnt The main impact on the bioG environment In thermal-lectic plants Is that caused by thermal contamination, alteraton of the quality of the air and emission of solid and liquid Wte; they constiute a factor of degradation of the ecosystemsr aquatic as well as terrestrial. These types of impacts can be considered local, however koledge on them is deficient and therefore information is iwladng for their assessment Some of them do not seem deafly attribuble to CES due to the locaton of the power plants in zones Wit previous economical uses. 32.3 Impact on socio-economic and socda-cultuiral envlronment. The main impact of the thermal-lectric plnts on the sod-conomic and cultural environment is that derived from the effects on tuban poputions due to atmospheric pollution and Rquid waste. The implications on public health and eagdlcutni productivity of these types of impact re uncertain. Among benefidal types of impact, the generation of employment, at the plant as well as in the mining and coal transportaon acvities, should be considered. 3.3 ENVIRONMENTAL DESCRIPTION OF TRANSMISSION UNES The rnaonal interonected system has 6912 kn of 115 kv lines whose right of way is 16 m wide; 7036 km of 230 kv lines, WMith a rght f y of 32 m; wd 523 km d 500 kv lines, vhose right of way is 64 m. Given the nare of the different types of impact, their magnitude is not very loge, when considered independenUy. NotWithstanding, vWhen considered jointy, the trnsmission lines generate an environmental impact th could be significant The marity of environmental impacts in electic transmission lines can be foreseen and minimized, pnrvided that an environmental analysis in the selection of definite routes and paths, implementng the perinent environmenta restrictions, is induded in a dea and coherent manner. ISA has made pogress in the environmental optmizatio of the transmission lineL 3.3.1 Impact on the ablotic environment The main impacts on the abiotic environment are: Loss of the vegetal layer tha leads to a predisposition for erosion and an increase in surface floodng, sufaoe water and soil alteration due to the opening of access ways and the use of heavy machinery, and the impacts derived from the construction of roads, such as destabilization of slopes, surface ladslides and changes in the countryside. A considerable number of these impacts are avoidable or can be alleviated to a large extent through the approprate management One of the main causes of impact is the lack of the tmely inclusion of critena for environmental protection in the definitfin of tower-ing and transmission line rotAe alternatives. Regarding this aspect, significant progiass is observed in the preventive management performed by ISA, through its studies on environmental restrictions to the rights of vay. In connection vith lhe definition and charing of accesses, the majority of adverse effects have been caused by deficiences in their definiion and construction. 3.3.2 Impact on the blofic environment The main impacts on the bioUc environment are those derived from the consruction of roads of access and the clearing of rights of vwy for cable-laying and maintenance. Both activities are very harmful to the vegetal layer. The incorporan of constructve procedures (helkopter cable-laying, the installation of pmtectve paortios, the laying of jibs vi cannons, higher tor sucture design, etc.), noWithstanding the slight increase in the cost of the lines, significantly contributes to avoiding tbis type of impacts. The lack of studies wit greater coverage and detail, that vad allow the pinpointing and evaluation of the effects on the ecosystem, stands out 3.3.3 Impact on socloeconomic and soclo-cultural environment This pe of prcjects affects the most vulnerable families all along exdensive routes and of high socio-cultural diversity. One of Fe impacts Is the onset of conflicts, derived fron the inadequalte processes of negotiation and appraisal of tights of wcy. The ype of relationsrhip established betvsen the contos and the local communites can be likewse problematic, duinig project consuction. The inclusion of restrictive social criteria for the definition of tansmission line raoes, constitutes an important factor of progress for minimizing socioiulsral type impad on the populaton in areas the lines will affecL 3A ESTIMATE OF ENVIRONMENTAL IMPACT OF THE ELECTRICITY SECTOR After analyzing the main types of impact caused and the ervironmental problems that stll have to be worked out, originated by the projects of the electricity sector, it can be said that environmental impact on a national level imputable to the Colombian Electricity Sector is moderate. Notwithtanding, it could be noably reduced with the development of preventive environmenta management, a task that begm in recat yeas and which has been reinforced by the creation, in 1993, of the Ministry of the Environment Some aspects worth mentioning, in addition to those included in this chapter, are: * The demand on the environment caused by the elecrical system in operation nationwide is relatively small when compned with the availability of the existing naural resources * The hydraulic electric system uses rivers with a aggregated mean flow approximately equal to 1600 m3Os, that represents 2511000 of the country toal runoff. The reservoirs, including multipurpose reservoirs, occupy almost 360 kn' that repesent 0.3 to a thousand of the territory. The anas under water, as regards their agricltur chaacteristics, are distributed in 4.4%9 high-quality, 18% medium-quality and 77.B% low-quality soils. That is, SEICTORLENYVIRONMRENTAL AS-SESSMENT 1iS that the locauon of medium-to-high heads in mountain areas has not sigrdficantly competed with agricultural use. * The curent themWl-electric system emits about 3 Mtyear of carbon to the atmosphere, Mich corresponds to 20% of the emissions by fossil fuel in Colombia, which are of about 14 Mt/year according to the Carrizosa analysis (1991). The 14 Mt/year correspond to almost 0.4 ton/inhablyear, a figure that represents a third of the worddWde average emission per capita for fossil fuels. * The projects of the CES have been developed mostly in zones previously dedicated to economical activities, suffering deforestaton and colorizalion pmcesses. Which indicates that CES has not been the main degrader of the forest covering, alfthough some impacts have been caused. * The aneas directly affected by the electricity sector (acquisitions and rights of way), for the oonstucion of power plants and trannission lines, have an accumulated area of about 1200 km', equivalent to one part to a tousand of the national terriatry. Within this area, the zones affected by the mnirng activities assiated wth thermal-electric generation are * rot induded. The impact caused is of minimal proportions in comparison with national, regional and local economic accounts, notAithstanding, it has affected subsistence economies. * The overall impact generated on aquatic ecosstems, altough most likely still moderate, is not sufficienty documented either. * The sector's projects, especially the hydmelecrfic plants, have generated positive as well as negative socio-economic impacts on a municipal and regional level, vaich have not been sufficiently monitored; these impacts refer mairny to the transformatins of regional economic oargaizaton and of the social characteristics of the affected areas, • The sects projects have caused the displacement of an estimated total of about 30,000 inhabitants, mainly belonging to rral setUements of scattered popuations. The vey these displacements have been dealt with on the part of the sector has not taken into account the specific cultral values of the relocated gmups, nor their social, as well as their economic and cultural, vulnerability. Only as of 1991, wth the appmval of population relocation policies and their application afternArd, has prgress been made in the adequate handling of this impact * The loss of historical and cultural patrimony, constitutes a recently induded impact that should be reduced by the sector. The lack of coern, the absence of legislabon on the subject and minimum conceptual and methodological development for research on archeological salvage, implied very deficient treatment of this type of impact SECTOR ENVIRONMENTAL ASSESSMENT _S 4 INSTITUTIONAL ENVIRONMENTAL SITUATION This chapter describes the national situation of the official environmental departments in accordance vwth law 99, 1993, that created the Minisbty of the Environment. 4.1 MINISTRY OF THE ENVIRONMENT As the highest environmental authority, it defines the national policies regarding the environment, establishes regulations and criteria for envimnmental administration, determines the minimum environmental precepts and, in general, defines the administive instnhents ad mechanisms necessary for the prevenifon and contrl of the factors of environmental detenortion. 4.1.1 The Natonal EnvIronmentl Syyam (S.I.NA.) The National Environmental System is defined as the set of "guidelines, regulaons, aivities, resources, programs and instMutions that allow the implementation of the main environmental pinciples established by lamr. (ralde 4. Law CYQ3). The Ministry will be in charge of directing and cordinating the planning process and of the smooth execution of the activities of the National Environmental System. The S.l.NA is formed by the Environmental Departments responsible for environmental policies, the non-govemmental community organizations related with environmental policies, and the public, private or mixed companies, that cany out acivities for the production of information, scientfic research and technological development in the field of environmental management 4.122 The Natonal Environmsntal Council The National Enviwrnmental Coun:il is the organizing institution at a public level, of the policies, plans and pmgrams of the Ministry of the Environment In the Council, all of the Ministies; the Director of the Nationa Planning Department; the People's Defender, the General Comptroller of the Nation; the governors, the mayors, the productive unions, the universities, ethnic groups and non-govemmental organizations d an environmental nature are represented. 4.1.3 Regional Autonomous Corporatons The Regional Autonmo Coporations, as the mafdmum environmental authority in their respective jurisdiction -Ahut the functions of material planning and regional development that often used to interfere wth their activity of preserving and recovering the environment- are another impotant part of the new isituonal rganization fr the environment 42 POSITIVE ASPECTS * The irstitutional reorgnization of the public sector in charge of environmebtal management, with the unification of functions in the Urltisy. This prwides a soluion to the dispersion of competencies and functions previously granted to several Ministries, Institutions and Corporations. This importarn step will conribute to a more rational management of the envimnment * The definition and establishment of mechanisms so that the diverse members of the community participate and interact In environmental management, thmugh the SINA and the National Environmenal Council. * The establishment of ctizen partidption and the finwncing mechanisms that allow the State to develop its environmental polices. • The reprsentafton of environmental matters In the CONPES, that will allow to give the subject the political stats It needs. * The foundaion of Research Instiues that will seve as techrlcal mnd scientific support to the Ministry of the EnvironmenL * The definition of mechardsms for inter institutional coordination of the public sector concerned Wth the environment. * The assignment of new funds, 4.3 ASPECTS TO BE CORRECTED The competencies of the official tentorial departments and the Regional Autonomous Corporations are not defined with suffident precision, in such important aspects as the management of watersheds, the environmental organization of the territory, or the systems for supevision and control. In the delimitaton of some Regional Autonormos Corporations, the criteria on ecosystem unity, biophysics, etc. established by Law, were not observed. The delimitation vies cofined to adapting these aspects to provincial legal-admiristmtve divisions. Mnother aspect that could cause coDnflict of juisdiction in the future, is the power given to the muriicipalities, metmpolitan areas or districts whose urban areas are inhabited by more than one million inhabitants, for granting licenses, permits, concessions and authorizations, on the same level as the Regional Autonomous Corporatins. From row on, the provinces and mnixidpalfties will issue their aom environmenrt regulations (subject to the principles of regional agreement and subsidiary stictness). The Electicity Sector does not participate in any of the organizations that form part of the institutional stuctu. By that reason, is reqtired that the CES become irwolved with the process of regulation in order to assure that foreseeable pmblems are corrected. SECTOR ENVIRONMENTAL ASSESSMENT Is S. LEGISLATION REGARDING THE ENVIRONMENT 5.1 ENVIRONMENTAL PRECEPTS IN THE CONSTITUTION The Constitution of Colombia ses forth the legal gLidelines of the nation within the concept of a democacy of paricipion and plurwalism that guaLrantees the rights, duties and obligations of the State as well as the citizens. A sound enrironment is included in mhe Conslitution as a basic principle of fundamental collective rights. In addition it defines new guidelines for the managemnent of erwironmenta maiers in the country and establishes the obligation of protecting the NalioYs nahtual and cultural resources and meeting the needs of public health and conservation of environmentally sound living conditions It sets forth the State's duty of protecing the diversity and Integrity of mhe environment, of planring the management and use of the natural resources in order to guarantee sustainable development, conservation, restoration or substitution, and of avoiding and contrtlling factors that deteriorate the environmenL £2 THE RENEWABLE NATURAL RESOURCES AND ENVIRONMENTAL CODE Issued through decree 2811 of 1974, it deals wth the aspects related to environmental policies, regulations on environmental conservation, owiership, use and influence of me renevable natual resources, and establishes genrl reulations relative to the ar, the atmosphere, air space, pdrmary energy resources, goo-therma resources, flia, faua, counryside ad natual landscapes, and hydrobicoogical resoures. The Code has ben partially regulated through decrees refening to the fllowing subjects: Obligatons of riverside property owmrs regarding e consenration of viter, forests, land and other renwable natual resoures; rogulations on the use of water; quality control of bodies of wter, plarving of vAtersheds; prioites for fores exploition. 5.3 LAW 99 OF 1993 - CREATION OF THE MINISTRY OF THE ENVIRONMENT The following are the general principles of the environmental policy: The process of the countys econoric and soad development shall be oriented pursuant to the univesal principles of susainable devdopment, contined in the Rio de Janeiro declarationr The country's biodiversity, because it is a nationa patrimony and of the interest of humanity, must be protected prioritafily. The polides on population shall take into account the right of human beings to a sound, healthy life, in harmnyr vwth natire. The prnciple of Preuton shall be enforced, vwhereas wten there is danger of grave and irreversible danger, the lack of absolute scientific crtainty must not be used as a reason for putting off the adoption of effective measures in order to avoid the devastaion of the environment. The State shall promote the inclusion of environmenta costs. Action for the environmental recovery and protection of the courty, is a joint and SECTOR ENVIRONMENTAL ASSESSMENT le cooninated task ben the State, the cornmurity d the private sector. The studies on environmental impact shall be the fundamental instnument for taking decisions regarding the conrucion of projects and activities that significanty affect the natural or artificial environmenL The environmental management of the country, in accordance Wth the Naional Consttution, shall be decentralized, democratic and vith ctizen partidpaton. The national environmental system -SINA- defines the mecharisms for govemment and civil actionr 5.3.1 Main duficisncles The bio-physical component is stll the most important one in the Law the human component (sodal, cutueR) is not present an iL NotWthstwing some crite for defining environmental costs are determined, the wny the opportwir costs and depreciaton of natural resouces are integrated in a environmental accounting, is not deafly established. 5.3.2 Negative aspect - Does not incorporate aithropological dimension to the concept of environment Continues giving priority as does the actu environmental laws, to biophysical aspects, wMich will result in new difficulties for interpreting the law in its complete social dimension. - The participation of the Terrftorial Organizations in the assemblies of the Regional Autonomous Corporatons is not equitable in its conception. - Creates the National Environmental Fund, but its financing system appears to be weak and random. - Although it aclmMedges the paticipation of some sectors of production in the orWnizations that support the Ministry, it is inexplicably silent rgarding other sectos SA ASPECTS OF PRIORITY AWAITNG LEGISLATION The electricity sctor must participate in the regulation of law 9M93 especially as regards the fdllowng aspects: * Reogulation of Mechanisms for community participation * Definition of citeria for preparing environmental diagnosis of aitematives and Environmental Impact Assessments E. Definition of aiteria for establishing envimnmental costs. *. Definition of secor environmental policies. E. Modification of law 56181 and that relative to tariffs and taxes. SECTOR ENVIRONMENTAL ASSESSMENT _ * Definiton of criteria for establishing the maximum limits of emission, freight, and transportation of substances or products that could affect the environment on a natonal or regional level. R. Integration to the National Environmental System and to the Envimnmental Technical Committee. SECTOR ENVIRONMENTAL-ASSESSMENT 21 6. ENVIRONMENTAL POLICIES OF THE SECTOR 6.1 ENVIRONMENTAL POLICY OF THE ENERGETIC SECTOR Recently, the Mining/Energy Planning Unit produced a preliminary version of Colombia's Energy Plan, which includes the environmental aspects regarding the sector. The main principles of the environmental policy of the energy sector are the following: * To maximnize the benefits and minimize the negative aspects, both national and regional, so as to contribute to the improvement of the population's living standards, the equitable distrutiuon of opportmities and the conservation of the environment and of the countqs natural and social patrimony, with a criterion of sustainability. * To consider the environmental dimension as a deternining factor in the proess of decision making regading the sectoes projects. a To assign necessry and sufficient financial resoutaes in order to respond to the positive environmental development of the sector and likewise incorporate them to the conesponding budgets. * To develop the environmental marngement of the sector emphasizin prvention, without prejudice to contol, alleviation and compensatio * To prcure the paricipation of the community that coud be affected by the projects, in the process of environmental decision-making and manwgement, within an atmosphere of muktu respect and solidaty. U To incoporate technologies of prwen effiiency for prevention and contrl, that offer appropriate and opporne solution to ernimnmental prblems. * To promote the integration of the energy subsectous regarding environmental maners. * To develop up-toate and reliable Wledge on environmental matters. * To promote corporate and individual responsibility and commitment with environmental management in the construcn and operation of the projects. * To promote and/or support the presence of different Govemmental institutions in the regions where the prqects are to be executed. * To promote the policy of savings and efficiency in the use of energy sources, in favor of ecological, environmental, social, economic and technological efficiency that will serve as a stepping stone for achieving sustainable development. 6.2 ENVIRONMENTAL POUCIES OF THE ELECTRICITY SECTOR The environmental policies and procedures of the CES are determined by the legal organization that exists in the country, especially in the Renerble Natural Resources and Environmental Code, in the National Sanitary Code and its regdations and in law 56 of 1981 and its reguation 2024 of July 12th, 1982 mid law 99 of 1993. Ukewise, the guidelines of the National Planning Department, contained in documnent 2544 tied "An environmental policy for Colombia", are observed. In development of one of Its basic objectives, the CASEC has been creating policies, regulations and procedures on environmental matters, In oider to be adopted by all of the agencies of the electricity sector. The policies approved up until now are the following: * The Pdicy for Social Management fft Citizen Parlicpation (August, 1990) which establishes the social methods and principles that nrle the relations of the companies with the communites affected by the projects, Intended to achieve active paiidpaion and agreements regarding the evaluation of problems and the conception and execution of solutions. * Pdicy for the Relocation of the Displaced Population due to the projects of the Colombian electridty sector, approved in 1992, which establishes the sodal criteria for relocating the displaced inhabitants and defines the actions that must be taken at each phase of relocation, from priminary studies and the relocation of the families to their adaptation to - the new sunrundings. The CES cormpanies have adopted policies which complement environmental pogress in establishing cnteria for the matters of greatest interest to each company. In development of the assessmern, the followrng companies fuimished information on their polides: Intervonexdon Electnica SA. ISA, Empresa de Energia de BogotA (Bogota Electic Company) - EEB, Central Hidroelectrica de Caldas (Caidas Hydrelectric Pl1t) - CHEC. Carporacidn Autonoma Regional del Valle del Cauca (Valle del Cauca Regional Autonomous Corporation) - CVC, Central Hidmelectnica de Betaria (Betania Hydroelectric Plant) - CHB, URRA S.A. and Empresas P1iblicas de Medellin (Medellin Wlities Cornparies) - EPM. 8.3 ESTIMATE OF POUCIES Over the last few years, the national government, the energy sector and the electric sub-sector and its companies, have made notable progress in the conformation of general and specific policies regarding the environment. NotWithstanding the above, special effort is still lacing as to inter-sector implementation, its unificaton and completion wihin the sector and its up-dating in the light of the latest constituional and legal developments The establishment of a complete set of environmental procedures and regulations goveming the different activities of the electricity sector has yet to be initiated. SECTOR ENVIRONMENTAL ASSESSMENT 23 7. MANAGEMENT OF ENVIRONMENTAL MATTERS IN THE ELECTRICITY SECTOR In this chapter, the environmental planning and manaement of the CES companies In hydroelectinc, thermal-electric and transmission line projects is analyzed, and concludes with a strategic estimate of the strong points and weaknesses of envlronmental management. The companies of the sector count with environmental departments of Important hierarchy, although some have considerable professional voids, especially In the areas of social sciences and ecology. NotWhthstardng the above, the achievements and the level obtained by the Environmental Units of the Electnicity Sector, constitute a strong point In the development of sector environmental management, whidc must be maintained and improved. The agencies of the sector Interact, through their environmental units, with diverse national and regional institutions, for the executon of spedific ecological and social programs. Prgress has been made In the exchange of experiences and the development of methods for the adoption of some polices, through the CASEC. 7.1 ENVIRONMENTAL PLANNING The environmental planning of a project adapts its general concepion to the physical, biotic, cultural, political and socio-economic reality of the region More it is implemented and defines the specific environmental measues that must form part of the project to assure its best adaptstion. In the last decade, a relaively rapid evoluton has been registered respeding the quality of the environmental planning of projects. It began with an enatic appmach to environmental matters, in the 1970Cs, when systematic evaluations of environmental problems were not even performed, up to the Ws and Ws, Mten actions have been taken for including the environmental dimension in all of the stages of project conception and design, and detaited assessments of environmental impact are canied out with a management plan that Is Integrated to the general programs of execution of the wks. The following tables show the scope of environmental activities in each of the stages of project sequence. ENVIRONMENTAL SCOPE OF GENERATING PROJECTS, BY STAGES II* 0* _ L 4 j SURVEY General identification of environmental conflicts and restctiorns. PREFEASASILITY Comparative analysis of the envimnmental implications of the projects and their altematives and recommendation of those that ar environmentally _ feasible. FEASIBIUTY Detailed evaluation of the environmental impact the project will cause. Predesigning preparation of the Environmental Management Plan and statistics for making the project environmentally compnable with others that, on a national scale, are at the same stae. DESIGN Evaluation an recommendation of possible technical changes derived from the environmental analyses in order to attain the optimal environmentaftechrical balance of the project. Detalled design of the Environmental Management Plan. CONSTRUCTION Execution of the Environmental Management Plan, which includes the .______________ application of the environmental quality system. OPERATION Expost environmental evaluation. Execution of operation EMP. SECTOR ENVIRONMENTAL ASESSMENT 2 ENVIRONMENTAL SCOPE OF TRANMISSION UNE PROJECTS, BY STAGES STAGE ENVIRONMENTAL SCOPE PLANNING Analysis of the environmenta restlictions of the zone wvhere the prolect Wi be located for the selection of route alternatives. DESIGN Envirnmontal analysis of altemative rmues. Selection of the optimal route from a tochnical/onvironmental point of view. Information to community. Detaled evaluaion of envirnmental impacs and design of the EMP. PRECONSTRUCTION Preparatlon and Inclusion In the conditiorn of the general and specific environmental technical specifcations. Community Infomation and ________________ survey. Negotation rights of v_y. CONSTRUCTION Execulion of the Environmental Mngement Plan. Agreements Wth the community. Applicaton of the Quality Sytem. OPERATION Performance of expost evaluaion and execution of the operation EMP. 72 ENVIRONMENTAL MANAGEMENT Environmental management is compused of all of the cions necessmy for performing an adequate inseiron of electric projects, to the natural and human environment of the localities and regions Were they are canled out The Colombian Electicity Sector has exercised environmental management charactoeized by different degrees of organiztional and conceptual development. Said management has been considerably affected by the weaknesses in the national environmental system, legislation and institutional organization, and the reduced avallability of profssinals and resouces in the Envirbnmental Units. The environmental management of the sector cieaidy presents significant strong points that, wthout beirg optimum, constitulte the leading developmerits on a nationsl level. The electicity sector took charge of the establishment of law 5/1981, an instrument for environmental management that has filled voids, determined respxnsibIlities and assigned funds for mom than a decade, row. The followng table shows the value of the obligatons of law 56/1981 paid up to 1991 by the companies that own the twelve hydroelectic pow stations of the sample. FUNDS FROM LAW 66,1981 (THOUSANDS OF2199PESOS) COMPANY HYDROELECTRIC STATION VALUE OF OBUGATIONS PAID UP TO INI EES MESrTAS 632,199 GUAVIO 487,136 EEPPM GUATAPE AND PLAYAS 3878,041 RIO GRANDE II 25,445 CHB BETANIA 529,681 ISA CHIVOR 13,676,573 SAN CARLOS, JAGUAS AND CALDERAS 20,416,066 CVC SALVAJINA 1,288,642 TOTAL 30,65,141 Soutce: EWInOIItS Cho of Hfhdsdnlc Stdan. CASEC. Sf F de Bega. Febry. lam. SECTOR ENVIRONMENTAL ASSESSMENT 25 * Corrective management In the past environmental actions in the Sector vmre mainly of contingency. The corrective nature of the management, for the sector, implied the taidng of emergency measues for wMich there was not enough knowvedge or shtregies. In recent years, progress has been made in overcming the need for corrective management, direcUy associated with the progress made In environmental planning. * Preventive management Environmental management of a preventive nature has consttuted one of the most important achievements in the sector. This type of management resuits in an increase of the quality and Umeliness of studies on environmental impact the refinement of the indicators for the identificaton and evaluation of the different kinds of impact, and the designing of environmental management plans. One of the sectors contribtions is the grdual and interdsciplinary formation of the concept of environment from an integral perspective, vAth the inclusion of the different analytic dimensions of environment (physical, biotic, social, cuitural, economic and political aspects) as vmll as the application of these considerations within the technical sequence of projects. 7.2.1 Management In Hydroelectrlic ProJects Research and prgrams on the abiotic environment wer one of the earliest actions, given their immediate ordrelation wlth the functioning of the pow-generating facilities. Thus, prgrams on the quality of i&ter, landslide contrl and follow-up on the conditions of the watersheds feed the reservirs have been implemented. The handling of impact on the counts biota, of hydmelectic projects, is considered incipient, but hydrobiological assessments and aquacultural prgrams have been caried out. The general policy of the electricity sector recognizes the need to avoid affecUng protected areas (National Parks), but cases still arise vhere said areas are invdved in the projects. Social management Is done through follow.up on the impact to families, communities, municipalities andlor regions. From the point of view of management of the socio-economic impacts to families, i is der that the predominant criteria untl a few years ago, in accordance with law 56 of 1981, W8S that of financial compensation, such as monetary benefits and the direct purchase of lands committed in the projected. However, some experiences regarding popyiation resettlement we registered, initially owing more to pressure from the communities than to social conviction on the part of the Companies. As of 1991, the criteria of relocabon of the displaced population was adopted as the sectores basic policy. In short, over the last decade, the social impacts have been dealt with according to the guidelines of law 56 cf 1981, mainly with investments in the construction of road infrastructure and municipal improvements. Pmof of the latter is that companies that own the projects of the sample, during the period under consideration, performed a series of infrasucture vyorks that can be summed up as follows: In education, the construction of 31 public primary schools and 6 public high schools; in the area of health, 3 hospitals and 12 public health centers; in utilities, 4 4vter systems and 10 sevage systems; in other services plazas, slaughterhouses, recreation centers, chapels, road conditionirg, construction bridges, roads and cultural centers. SEC-OR ENVIRONMENTAL ASSESSMENT 26 In the projects Included in the sample, the principal causes of complaint on the part of the commurity Yae: - During constnctlion: Delays in paying the and purchased. deteriraaion of roads, negative effects on private pr ty, damage to cmps and housing, loss of surface wnters, loss of miners' work places, landslides, dust and noise pollution end pollution of voter. - During operation: Flooding of lands an the riverside, icrease or reducion of flow volumes due to the diversion of rivers, negafive effects on roads, conflicts with miners, pollution to water due to seepage from unnes aid delays in the fulfillment of the agreements made Wth the commurities. These complaints were attended thrugh individual negotations With those affected, or vwith some type of corrective acion vhere mdiation as obtained from other social agents such as commuirty leaders, community boards of ation paishes, mayors and councils In general, the management developed has shown a lack of altemabves and proposals that involve the evaluation of the socio-ctural cisis generted by the impacts of the projects. Nevertheless, sgnificant prgress has been made to that regad by the sectorin the last few yes As an overall condusion, it could be said that the lecricity Sectoes environmernal management has been more corrctve than preventive. 7.2.2 Management In hermal-elec projects Although the scopes of the environmenta activities in the stages of the themal-ectric projects have not been standardized, the consideration of the environmental factor has recently been included in the specifications, design and cnstuction of projects. The criteria employed for the locaion of powr plaits has Sways been the distance fMm centers of fuel production and distribuUon, and the availability of reliable sources of water, mainly for cooling. The ernvironmental variables have rnot had an influence on the selection of locations for project siting. One of the most important accomplishments of the Environmental Committee of the Sector, CASEC, is the establishment of the Thermal Environmenta Sub.group, which produced the document "Envimnmenta Chacterization of Themlelecric Plan", where valuable informaion was gathered an the operaive, ecological and social aspects of most of the sectors thermal plants that use coal, gas or fuel oil. As pwt of the recommendtions of the CASEC, the creation of the Thermal Plant Environmental Maagement Units has been created and other actions of an organizational natuve have been taWn, th if put in practie, would cornribute to the improvement of Environmental management at thermal-electric plants. Regading ecological actions per se, they practically do not exist in power-plant opaion. The only case found ws that of the Termozipa plant, vAere tU samples of air quality over a period of nine years have been taken, with the use of lichens as bioindicatos, incidentally registering an improvement in the quality of the air wffl an increae from 27 initial species, to 35 species of lichens as a remit of the incorporation of electrsftc filters. Socio-economic maragement is incipiert In some cases, the purchase of coal from small producers, due to the operation standards of the thermal plants, has generated significat impact SECTOR ENVIRONMENTAL ASSESSMENT 27 on their family economies. There are no dear mechanisms for marketing that voud guarantee the stability of prices and the demands for volume made on small miners. As in the case mentioned above, no type of soio-cultural management has been observed for thermal-electric projects. It is fundamental that a systematc assessment be Included in the surveys for fute projects, of aspects such as: - Inter cultural relationships during the periods o constucton. - Archeological recoveries. - Monitoring and contro of public health during operation. 7.2.3 Management In tranumiulon lines The impacs on the abictic environment of transmission lines such as the first 500 Kv circuit to the Atantic coast were caused mainly by the consrucion of roads of access, (1,048 Km of highways for 523 Km of line) and affected Iand and forests, with the consequent destabilization of slopes and tower sites, wMich gave motivation in 196 for the perfonnance of studies on environmental impact, prior to the consucion of electricity transmission line projects, vthout the existence of any demand frorn an environmental authoriy. From purely corrective actions, based on reforetaion or grass-planting near the pasageweay of the lines, gradually the planning of the routes for the lines has been implemented, aiming to avoid impact on the biotic environment at a reional level. The planring of the paths for lines through the De Oca Mountains and Munucuca Hills (ISA, 1991) is an example of this tendency. Soao-economic management performed in this part of the secor has progressed in regional diagnostics and those of tower-siting, foreseeing impacts on production in the vicinities of the rights of vy and dassifying the population by degrees of vtlnerability and developing resettlement programs for the displaced population. Socio-cultual management is very recent (as of 190) and has been oriented toveds the inclusion of specific considerations for the tower-siting and comtction of lines. The agreement made vith the Wayuu ethnic group for the consucton of the Intercnmection vith Venezuela is wmrth mentionirg. Through seminars Wth the pwticipation of indigenous repsentatives, agreemenits were reached on employment, inter ethnic relationships and respect for territonies and ceremonial and sacred sites. In a similar viy, there is a significant prgress in designing and implementing programs for archeological salvage. SIEC-TOR-ENIROMENTALASESSMENT - 7.3 GENERAL CONCLUSION, STRONG POINTS AND WEAKNESSES OF THE ENVIRONMENTAL MANAGEMENT OF THE COLOMBIAN ELECTRICITY SECTOR In the different companies that belon to the sector, onvironmental maters, in a relatively short period of time, have gone from being Ignored or minimized to constituing a priority. Advances toward a preventive management have been achieved. There is political support in companies of the sector for affmnting the environmental proems associated with their projects and this is one of the most importan fortes of the Colombian Electicity secor. Ukewise, the folbMAng stron points should be emphasized: * Development of an integral concept about environment, which articulates abiotic, biotic and social aspects. * Availability of sector polides for environmental problem magement * The foundaon anid grdual development of environmental units In the CES companies. * The foundation and development of the Environmental Committee of the Colombian Electricity Sector -CASEC-. * The gradual moving from coectve to preventive management The w eaknese of the CES in the development of its management are: * Disparity in the environmental developmert of the comparies v Academic and instiutional segrgaion * Umitation of resources for environmental units SECTOR ENVIRONMENTAL ASSESSMENT 29 B. METHOD FOR ENVIRONMENTAL EVALUATION OF THE EXPANSION PLAN 8.1 CURRENT METHOD The evauaton of the environment, due to the multiple ealities that it is comprised of (physical, biotic, social, cultural and ecoanmic), necessarily reqtires a method Wire each of those realities can be explicily dealt Wth. To that end, the sector has chosen the metod of multi-objective analysis given the possibilifies it offers for carrying out the processe for the selecion of alternatives, considering various objectives simultaneously and assigning a degree of importance to each one. Regarding the method applied, the following points an! worth menonng: * Integmtion of the biophysical and social aspeds in the same muti-objective function. * Integation of themWl and hydroelectric plants applying homogenous environmental parameters for their evaluation. * Incorporation of the scale of prferences of the decision maker. Five objectves have been determined whiere the most relevant impacts of the power generation, hydroelectric and themial pnrjects are compiled. Each objective, in tum, is made up of one or several criteria, each selected with the specific purpose of evaluating a partiaJar pe of impact Each criteron, therefore, is part of the total environmental evaluadion and is associad with a group of selected variables in such a vay that they are relatively easy to obtain based on the feasibility shtdies and that through a logical relation between them- deternined by the nature of each phenomenon in particular, an indicator is established of the magnitude of impact to which this crierion refer. Once the impact is quwntified by means of the indicator, an "environmental impact function" is applied, that turs this indicator into an evaluation for each of the aiterla. The method is conceived for evaluating individual projects or expansion plans, that is, groups of projects that fulfill an imposed objective of cwverage of demand. For that purpose, once the projects that will conform each alternative of the expansion plan are specified, the impacts of each proect are gradually added to achieve the evaluation of the plan as a whole. The objectives weighed, their respective criteria and their factors of evaluation are the fdlowng: SECTO0 R ENVMiRON MENTLMASSSMIENT 30 % of Evaluation * Minimizing Impact on the Ablotic Environment 20.4 - Pmject area stability - Flowvolume increase of receiving flow of wter - Reduction of flow volume - Water quality - Air quality * Minhuizing Impact on the Bloatc Environment 22.7 - Bista of land ecosystem - Biota of aquatic ecosystem - Biota of other ecosystems * Minimizing Dsplaced Populaion 20.7 Displaced popuiation * Minim lung Regional Cost. 18.5 - Required ama - Pmduction - Loss of historical pabimony - Adverse effects on reginal anzation - Social tuma - Employment - Conflicts * Maximizing Regional Bnefit 17.5 - Improvement in the material cornmuricalions netwrk - Benefits other than that of energy - Improvment in nrur electilfication - Improvement in availability of social investment - Otherfundsfrom LowE5B8B - Generation of employment in the region 8.2 UMITATIONS OF THE CURRENT METHOD The present method of assessment of the expansion plans reprsent substantial prgress in the integral examirntion of the envimnmentl impact of projects and plans. Hovwever it does present some limitations * It does not take accumtiated effects into account * The evaluation and other representations of the scale of preferences of the decision maker, involve a high level of subjectivity, hovwever, once established, it is the same for all of the projects. SECTOR ENVIRONMENTAL ASSESSMENT 31 * The procedure Is designed for decision-making by one decision maker whereas, in the sector, a situation Involving multiple dedsion makers is the nomn. * The analysis submifted Is of a deterministic type, but there are criteria and indicators that should be evaluated In a context of uncertainty. * The scale of preferences as well as In environmental varIables change in tme, that feature is not considered by the procedure proposed. * The impacts generated by transmission lines associated to each expansion plan or projects are not included. The nex development of the method, set forth by the ISA in 1991, consists in Integrating technical, economic -,d financial factors to the environmenta factors, through an expanded mut-objective function. .other developmenis foreseen have to do Wth the Introduction of the consideration of uncertaintUes and of a system of time appraisal. SECTOR ENVIRONMENTAL ASSESSMENT 32 9. PRESENT STRATEGIES FOR SECTORIAL DEVELOPMENT AND THEIR ENVIRONMENTAL IMPLICATIONS 9.1 PRIVATE PARTICIPATION AND FREE COMPETITION As a consequence of the strategy for promoting free competiton and private participation, an important part of the projects for electrical expansion are to administemd by the private sector, including their environmental management which Hill no longer be done by the public organizations of the electficity sector, vAilch have assumed their social and environmental responsibility developing considerable management capacity over the last tow decades Recent experiences shows that doubts exist on how the private sector is going to assume this responsibility wih the environment The control of said projects is left solely in the hands of the national and regiona institutions, whose present capacity of evaluation and control is uncertain; this weakness oould be substantiaily checked by citizen controi thrugh mechanisms of participation and defense of individual and collective rights. 9L2 INDICATIVE RATHER THAN RIGID PLANNING The obligatory centa plianning used in the past was intended to achieve optimum energetic development from technical, economic and environmental perspectives. With the current strategy, the option of expanding the system is left to a large number of projects vith diverse environmental quality standards, among Mhich thoe that ae able to attract investors that can obtain environmental license from the competent authorities Wil be executed. Under these circumstances, an environmentally rational expasion or the CES is not assued. For that, new regulating mechanisms for putting law 93 into practice must be created with urgency. 9.3 PARTICIPATION OF REGIONAL INSTITUTIONS A strategy has been adopted for promoting the participation of regional institutions in the electric projects. This strategy apparenty will facilitate the integration of the regWonal factors in the planring and operation of projects and provide possibilites for the efficient development of multi-purpose projects. On the other hand, the process of planning and decision are made more complex by the introduction of elements from regional and local policies. 9.4 INTEGRAL PLANNING AND REGULATION OF THE ENERGETIC SECTOR The existence of the National Energy Plan and the regulation and planning of the electricity sector within a context integrated wit the other energetic sectors, through the Energy Regulation Committee and the Mining/Energy Planning Unit, allow to improve the coorination of the sectoes actions for rationalizing the use of the countrys energetic resources. However, the adequate incaporation of the environmental factor in these regulating and planning process has rot been deafly established. 9.5 INCREASE OF THERMAL-ELECTRIC GENERATION Increasing the thernal paaticipation in the electric generation, as adopted, is i sbtregy that implies SECTOR ENViRONMENTAL ASSESSMENT 33 an incease of impacts derived from mining, transportation of fuels, fuel combustion and disposal of unbumt materials, and, in comparison, a reduction in the rate of constnuction of hydroelectric stations and in the rate of accumulation of the impacts generated by this type of plants. The short-term thennal projects based on coal considered as altematives for the expansion of the energy-generating system, in general lack stdies for optimizing their location and defining the required environmental management. Inasmuch as a substantial palt of the new thermal-electric genertion is planned based on gas, the corresponding environmental impacts will be reduced. 9.6 INCREASE OF ENERGY-EFFICIENCY The stategy adopted included greater attention for the improvement of efficiencies and to the use of the existing plants, which implies direct environmental benefits. The CES Expansion Plan recommends the configuraton of a policy that promotes the use of non-conventional renewable resoumes existing in our environment (ealian energy, solar energy, biomass, wastes) and the definition of energy-saving and energy-efficiency programs with realistic goals that will lead to better use of available resources. The policy of granng incentives to users in proportion to savings achieved has had excellent results. 9.7 PROJECT SCALE A policy has been adopted of perfoming system expansion through medium and small projects. Ths policy has two basic environmental implications: - In some cases it couid lead to defidient exploitation of naral resources, when, due to the limitatons imposed, a magnitude of projects is adopted that is significanty lower than the optimum potential from the environmental perpective as well as that of the efficient use of natural resources. - Despite the fact that, frequently, small proecs are more easily managed individually, the acumulated impact of small projects often exceeds he impact generated by energetically equivalent large projects. Aspects such as roads, transmission lines and camps, normally depend more on the site and the type of project than on its magnitude; on the other hand, furidamental impacts such as those caused in the aquatic ecosystems dowstream, could depend mnore on the wtersheds used than on the magnitude of energy uses performed on the same. 9.8 CONSTRUCTION OF NEW HYDROELECTRIC PLANTS In the Expansion plan the decision has been made to proceed with the consuction of the Urra I project and continue with the preliminary staWes of several other hydroelectric projects that are considered options for the medium-tefm expansion requred (Pome 11, Miel 1, Miel 11, Riachon, Calima IlIl and Ovejas Diversion). Although these projects could probably be developed maintairing their environmental impacts within acceptable limits, there are still considerable doubts rgarding some of them as to their actual effects and the required measures of preventon and management SECTOR ENVIRONMENTAL ASSESSMENT 34 9.9 STUDY OF NEW POWER GENERATION PROJECTS The Expansion Plan defines research programs, on feasibility mid design, of the thermal generating and hydroelectric projects that consthute medium and long-term altematives. Arnieros del Micay has been denied environmenta feasibility. The other projects programmed for design, do not count vwi the opinion of feasibility from the envirmnmental authoriies. SECTOR ENVIRONMENTAL ASSESSMENT as 10. ECONOMIC EVALUATION OF THE ENVIRONMENTAL IMPUCATIONS OF THE ELECTRICITY SECTOR As is well knoni, the economic implements for evaluating environmental effects and the natural resources, and knlovedge on the subject in Colombia, are incipient. Due to the above, this chapter is limited to the indication, on one hand, of the need for theoretic and practical development in order for progress to be made in achieving a dloser approximation to the identification of economic effects of the environmental impacts caused by the acivities of generation and consumption of electric energy in the country, and on the other, to the iitSal presentation of methodological options. It is an initial effort that must be complemented and developed, given the importance the subject acquired with the adoption of law 993. The intention was not that of obtaining an economic quantification of the environmental effect of energy-generating projects in progress, in service or those proposed for the sectors development, but of examinirg a few cses in order to demonstrate the possible applicaion of the methods proposed. Special effort is being made to emphasize the importance of applying some methods of economic evaluation for maraging and socially maximizing the economic benefi that can be * derived from the use of natural resources, in the context of the new development strategy proposed for the sector, characterized by the intention of puivalizing the generation and distribution of electnic energy. When spealdrg of "environmental economy", reference is made to the development and use of tools for firnial analysis, developed by economic theory, based on the principles of the theory of well-being and the market economy. This means at the designation of use of the diverse resources observes criteria defined by the relative prices and within an economy of competition and private property of the productive factors. The starting point and the main consideraton defined in this chapter, is the different pesentaion and treatment of EN\IRONMENTAL MANAGEMENT EXPENSE (EME), the ENVlRONMENTAL EFFECT (EE) and the ENVIRONMENTAL ECONOMIC COST (EEC). refeuing to the diverse environmental impacts derived from activities related with the development of the Colombian electricity sector. The need for an adequate economic evaluabion of the naural resouces used by the sector is evident This evaluation acquires special importance when the perspective of a boom of market laws in the sector and privatization in the generation and tansmission of electricity is imminent A consequence of privatization is that the public sales pices must be linked vwith the generation costs of the plant with the greatest relative costs that delivers energy to the system, in that plant, the marginal cost must be equal to the marginal income and the latter, in tum, to the sales price. * LIMITED INFORMATION The existing information does not allow an economic evaluation of the environmerital impacts generated by the development of the sector. However, available information provides grounds for sustairing that the Environmental Maragement Expenses in which the sector has incurred, in general have not covered the Environmental Economic Costs. This statement is based on the following: - In the case of the thermal-electric plants and some transmission lines, the Studies on Environmental Impact have showw deficiencies in the identification of the Environmental Effects related with each project, due to which the corresponding Environmental Management has had to SECTOR ENVIRONMENTAL ASSESSMENT 35 deal vith limitatons. This mean that the sector handles said Environmental Effects as extemalities. - Regarding hydrelecric powr staions, the Studies on Environmental Impact have been more thorugh and include better and more detailed diagnostics, howaver, rnot all of the Environmental Effects have been detected or evaluated, and the "affected areas' have not always been correcty estimated. - No evaluation of the economic efficiency of Envimnmental Monagement Expenses exists. Many management expenses cotid be Inefficient and not achieve the reduction of Effects on the Environment Up to date, the sctor has registered its Erwironmenta Mngement Expenses as If though they were effiient SECTOR ENVIRONMENTAL ASSESSMENT 37 11. PRESENT TENDENCIES AND POSSIBLE FUTURE PERSPECTIVES FOR THE ELECTRICITY SECTOR AND THE ENVIRONMENTAL SECTOR 11.1 THE ELECTICITY SECTOR The tendency and the fulure perspectives for the Eleicdty Sector are definitely positive. The National Govemment has gradually designed and Implemented polides and mechanisms that allow to foresee a more adequate area for the performance o me Sectos functions as the nucleus of the country's social and economic development. The fdloWing measures are vwlh mentioning: - The existence of the bills for Electric and Ulities Law, the progress made In their discussion and their provision for an approprate basis for the transformaion of the Electricity Sector. - The financial consolidation of the Sect% product of the financial support extended by the Govemment * - The favorable perspectives for natonal and foreign private investment in energy- generatirg projects. - The process for establishing compeition and efficiency for the developmrent of public and private agents. - The existence of the Reference Expansion Plan, Wiich offers aniple possibilities and creates dear opportunities for investors. - The process, in course, of the preparalion of the Nalional Energetic Plan that includes the planning of the Electicity Sector in other energetic subsectors. Greater centralization in the establIshment of policies, in the regulation of the energetic activities and in the institutiornal arganization of the sector, at first, seemnly does not give rise to direct environmental implications. But, in any case, could have indirect consequences since it is expected that a better unified electricity secr, Mth a conscientously prepared global policy and that includes evaluation and soluions, not only of energetic matters but also of the environmental problems that are involved Wth such ativities, will doub11essly produce envimnmental benefits. On the conray, institutional disorgarization and the dispersion and incoherence of policies and regulations produce the undesired effect of failure of energoetic and environmental policies. Therefore success is expected in this centralizationfmodernization process, and because of that, it is perfecdy logical that the Ministry in the area can delegate its functions to the different Ministerial dependencies, to its decentralized insitutions, to the tenitorial establishments or to any Authority, except for the funcions of regulatin and planning (Dec. 2119 of 1992, art. 8). The Ministry of Mines and Energy must oonform an environrnertal unit in rter to implement energetic and environmental polides, in dose collaboration ith the Ministry of the Environment 11.2 REFORMS TO THE ENVIRONMENTAL SECTOR There is no doubt that the creation of the Ministry of the Environment and the Natornal Environmental System consitutes progress in the preparation, execution and coordinaton of a comprehensive environmental policy. The subject acquires a status and imponc that allows a balanced discussion with Ministries, govemoes offices or large utlites. The ewrtence of a Ministry SECTOR ENVIRONMENTAL ASSESSMENT * that educates, coorinates and directs all of the slate and private efforts In order to guarantee development of society and an eoonomy With respect for nature Is a fundamental principle for achieving sustainable energetic development. The perspectives set forth offer opportuniies a- veil as threats to the CES. Among the opportunities: the particIpation of the CES In an effetive regLaton of law 9 of 1993, through press for agreement with other entitles Involved. Among the threa: the possible Inease of encumbrances to be paid due to triffs for the use of resources, In addition to those that already exist, or the issuance of standuds that would effect the CES. SECTOR ENR-RONMENTAL-ASSESSMENT 32 12. RECOMMENDATIONS FOR A PLAN OF ENVIRONMENTAL ACTION 12.1 GENERAL ASPECTS This chapter deals vth the strategy and the sctions that are recommended so that the Electricity Sector can improve its peaforrnance, complying With environmental responslbillUes as defined in the Constitution of 1991, In law 99 of 1993, in the processes of modernization or the Government and privatization of the economy, and in the legislaive and institutional development in course. 12.2 BASIC PRINCIPLES The fdlowing are the basic principles that should guide the environmental performance of the sector and therefore the development and application of the recommended strategies and acfions * Sustainability wd efficiency in the use of natural resoumes, on a regional, national and global level. * Integration of the handling of environmental matters, based on the intimate relationship *edsting betvwen ecological and social aspects. * Respect for cuturl diversity, communities, families and individuals. * Promotion of Citizen and Community Perticipation. * Equity in the application of environmentl policies. * Quality in environmental research, programs, plans, actions, follow-ups and controls. Given the above criteria and with the purpose of improving the sectoes environmental development, the following strategies and actions are recommended: 12.3 RECOMMENDED STRATEGIES GENERAL PURPOSE To guarantee the continy in the procss of improvement of environmental maragement of the Colombian Elecricity Sector, as defined by the environmental legislation in force and by the Countus soio-economic and institutional change. STRATEGY#1: IMPROVEMENT OF THE INSTITUTIONS STRATEGY #2: IMPROVEMENT OF LAWS AND STANDARDS STRATEGY #3: IMPROVEMENT OF SECTORIAL POUCIES AND PROCEDURES STRATEGY #4: IMPROVEMENT OF SECTORIAL ENVIRONMENTAL PLANNING STRATEGY #S: IMPROVEMENT OF SECTORIAL ENVIRONMENTAL MANAGEMENT STRATEGY U: ACTIONS IN PROJECTS OF THE EXPANSION PLAN SECTOR ENYIRONMENTAL ASSESSMENT 4_0 ENVIRONMENTAL ACTION PLAN STRATEGY 1: IMPROVEMENT OF THE INSTITUTIONS PROBLEM ACTIONS IN CHARGE DEFICIENCIES IN ADAPT AND REINFORCE THE COMITE AIUBIENTAL MME THE DEL SECTOR ELECTRICO COLOMBUANO (NATIONAL INSTITUTIONAL COMMITTEE OF THE COLOMBIAN ELECTRIC SITUATION OF THE SECTOR), CASEC SECTOR FOR CONFRONTING REINFORCE THE ENVIRONMENTAL UNITS OF THE COMPANIES OF THE THEIR COMPANIES OF THE ELECTRICITY SECTOR SECTOR ENVIRONMENTAL COMMITMENTS - ENGAGE THE SERVICES OF SUFFICIENT QUALIFIED PERSONNEL - INTEGRATE THE LAND AQCUISMON AND COMPAN ES OF THE COMMUNITY RELATIONS DEPARTMENTS OF THE SECTOR DIFFERENT COMPANIES WITH THE ENVIRONMENTAL DEPARTMENT - INCREASE THE HIERARCHIC LEVEL OF THE COMPANIES OF THE COMPANIES ENVIRONMENTAL DEPARTMENTS SECTOR - DEVELOP A TRAINING PROGRAM WMr THE COMPANIES OF THE FOLLOWING SUBJECTS: SECTOR • ENVIRONMENTAL PLANNING AND MANAGEMENT OF THE THERMAL-ELECTRIC PLNS • ECOSYSTEMIC ANALYSIS METHODS . ENVIRONMENTAL ECONOMY, ECONOMIC APPRAISAL OF ENVIRONMENTAL IMPACT AND FINANCIAL AND MATERIAL ESTIMATE OF NATURAL PATRIMONY • ADMINISTRATION OF ENVIRONMENTAL MANAGEMENT PLANS (ENVIRONMENTAL MANAGEMENT) • NEW ENVIRONMENTAL LAWS * RISK ANALYSIS AND DESIGN OF CONTINGENCY PROGRAMS * ENVIRONMENTAL IMPACT OF ENERGY CONSUMPTION * EFFICIENT CLEAN ENVIRONMENTAL TECHNOLOGIES * ALTERNATIVE ENERGY SOURCES REINFORCE THE TECHNICAL CAPACWY OF THE MIN. ENVIRONMENT NATIONAL AND REGIONAL ENVIRONMENTAL AUTHORMES _____ ENVIRONMENTAL ACTION PLAN STRATEGY 2: IMPROVEMENT OF LAWS AND STANDARDS PROBLEM ACTIONS IN CHARGE DEFICIENCIES AND * PARTICIPATE IN THE REGULATION OF MME-COMPANIES OF THE SHORTAGE OF LAW M3. CREATION OF THE . SECTOR ENVIRONMENTAL MINISTRY OF THE ENVIRONMENT AND LAWS AND ADAPTION OF LAW 56S18 AND DECREE STANDARDS AS 2024/82 TO THIS LAW REGARDS THE SECTOR'S . ANALYZE EXPERIENCES DERIVED MME-COMPANIES OF THE COMPANIES FROM THE APPLICATION OF LAW 56 SECTOR * DEFINE ENVIRONMENTAL LEGISLATION MINISTRY OF THE FOR GAS AND OTHER NON- ENVIRONMENT CONVENTIONAL SOURCES * REVISE, ADAPT AND UP-DATE THE MINISTRY OF THE EXISTING STANDARDS ON ENVIRONMENT ATMOSPHERIC EMISSION AND UQUID WASTE. * ESTABLISH ENVIONMENTAL MINISTRY OF THE RESTRICTIONS FOR THE GRANTING OF ENVIRONMENT LICENSES TO PROJECTS: NOT ARTICULATED TO THE CATHMENT DEVELOPMENT PLAN LEADING TO THE DESTRUCTION OF UNIQUE ECOSYSTEMS * WITH REMAINING ENVIRONMENTAL UNCERTAINTIES * THREATENING TRIBAL SOCIETIES MME- COMPANIES OF THE * PARTICIPATE IN THE PROCESS OF SECTOR DEFINmOK.OF THE LAW FOR CONSERVATION OF HISTORIC PATRIMONY. SECTOR ENIRONMENTAL ASSESSMENT ENVIRONMENTAL ACTION PLAN STRATEGY 3: IMPROVEMENT OF SECTORIAL POLICIES AND PROCEDURES PROBLEM ACTIONS IN CHARGE DEFICIENCIES IN * DEVELOP A UNIFIED FRONT OF CASEC-COMPANIES OF THe ENVIRONMENTAL POLICIES THE SECTOR ENVIRONMENTAL POLICIES AND * DEFINE POUCIES AND CRITERlA RELATED CASEC-COMPANIES OF PROCEDURES IN WITh: THE SECTOR THE COMPANIES OF - COMMUNIlY INFORMATION AND THE SECTOR PARTICIPATION - PREVENTIVE ENVIRONMENTAL MANAGEMENT * ANALYZE POSSIBLE EFFECTS DUE TO CASECISA ELECTR0-MAGNETIC INDUCTION OF TRANSMISSION UNES * DEFINE AND ADOPT PROCEDURES AND CASEC-COMPANIES OF STANDARDS FOR IMPACT REDUCTION THE SECTOR MEASURES * STANDARDIZE TERMS OF REFERENCE FOR: MIN. ENVIRONMENT-CASEC - HYDROELECTRIC PLANTS - COAL THERMAL PLANTS - GAS THERMAL PLANTS - TRANSMISSION LINES AND SUBSTATIONS * ESTABUSH POLICIES FOR REDUCING AND CASEC - COMPANIES OF COMPENSATING IMPACTS TO OWNERS AND THE SECTOR ACTMTIES OF ECONOMIC SUSTENANCE * DEFINE ENVIRONMENTAL STANDARDS FOR COMPANIES OF THE CONTRACTORS SECTOR * DEFINE SECTORIAL STRATEGIES IN ORDER MIN ENVIRONMENT - MME TO CONTRIBUTE TO GLOBAL CONTROL COMPANIES OF THE * STANDARDIZE ENVIRONMENTAL FOLLOW- SECTOR UP PROJECTS * PRODUCE INDICATORS OF COMPANIES OF THE ENVIRONMENTAL MANAGEMENT S ENVIRONMENTAL ACTION PLAN STRATEGY 4: IMPROVEMENT OF SECTORIAL ENVIRONMENTAL PLANNING DEFICIENCIES IN * ENVIRONMENTAL OPTIMIZATION OF THE UPME-CASEC ENVIRONMENTAL GLOBAL STRATEGIES FOR THE USE Ov THE PLANNING AND ITS COUNTRY'S HYDROELECTRIC RESOURCES: IMPLEMENTATION TO THE GENERAL - REVIEW THE AMOUNT OF UPMIE-CASEC PLANNING OF THE HYDROELECTRIC POTENTIAL BASED ON COMPANIES OF THE THE COUNTRY'S ENVIRONMENTAL SECTOR PERSPECTIVE - CONSIDER THE MULTIPLE USES OF UPME-CASEC RESOURCES AND THE ACCUMULATIVE EFFECTS OF THEIR EXPLOITATION IMPROVE THE IMPLEMENTATION OF THE UPME-CEC ENVIRONMENTAL PROGRAM IN GENERAL SECTORIAL PLANNING: - REVIEW THE CURRENT METHODS OF UPE-CASEC ENVIRONMENTAL COMPARISON OF PROJECTS AND ALTERNATIVES FOR EXPANSION - INCLUDE THE ENVIRONMENTAL FACTOR UPME-CASEC IN THE DECISIONS ON THE TECHNOLOGICAL COMPOSMON OF HYDROELECTRIC, GAS- ENERGY AND COAL-ENERGY EXPANSION AMONG OTHERS SECTOR ENVIRONMENTAL A$SE8SMENT ENVIRONMENTAL ACTION PLAN STRATEGY 4: IMPROVEMENT OF SECTORIAL ENVIRONMENTAL PLANNING PROBLEM ACTIONS IN CHARGE DEFICIENCIES IN - DEFINE ENVIRONMENTAL iNDICATORS UPME-MIN. ENVIRONMENT ENVIRONMENTAL THAT CLEARLY REPRESENT THE PLANNING AND ITS MAGNITUDE OF THE RESOURCES AND IMPLEMENTATION RISKS OF ENVIRONMENTAL MANAGEMENT TO THE GENERAL PLANNING OF THE - ESTABLISH THE PROJECTS FOR UPME - CAEC COMPANIES OF THE EXPANSION THAT SHOULD BE DISCARDED SECTOR - INCORPORATE THE ENVIRONMENTAL UPME-CASEC FACTOR TO THE DEFINMON OF PRIORMES FOR PROJECT STUDIES * IMPROVE THE QUALr OF STUDIES: COMPANIES OF THE CES - ASSURE THE PARTICIPATION OF COMPANIES OF THE INSTITUTIONS AND HIGHLY QUALUFIED SECTOR PERSONS IN THE PERFORMANCE OF ENVIRONMENTAL STUDIES - INCLUDE ECOSYSTEMATIC ANALYSIS IN A COMPANIES OF THE HOLISTIC PERSPECTIVE SECTOR - CONTINUE THE TECHNIFICATION OF THE ISA STUDIES FOR TRANSMISSION LINE TOWER-SmNG AND ROUTE SELECTION - IMPROVE THE ANALYSIS AND THE COMPANIES OF THE MECHANISMS FOR CONTROWNG LOCAL SECTOR INCREASES IN THE COST OF LIVING * INCLUDE NEW SUBJECTS ON THE STUDIES COMPANIES OF THE SECTOR - CASEC - WHEN DEALING WITH THERMAL PLNTS, COMPANIES OF THE INCLUDE ALL THE RELATED ACTIVIES. SECTOR LIKE MINNING AND TRANSPORTATION. - INCLUDE ESTIMATION OF THE HUMAN COMPANIES OF THE MIGRATIONS CAUSED BY THE PROJECTS SECTOR - DEVELOP AND APPLY METHODS FOR COMPANIES OF THE INTERNAL0NG THE COSTS DERIVED SECTOR - MIN FROM THE ENVIRONMENTAL IMPACTS. ENVIRONMENT - INCLUDE RISK CONSIDERATIONS AND COMPANIES OF THE DEVELOP CONTINGENCY PLANS FOR THE SECTOR PROJECTS. SECTOR ENVIRONMENTAL ASSESSMENT4 ENVIRONMENTAI. ACTION PLAN STRATEGY 5: IMPROVEMENT OF SECTORIAL ENVIRONMENTAL MANAGEMENT PROBLEM ACTIONS IN CHARGE DEFICIENCIES IN * ADAPT THE DEVELOPMENT OF THE COMPANIES OF THE THE DIFFERENT PROCESS OF PLANNING SECTOR ENVIRONMENTAL TAKING INTO ACCOUNT MECHANISMS MANAGEMENT OF FOR CITIZEN PARTICIPATION THE SECTOR'S COMPANIES * PERFORM EX-POST ENVIRONMENTAL COMPANIES OF THE EVALUATIONS OF THE SECTORS SECTOR GENERATING AND TRANMISSION LINE PROJECTS UP-DATE MANAGEMENT DIAGNOSTICS IN COMPANIES OF THE ORDER TO DEFINE ENVIRONMENTAL SECTOR MANAGEMENT PLANS FOR EACH OF THE PROJECTS IN SERVICE * DEFINE CONTROL AND MONITORING COMPANIES OF THE PROGRAMS OF THE ENVIRONMENTAL SECTOR SITUATION FOR ALL OF THE PROJECTS * SUPPORT AND PROMOTE STRATEGIES MME - COMPANIES OF THE FOR ENERGY-SAVING SECTOR * PROMOTE PROGRAMS FOR RURAL UPME ELECTRICITY BASED ON ALTERNATIVE ENERGY SOURCES SECTOR ENVIRONMENTAL ASSESSMENT 46 ENVIRONMENTAL ACTION PLAN STRATEGY 6: ACTIONS IN PROJECTS OF THE EXPANSION PLAN PROBLEM ACTIONS IN CHARGE REQUIREMENTS * URRA I URRA S.A FOR RESOLVING INVOLVE IN THE DEVELOPMENT PLAN THE FOR THE URRA PROJECT, THE ENVIRONMENTAL NECESSARY ACTIONS FOR FULFILLING UNCERTAJNTIES OF THE MULTIPURPOSE OBJECTIVE IN THE PROJECTS THE PROJECTS EXECUTION PROGRAM COMPLETE FURTHER STUDIES ON THE POSSIBLE HYDROBIOLOGICAL EFFECTS IN THE SINU RIVER AND DESIGN AND EXECUTE CONVENIENT MEASURES FOR CONTROWNG, REDUCING AND COMPENSATING THEM ARRIEROS DEL MICAY CVC - ISA- MME PERFORM COMPLEMENTARY STUDIES REGARDING THE ARRIEROB DEL MICAY PROJECT, CONDMONS THE INITIATION OF THE DESIGNING PHASE TO THE CLARIFICATION OF THE UNCERTAIN ENVIRONMENTAL FACTORS AND THE OBTENION OF APPROVAL FROM THE ENVIRONMENTALAUTHORITY. COMPANIES OF THE * ANOTHER PROJECTS IN THE CATALOG SECTOR CONTINUE THE PROGRAM OF COMPLEMENTARY STUDIES DEFINED IN CHAPTER 9 _