Renewables are on the Rise in Chile

Clean, sustainable energy technologies like wind, solar and geothermal power are on the rise in Chile – and with gusto. Chile’s Renewable Energy Center just released its monthly report on the state of non-conventional renewable energy* projects, and the report shows that far more generating capacity from these sources is in the pipeline than many people projected just a few years ago: 5,177 MW are already approved, and 3,660 MW more in environmental review. It is clear that private companies’ confidence in the sector is strong, even if the government’s interest has recently waned, as displayed when the administration rescinded its own goal to have 20 percent of national energy generation come from renewables by 2020. When you combine these numbers for renewables with the untapped potential for energy efficiency, plus expectations for–another unanticipated major player—liquefied natural gas (LNG), it is evident that there is simply no need for Chile to build new dinosaur conventional power plants like HidroAysén.

The center’s report, which includes renewables data through September 2012, shows that there are:

  • 878 MW already in operation – mostly biomass, mini-hydro and wind, with 1 MW of solar;
  • 264 MW in construction – mini-hydro, wind, biomass and 3.9 MW of solar;
  • 5,177 MW approved but not yet under construction – 4,903 MW are wind and solar; and
  • 3,660 MW in the environmental review process – again, wind and solar compose the vast majority, or 3,463 MW.

That’s a total of up 9,979 MW of renewable energy projects already on-line or in the pipeline.  

These numbers surpass even recent expectations for renewables. Three years ago, a technical study that assessed the “need” for HidroAysén’s proposed 2,750 MW through 2025 looked at the aggregated capacities of planned and expected renewable generation projects in the same time period. The study’s authors projected an installed capacity of 3,041 MW for renewable energy projects in 2025. In April 2011, the same authors published an update of that study using more recent data, and created two separate projections for what Chile’s generation matrix could look like in 2025; in the “Business as Usual” scenario, the installed capacity of renewables was 4,611 MW, and in the “Green” scenario, it was 6,316 MW. Both are impressive, and yet both are significantly less than the 9,979 MW total indicated in the latest report from the Renewable Energy Center.

In addition, nearly all of these non-conventional renewable projects are planned near the two main electricity grids – the SIC and the SING – where Chile’s energy demand is expect to grow the most.

  • The SIC, the central grid, serves over 90 percent of Chile’s population and contains about 74 percent of the national installed capacity. Of the renewables projects that are approved and under review, 4,323 MW are planned in the SIC.
  • The SING, the northern grid, contributes about 26 percent of the national installed capacity, and serves most of the mining industry, whose increasing demand for energy is the source of so much concern. Of the renewables projects that are approved and under review, 4,510 MW are planned in the SING.

The proximity of the new renewables projects to these demand centers is a critical characteristic that makes connection to the transmission network less challenging and less costly than, for example, connecting HidroAysén’s proposed dams in Patagonia to the grid hundreds of kilometers away.

Of course, not all of these plants will be built. Obstacles such as permitting and financing are bound to prevent the construction of some. But if just two-thirds were to become operational, that would still be roughly 6,650 MW of capacity from renewables, or very nearly one-third of the total 20,000 MW that the government says the country will require by 2020. That, by the way, is much more than the “20 percent by 2020” proposal that the government has backed down from.

Another piece of news merits attention: new estimates for growth in LNG in Chile are also higher than ever before. LNG already meets 23 percent of the country’s electricity needs, and due to $4.5 billion in investment in new projects, government and industry representatives say that LNG will supply one third of the country’s electricity by 2020.

Clearly, the worry that Chile will not be able to meet its rising energy demand in the future is not an issue of lack of generation potential. The problem is quite different: the government needs to ensure that the grid can handle the new generation that it needs. Daniel Salazar, Executive Director for the SING’s dispatch center, recently stated that although thousands of megawatts of renewable power is proposed for the SING, the grid can at present only handle an additional 750 MW of power from wind and solar combined. It would be very unfortunate if the only reason that solar, wind, geothermal and other renewable projects did not become a reality was the inability of the national infrastructure to handle their contributions. But the solution is not to back track from renewable energy goals. The government was wrong to rescind its 20 percent by 2020 renewables target – which the recent monthly report indicates is quite feasible. Rather than walking away from this goal, the government’s focus and priority should be on upgrading, reinforcing and modernizing the grids so that this impressive array of clean, sustainable energy is able to contribute to Chile’s future.

 *In Chile the phrase “non-conventional renewable energy” is used to exclude large hydroelectric power from the category. Large hydro falls in the “conventional energy” category, along with fossil fuel-powered generation. I use “renewables,” “renewable energy,” and “non-conventional renewable energy” interchangeably here for brevity’s sake, but always with the intent of excluding large hydro.

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