Citizens Take the Lead in Chile's National Energy Discussion

Chileans tired of enduring blackouts, seasonal power shortages and high electricity prices have reason for hope in the New Year. A coalition of citizens, academics, technical experts and members of Parliament has issued a landmark proposal in hopes of jump-starting a national conversation to establish a long-term energy policy for Chile that fosters clean, sustainable energy technologies. Whether the Piñera administration will listen, remains to be seen.

After five months analyzing the energy sector, members of the Citizen, Technical and Parliamentary Commission for Energy Policy and the Electric Grid (CCTP) recently presented their report and recommendations to President Sebastian Piñera. The CCTP’s initiative demonstrates the kind of “we cannot afford to wait any longer” attitude that many people from around the world brought to and away from the UN’s recent climate conference in Durban. This is also precisely the kind of forward-thinking, self-propelled initiative that the world needs to see next year at the Rio +20 Earth Summit.

The CCTP first united in May 2011 to complement efforts by the government’s Advisory Commission on Electricity Development, comprised largely of the usual suspects in Chile’s energy sector – many of the very people who had helped create the system that is now so plagued with problems. Chileans endure black-outs, seasonal power shortages and some of the highest electricity prices in the region, while the energy market is monopolized by a few large companies who make a lucrative profit under this current system. Former Minister of Energy Laurence Golborne recognized the underlying fundamental problem (as did the International Energy Agency in its 2009 Energy Policy Review):  Chile has no long-term energy policy.

Setting out to help fill this major policy gap, the CCTP analyzed the current state of the energy sector as well as its future potential growth, and suggested specific legislative and regulatory actions. In doing so, it recognized that Chile cannot continue to rely on the same conventional technologies, weak institutional structures and policies that favor only major corporations.  If Chile is to meet its future energy needs and economic goals without sacrificing the environment or public health, it will have to change course.

Their conclusions and ideas are not radical. In fact, several of their recommendations are merely for the government to follow through on existing legislative proposals, such as President Piñera’s 2010 idea to raise the country’s renewable energy portfolio to 20 percent by 2020, and to pass the pending net-metering law. The CCTP states that the government needs to:

  • reform the General Electricity Services Law to eliminate market distortions and unbalanced pricing procedures.
  • shut down or retrofit old and inefficient coal-fired and hydroelectric plants that are environmentally harmful and that drive up the market price because they are maintained as “back up” power despite being obsolete.
  • categorize firewood as a fuel, which would allow adequate regulation of this major source of harmful pollution – especially for the southern half of the country
  • make thermoelectric plants internalize their environmental costs via a new limit on emissions of heavy metals from these plants; regulations to determine appropriate cooling processes to minimize detrimental impacts on marine life; and a new “eco-tax” based on the plant’s impacts on human health and the environment.

The experts, policy-makers and academics on the CCTP also clearly see that with appropriate policies in place renewables and efficiency can contribute a significant amount to Chile’s future electricity grid. In addition to urging the “20 percent by 2020” law, they recommend legislative amendments to reduce market concentration and eliminate barriers for new market entrants such as renewable energy plants. They propose strengthening the Chilean Energy Efficiency Agency so that it can be more effective, introducing minimum energy performance standards (or MEPS) for light bulbs, heating appliances and refrigerators, and passing a decoupling law that would separate distribution companies’ profits from the amount of energy they sell.

My colleague Doug Sims has looked more thoroughly at the government commission’s report. For the present, however, it is clear that their proposal for Chile’s future energy policy –although it contains some solid analysis—can be briefly summarized as a “business-as-usual” model that contains very few new ideas. Its recommendations focus on developing more hydroelectric power, particularly in northern Patagonia (such as the highly controversial HidroAysén and Rio Cuervo projects) and keeping the nuclear energy option on the table. In contrast to the CCTP’s ideas, the government commission does not foresee renewables contributing much to Chile’s energy future, and all but ignores efficiency, which has been extremely successful in other places in driving down energy consumption and creating jobs.

It is precisely this focus on renewables and energy efficiency, as well as other critical components of Chile’s currently troubled system that demonstrates the CCTP’s foresight and vision for the future of their country.

And, it is precisely this type of foresight and vision that countries around the world need to develop now and bring with them to the Earth Summit in Rio next summer. People around the world who are plagued with energy shortages, public health problems and environmental disasters deserve as much, and should not have to wait any longer for clear and concrete solutions from their governments.