Chile’s energy revolution

In 2015, solar energy was priced at $0 in northern Chile on 192 days of that year. This year it is expected to well exceed this figure. In fact, solar power has been quadrupling in Chile since 2013.

The Atacama desert, located in the north of this slim but long country, is one of the best places on Earth to harness the power of sunshine. Located high in the Andes, near the equator, it is one of the sunniest and driest spots on the planet. Conveniently, the region is also enriched with copper mines that use tremendous amount of energy for their operations. However, since the northern grid of energy (a “grid” being a network of electricity) was not connected with the rest of the country (plugged on the central grid), the solar energy demand (and prices) was fluctuating with the mine activities. The government has however announced a 3000 km transmission line connecting the northern grid and central grid will be built by 2017. The central grid, which covers 93% of the population, will soon benefit from the photovoltaic power coming from the north.

For a country which has historically been dependent on fossil fuels (over 80% of its energy needs, 75% of it imported), and paid the highest electricity rates in Latin America, it’s certainly a welcomed change. Only a few years ago, while severe droughts depleted the reservoirs of electric dams, and the country relied mainly on coal and diesel to run the power plants, electricity cost US$130 a megawatt-hour. This past August, the Spanish company Solarpack corporación tecnológica won the auctions for a 120 megawatts project that will sell its energy at US$29.10 a megawatt-hour – roughly half the price of coal and the lowest rate ever offered on the market worldwide. For comparison, a megawatt-hour is worth about $150 in the United States.

Chile has 29 solar farms in operation and 15 more projects to come. It could also benefit from its 6,400 km coastline to generate wind power and 137 volcanoes that could provide geothermal power, making Chile a leader in Latin America for renewable energy. The country plans to produce 70% of its power through renewable sources by 2050 and cut back greenhouse gases by 30% compared to 2007 levels, by 2030.

With the prices of solar and wind energy decreasing with the lower costs of infrastructures, Chile is a shining example of how these technologies could now be affordable for many other developing nations, helping them bypassing the CO2 emissions that usually come with industrialisation.

Dezem, V and Quiroga J. Chile has so much solar energy it’s giving it for free, Bloomberg, 1 June 2016
Dezem, V. Solar sold in Chile at lowest ever, half price of coal, Bloomberg, 19 August 2016.
Dezem, V. Chile sets clean energy target of 70% of generation by 2050, Bloomberg, 30 September 2015
International energy agency, Chile energy policy review 2009, IEA/OECD, October 2009

Credit photos:
Featured image: Solar panels in Atacama desert, courtesy of Solarpack corporación tecnológica

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