IEA Highlights Chile’s Potential As Renewable Energy Behemoth
The International Energy Agency has this week published a new report highlighting the emergence of Chile as one of the world’s growing renewable energy destinations, thanks to second-to-none resources and increasingly forward-looking policies.
In its second in-depth review of Chile’s energy policies, the International Energy Agency (IEA) has heaped the praise on the country’s forward momentum, highlighting its emergence as a world-class destination for solar and wind energy developers and the significant institutional and policy reform which has been carried out over the last few years.
Following the long-running reduction of gas supply from Argentina back in 2004 and the 2010 earthquake, Chile’s government has stepped up its policy moves to set itself up as a world-leading clean energy destination. The creation of the Ministry of Energy in 2010, and other recent entities including the Chilean Energy Efficiency Agency and the single National Electricity Co-ordinator (ISO), have helped ferment increased development. The key policy move has been the introduction of Chile’s National Energy Policy 2050 which was adopted in 2015 after an impressively public consultation that sought public input on a range of issues. The resulting policy focuses on four key pillars of energy policy:
- the quality and security of supply
- energy as a driving force for development
- environmentally-friendly energy
- energy efficiency and energy education. It sets targets for both 2035 and 2050.
In regards to the third point, Chile’s increasing growth requires immediate action. Chile’s total generation capacity has already more than tripled over the past 20 years — growing from around 6,500 MW (megawatts) in 2007 to around 23,000 MW at the end of 2017 — and the government’s business-as-usual scenario predicts that electricity demand will more than double by 2050. As a result, not only does Chile need to focus on renewable energy sources, but it also needs to increase investment in grid infrastructure.
That being said, Chile already boasts an impressive renewable energy mix to match impressive renewable energy targets. Chile aims to source 60% of its electricity from renewable energy by 2035, and 70% by 2050 — big targets, but when put in context they’re well within reach, considering Chile already has renewable energy worth 40% of its mix.
And, as the IEA highlights, Chile is well-placed to meet its targets considering the impressive natural resources available to them. To quote from the report:
“Chile’s energy challenges and opportunities are shaped by the country’s extraordinary geography and resource endowment. Continental Chile is 4 300 km long and only 177 km wide on average, which entails unique challenges for the energy infrastructure. However, the Atacama Desert has the world’s best solar resources. Chile also has the world’s longest national mountain ridge and shoreline, running in parallel, which provides a high potential for wind and hydropower, as well as geothermal and, in the future, ocean energy. “
“By exploiting its vast renewable energy potential, Chile can help reduce electricity prices and dependence on fuel imports — without subsidies,” said Paul Simons, the IEA Deputy Executive Director, who presented the report’s findings on Tuesday. “Renewables and energy efficiency can also help limit carbon emissions and air pollution.”
The wealth of resources are matched by a political drive to sustain renewable energy growth that we don’t necessarily see everywhere, especially from national governments. Global technology cost declines are being matched by enabling policies, such as technology-neutral tenders for electricity supply. “These tenders are both driving investment in green, affordable electricity and increasing competition,” explained Simons. “It’s looking like a win-win.” New policies also support increased investment in renewable energy capacity, and the expanded role of the State in energy planning has served to boost project development — especially in electricity transmission.
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