Chile seeks to boost renewable energyPublished: March 24, 2009
The government has introduced an array of incentives to bolster the renewable energy sector and announced the creation of the Chilean Renewable Energy Centre.
The Chilean Finance Ministry recently announced a US$ 400 million budget to increase renewable energy development in the country. Long-term loans and loan guarantees will provide support for projects, such as geothermal exploration and construction of electric transmission lines. This fund, managed by the Chilean Economic Development Agency (CORFO), translates into subsidies, tax incentives and further reforms to ensure that, by 2024, renewables will account for 10% of Chilean power generation.
According to Javier García, CORFO's deputy head of Investment and Development, the Chilean government's current energy policies are now in line with the objective of rapidly increasing and diversifying the country's energy supply. "Chile now has adequate legislation that is evolving fast, and that's very different from just four years ago, when the possibilities of building renewable projects were almost nil in this country," he explained.
CORFO made its first call for renewable energy projects in 2005. Since then, Chile's private sector has developed more than 120 wind, geothermal, biomass and low impact hydroelectric projects. Most of the projects relate to wind and hydroelectricity, and all of them have received governmental support.
The country's commitment to renewable power was also demonstrated in Bonn, at the beginning of the year. Chile was among the 75 founding nations of the International Renewable Energy Agency, IRENA, which was created to close the global gap between the enormous potential of renewables and their current relatively low market share in energy consumption.
At the inauguration ceremony, the Chilean Energy Minister, Marcelo Tokman, confirmed his strong belief in the benefits of renewable power: "It will be very valuable to our country, since it will facilitate new technology transfer to countries that, like Chile, have enormous wealth in terms of natural energy resources." He added: "from the very beginning, Chile has supported the creation of IRENA because we are certain it will complement our own efforts." Further to this, the minister announced the creation of the Chilean Renewable Energy Centre during 2009.
International organizations are also developing renewable energy projects in Chile. The World Bank, through its International Finance Corporation, has invested over US$ 290 million in five projects over the past five years. One of its projects for 2009 is the Totoral Wind Farm. Located some 300 kilometres north of Santiago, the project is co-funded by the Norwegian financial services firm DnB NOR. Expected to be completed this year, Totoral is the first renewable project to be financed under the new "non-conventional RE law", passed in March, 2008. With an expected generation of 110 GW hours per year, it will also be one of the largest operating wind farms in Chile.
Enersis will also invest in renewable power in our country. Through Endesa Chile - the nation's leading electricity producer - the multinational will invest US$ 24 million to build a small hydroelectric plant in the Province of Chiloé, 1,100 kilometres south of Santiago. The Piruquina Plant environmental plan has already been submitted, and is expected to have an installed capacity of 7.6 MW.
Sources:
www.ecoamericas.com;
www.mercurio.cl ;
www.irena.org; Prochile's Investment Review