Non-Conventional Renewable Energies are Large Share of Chilean Generation Matrix

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Researched by Industrial Info Latin America (Córdoba, Argentina)--More than 90% of the environmental impact assessments (EIA) and environmental impact studies (EIS) submitted in the last 12 months to Chile's Environmental Impact Evaluation Service (SEIA) were related to the construction of new power generation facilities involving non-conventional renewable energies, including windfarms, solar plants, geothermal plants and mini-hydro plants.

Since June 1, 2012, a total of 77 new-build projects have been submitted to the SEIA, with an aggregate estimated investment of $15.46 billion. Of these, 70 projects feature non-conventional renewable technology, with solar projects in the lead (58.5%), followed by wind projects (23%) and mini-hydro projects (18.5%). Non-conventional renewable projects also represent almost 92% of the overall planned investment.

This bias toward renewable energy also holds when considering Chile's plans for new capacity. Currently, there are 19,500 megawatts (MW) of construction projects that are in different stages of planning and engineering, with overall planned investments totaling $42 billion. Of these, 80% of the planned capacity and 84% of the estimated investments are for facilities that are based on renewable sources.

At this general level, hydroelectric projects lead with the 40% of the planned capacity, due to major hydro projects that have been in permitting for several years. Examples include the 2,770-MW, five-plant complex planned by HidroAysen S.A. (Cochrane, Chile), which is to be constructed on the Pascua and Baker rivers, and the 1,069-MW, four-plant complex planned by Energía Austral SpA (Puerto Aysen, Chile), which is to be constructed over the Condor, Blanco and Cuervo rivers.

The new focus on non-conventional renewable projects can be explained mainly by the promulgation in 2010 of the Renewable and Non-Conventional Energy (ERNC) Law. Under the law, all generation companies that have an installed base of 200-MW or more will have a mandatory quota of 10% of energy to be produced using non-conventional renewable technologies. This quota will be reached step-by-step, starting with a 5% quota between 2010 and 2014 and an annual increase of 0.5% from 2015, until the 10% is reached in 2024. This quota can be covered with energy produced by third-parties. Together with this law, the Chilean government created a battery of incentives and stimulus for the research, development and use of non-conventional renewable technologies.

Another stimulus for the development of non-conventional renewable projects is the expected increase in energy demand from the mining industry in the northern areas of Chile. This can be seen in the fact that 66% of the power generation projects submitted to SEIA in the last 12 months will be located in the regions north of the Metropolitan Region, especially in the regions of Arica-Parinacota, Tarapaca, Antofagasta and Atacama. One of these regions is the Chilean part of Atacama Desert, which has one the best photovoltaic conditions in the world and was the site selected for all solar projects proposed in Chile.

The Chilean solar market is expected to see an increase in electricity demand, a stimulus for the use of solar technologies and improved performance. Together with the country's business environment and economic performance, the Chilean solar market has attracted important international capitals, especially from the European market that has found in Chile an alternative to escape from the current crisis of the solar market in that continent. This way, Italian giant Enel SpA (Rome) submitted in the beginning of the year the EIA for the construction of three major solar complexes to be built in phases in Antofagasta, with an aggregate estimated investment of $865 million: Lalackama (129-MW), Sol de Lila (122-MW) and Valle del Sol (143-MW). Another example is the 400-MW thermosolar complex that the Iberdrola (Madrid) plans to build using CSP technology near the Maria Elena Municipality.

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