Assessing the Levelized Cost of Energy in Chile

Chile’s abundant renewable energy resources and energy efficiency could unlock a cleaner and brighter energy future. In 2012, while Chile was in the middle of an important debate about its energy future, NRDC requested that Bloomberg New Energy Finance (BNEF) prepare an analysis of the "levelized cost," or real cost, of energy in Chile. BNEF used Chilean data provided by Valgesta Energía to compare a wide range of power generation technologies. BNEF concluded that non-conventional renewable energy (NCRE) technologies, which were often assumed to be uniformly more expensive, were already an affordable choice. This was especially true for wind, geothermal, mini-hydro, biomass, and biogas. This assessment demonstrated that the country’s traditional energy choices—dirty coal and large hydro—were not necessarily the most secure or affordable options for the future.

These findings show that, in the coming decades, Chile could meet its electricity demand with a variety of NCRE sources and energy efficiency technologies to supplement its existing generation base. This will require stronger renewable energy and energy efficiency policies to remove existing barriers and more effectively promote these sectors.

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