Chile presents attractive opportunities for the energy sector in general. These opportunities are expected to be as attractive in the Non-Conventional Renewable Energy (NCRE) field. This is due to the gap that the power generation industry will have to overcome in order to comply with the goals imposed by the “law of clean energies generation” (Law 20.257). This law establishes that by year 2014, 5% of the power generation output has to come from NCRE. By 2024, the NCRE contribution must be 10%. Currently, less than 3% of the energy comes from renewable energy sources.
Specific opportunities in solar generation are well underway. This is so regardless of the absence of direct subsidies by the Chilean government. Solar plants require a high initial investment and their average price of energy is in the upper end (average price between US$212-297 kWh; please refer to Table N° 9). However, this scenario is starting to change. Solar energy systems are becoming more competitive compared to other renewable technologies.
Chile’s objective is to achieve a sustainable growth of 6% in the long term, which has to be linked to an expanding demand for energy. Graph Nº1 shows that the country’s development and growth have allowed the demand for energy to increase 100% every 10 years. As per this data and the Ministry of Energy’s forecast, in order to sustain a 6% growth, by 2020 the country’s installed capacity will have to increase by 8,000 MW.
In recent years, this 6% growth has been relying mostly on the importation of fossil fuels. Chile produces less than 10% of its total consumption.
The local installed capacity is 16,972 MW. Thermal power stations represent 64.56%, hydroelectric plants 34.38% and renewable energies 1.05%. The current cost of energy for residential users is US$ 0.22 per kWh. Average price paid by distribution companies to the generators for long term contracts is US$ 99.50 per MWh.
Projects under Construction
There are currently 3,000 MW in projects under construction according to the CNE. Of these, 68.68% are thermal power stations, 95% of which are coal based. Furthermore, it is important to keep in mind that NCRE represents less than 4% in projects under construction. These were approved for construction between 1996 and 2010.
Current Situation: Approved Projects and projects in Evaluation
The current situation of projects in evaluation indicates that 39.17% of them are conventional renewable energy (CRE) projects; 37.46% are NCRE projects and 23.38% are thermal power. The majority of the NCRE projects in evaluation are solar projects, totaling 901 MW.
With regards to approved projects which are yet to be built, 56.75% correspond to thermal power; 27.3% are hydroelectric (>20 MW) and 15.95% are NCRE.
Chile is among the countries with the highest levels of radiation worldwide. These levels are particularly high in the north, between Region I and Region IV (Region I: 4,554 kcal/m2/day, Region II: 4,828 kcal/m2/day, Region III: 4,346 kcal/m2 day, Region IV: 4,258 kcal/m2/day).
Market Potential by 2025
The gross power of NCREs in Chile is estimated to be somewhere between 130,000 and 190,000 MW. The following table shows the estimated gross power for 2025. For thermal solar energy, it is estimated to be around 40,000 MW, while photovoltaic energy is estimated at 1,000 MW.
Imports by Country of Origin
In 2011, China has been the main provider of equipment, representing 48.91% of imports, accounting for US$ 6,131,003. The second largest exporter to Chile was the United States, with 15.14%, totaling US$1,897,299. Germany ranked third, with 8.06% and US$ 1,010,739 worth of exports to Chile.