For decades, the country has been powered by its strong hydrological potential. However, power generation has started moving in a different direction and the government is in the initial phases of a rural electrification project. Also, important international groups have expressed their intention to invest in mega-scale alternative energy projects. These new approaches will likely lead to Chile diversifying its energy matrix and reducing its foreign dependency in a sustainable manner.
Energy is a fundamental part of the efficient economic development of a country. A country’s energy matrix, however, must come from diverse sources in order to be sustainable. In this way, the country reduces its dependency on foreign petroleum, avoids the difficulties of importing hydrocarbons from neighboring countries, and limits the scope of environmental debates surrounding fossil fuels.
Two-thirds of the electric energy required by Chile is generated by its own hydroelectric resources. The country, however, cannot produce an adequate amount of oil, gas, and coal to close this gap. Thus, it is necessary to import energy from abroad. The National Oil Company (Enap) is responsible for logistics, refining, liquid natural gas (LNG) projects, geothermal development, and exploration in the Magallanes region of the country.
Enap has announced that the LNG plant in Quintero in the Valparaiso Region will begin operations in 2009. The project, which required over a billion dollars in investment, will include a delivery terminal, storage, and regasification facilities that will guarantee supply for the central region of the country.
Principal Sources of Energy
In Chile, there are 21 hydroelectric sites currently producing electricity. According to the National Energy Commission (CNE), hydroelectric resources total approximately 24,000 megawatts. Of this total, approximately 4,130 megawatts have already been captured, a volume sufficient to satisfy close to 70% of internal demand.
The excellent geographical conditions and the socioeconomic stability of the country attract large foreign investments, including AES from the US and Endesa from Spain.
In 2009, it is expected that the 20th thermoelectric site will be constructed in Chile by MPX Energy, a Brazilian company. This megaproject represents the most important current investment, totaling 4.4 billion dollars in the Atacama Region.
The country also possesses reserves of 30 million barrels of oil. Enap explores and produces both on and offshore drilling sites in the southern Magallanes Region. In 2007, the national company extracted 148,000 cubic meters.
In the same period, production of natural gas totaled over 2 billion cubic meters with reserves estimated at 45 billion cubic meters.
Renewable Energy and Innovation
Some of the highest levels of solar radiation in the world exist in the northern regions of the country. These levels total around 5,000 kilocalories per square meter. Also, winds in these areas reach speeds of 8 meters per second. These are ideal conditions for the installation of alternative electric generation systems.
Hydroelectric and biomass energy such as timber represented more that 20% of household energy consumption at the beginning of the decade.
The country focuses development efforts on nonconventional renewal energy projects (ERNC). For example, the government’s Rural Electrification Program (PER), which began in 1994, seeks to supply 90% of the population that lives in rural sectors.
Winds of Change
The costal zones of Atacama, Coquimbo, and Maule offer high potential wind projects. Some of these areas offer both costal winds and heat, according to a preliminary report published at the beginning of 2009.
In partnership with the German Agency for Technical Cooperation and the United Nations program for the development and support of the Global Environmental Facility, the National Energy Commission has implemented a campaign to measure the winds at different strategic points in Chile.
In partnership with Spanish investors, the local group Haciendas Talinay will contribute US$1 billion to develop a 500 megawatt wind park that includes 243 turbines.
It is projected that electric plant capable of producing the 1,800 megawatts of energy will be installed throughout the country. The investment for each plant will require an investment of approximately US$2 million.
Biomass, the reuse of waste
Biomass includes inputs ranging from trash to unused products from the timber industry. These inputs are used to produce energy at diverse points throughout the country.
Trash produces biogas, which is extracted and injected into pipes for use by households in Santiago and Valparaiso.
The gasification of forestry biomass in a 40,000 watts plant, which required an investment of US$2 million, has delivered electricity to families on the island of Chiloe since March of 1999.
Solar energy has an enormous potential in the northern part of Chile where daily radiation totals average 5,000 kilocalories per square meter, a level classified as among the highest in the world.
In coordination with the National Energy Commission, the development of solar technology includes applications used by telecommunications companies, the retransmission of television to isolated sectors, nighttime lighting systems, and rural electrification systems.
Between 1992 and 2000, the Rural Electrification Program facilitated the installation of close to 2,500 individual solutions that provide power to rural households, schools, and medical clinics.
A company with a headquarters in South Korea has expressed interest in investing US$1.35 billion in order to develop a solar field with a capacity of 150 megawatts in an area located 30 kilometers from the city of Copiapó. It would begin operations in 2012.
Nonconventional Hydroelectric Generation
Hydro generators and micro hydroelectric resources are options for the Chilean government to develop unconventional renewable energy.
100 installations already exist in the country, which principally supply power for the electrification of houses and telecommunications.
The energy authorities say that this is an effective option for supplying electricity to isolated and remote areas that require energy on a smaller scale.
Since 2000, legislation has supported the promotion of geothermic energy and classified it as a strategic priority for the country. Chile is located in what is known as the Pacific Ring of Fire, which makes it an ideal area to generate this type of energy.
The Mining Ministry has delivered concessions in two areas for exploitation and 19 others for exploration in the country. These steps demonstrate the attractiveness of this type of approach.
Also, in 2008, an international public bidding process began for exploration concessions in the northern Tarapaca Region.
The strategic character of this type of supply has motivated the government to request studies of benefits and risks of building nuclear power plants in Chile. President Michelle Bachelet received a report in 2007 from the commission under the direction of physicist Jorge Zanelli. Before the end of 2009, it is expected that new reports will be released detailing public and private participation, the regulatory framework, public opinion, and impact and risk analysis.
In accordance with the norms outlines by the International Atomic Energy Agency, a plant requires an investment of around US$6 billion over the course of 10 to 12 years.