With a burgeoning market for hydropower development, tunnelling work is seeing an uptick in South America’s third largest country. Nicole Robinson looks at two recent projects.The World Bank released a report in 2010 to help the Peruvian government in assessing the potential role of hydropower in the energy sector and the measures that could be taken to encourage its continued development as appropriate. Hydropower has been the major source of electricity in Peru, traditionally supplying more than 80% of requirements, and serving as a source of independent generation for major mines and industries.However, as the report explains, in the early 1990s efforts turned to natural gas and the government began providing incentives for its use in power generation: "This resulted in a virtual moratorium on hydropower development as a result of the very low price of natural gas (below economic cost)."Over the next decade, with the development of export markets for gas and increased attention to the impacts of climate change, the Government returned its attention to hydropower. The Peruvian government completed its National Energy Plan 2014-2025, which calls for electricity to comprise 60% renewable sources by 2025, with 54% coming from hydropower.The International Hydropower Association called Peru a regional leader in small hydropower projects. In its 2015 Hydropower Status report it estimates Peru has hydropower potential of at least 70GW, "of which only 3.8GW have been tapped so far."In 2014 Peru added 199MW, ranking it among the top 20 countries installing capacity at number 17 —Canada comes in at number three and the US at number 16.The market potential for hydro construction in Peru has captivated the likes of Odebrecht, whose subsidiary Empresa de Generación Huallaga (EGH) is developing the 462MW Chaglla power plant, which will be country's third biggest hydropower project upon opening, scheduled for this year.Norwegian company Statkraft opened its ninth hydropower plant in Peru, the Cheves Hydropower Project, this autumn. "The opening of Cheves consolidates Statkraft's position among the largest power producers in Peru," says Statkraft's executive vice president of International Hydropower, Asbjørn Grundt. "It also underlines our ambition to further strengthen our position as a leading international provider of pure energy. Our efforts in South-America play a very important role in this strategy,"Chaglla’s bypassLocated between the districts of Chaglla and Chinchao, some 420m from Lima, the Chaglla Hydroelectric Power Plant has 406MW of installed capacity. The plant is the result of an investment made by Odebrecht Energia of $1.bn, with support from the Brazilian Development Bank, and the Inter-American Development Bank, among others.The project will also feature a small power house, including a power transformer with an output of 6MW. "Chaglla will be one of the largest hydroelectrical power plants in Peru and it will represent almost 8% of the current consumption of energy of this country," says Erlon Arfelli, manager of Odebrecht Energia in Peru.Construction started in May 2011, with Sandvik supplying six DT820-SC tunnelling jumbos for the excavation at Chaglla. Underground construction includes a spillway composed of three tunnels for a total length of 2,838m, 14.5m x 12.6m-high. The 14.7.km-long intake tunnel is horseshoe-shaped with a 7.6m diameter.One of the most important works in the project is bypassing the Huallaga River, which contractors performed through a trunk tunnel of 12.5m diameter, 1,125m long. Odebrecht says the work concluded nine months prior to the scheduled date. The bypass tunnel, a significant step for the project, allowing the dam to be constructed in the former riverbed.Odebrecht says EGH began filling the reservoir on September 1, 2015, and expects the process to last between 45 and 60 days. The project's lenders appointed Mott MacDonald in 2013 as independent engineer to monitor construction.