International Energy Agency’s Report on Chile
Chile’s energy policy and outlook have both evolved dramatically in the last few years, according to an International Energy Agency (IEA) report released on 23 January 2018. With the National Energy Policy 2050 being adopted in 2015, and the electricity sector, in particular, undergoing rapid development, the country has quickly become a world-class destination for investment in solar and wind technologies and development.
At around 4,300 kilometres long and on average 177 km wide, the unique and extraordinary geography of continental Chile holds a number of very specific challenges for the country’s energy infrastructure. However, its natural resources and geography remain its greatest assets. The Atacama desert in the far north of the country provides a spectacular solar resource, with more than 9 kilowatt hours per square metre per day—the highest rate in the world. On the other end of the country in the extreme south, Chile enjoys the best onshore wind resources in the world (together with Argentina). Finally, the world’s longest national mountain ridge and shoreline (running in parallel), provide a high potential for wind and hydropower, as well as geothermal, and in the future, wave energy. By continuing to develop renewable-energy resources based on its incredible geography, the country will enjoy not only the obvious energy benefits but also the economic and social benefits, with a dramatic increase in GDP expected.
While 40% of Chile’s power already comes from renewable sources, renewable electricity still presents as a greatly untapped potential for additional electricity. The country’s electricity needs are set to continue growing at a quick rate, having already tripled over the past 20 years. The government has already linked the increased demand with renewable energy sources, and has set a target for a 60% share of renewable power by 2035 and then 70% by 2050.
The government’s targets remain very attainable, given the costs of wind and solar technologies have already fallen greatly and continue to decline, while the energy potential for wind and solar remains high. Government policies are also greatly assisting the push for the exploitation of the country’s solar and wind energy resources, with policies such as technology-neutral tenders for electricity supply, and legislation that encourages investment in generating capacity across the electricity sector.
An important part of the push for solar and wind power is ensuring that these technologies are adequately integrated into the electricity infrastructure. This will require additional investments in grids, storage, and flexible capacity, as well as a smart-system design. To safeguard its country’s long-term energy security, the government should ensure now that the overall layout of the electricity market, along with the country’s energy-infrastructure are able to facilitate the ongoing integration of solar and wind power. This will have a tangible impact by reducing electricity prices as well as lowering dependency on imported fuel.
The key recommendations of the IEA report urge the Chilean government to detail in full its plans for immediate action to attaining the medium-term goals of the National Energy Policy 2050. Twofold with this is to consider increasing the strategy’s ambition on sustainability and energy security. The government needs to continue and strengthen the proactive role it has adopted, with greater planning and consultation for its energy policies and investment plans, as well as greater internal government co-ordination. Finally, greenhouse gas emissions from energy sources need to be limited, with the significant potential for energy efficiency and renewable energy to play a major part in achieving this recommendation.
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