Wind Power Investment Blowing Towards Chile


Renewable Energy

The combination of pro-renewable energy legislation, economic stability and industrial demand are fuelling a vibrant wind power sector in Chile. The Latin American nation has limited indigenous energy resources, with the exception of hydropower. As a result, the country must import the bulk of its energy needs. Up until 2004 Chile met most of its demand for energy by importing natural gas through an agreement signed in 1995 with neighbouring Argentina for them to supply 22 million cubic meters a day. However, subsidised energy prices in Argentina boosted domestic demand there, which consequently saw exports to Chile fall drastically. Currently Argentina is only sending 10% of the agreed quantity of natural gas to its Andean neighbour. Faced with an energy crisis beginning to impact upon economic growth, Chile was forced to scour the globe for energy sources says Eugenio Chinchon, a Chilean business development manager specializing in renewable energy   “Chile provides most of the copper in the world.  As China has been booming and asking for a lot of minerals, the price of copper has gone up.  So they want to produce more but because there is a shortage of energy, they couldn’t produce.  Also because of historical reasons we don’t have natural resources to produce energy in the north, and the only way to produce has been gas.  But we don’t have gas, so we must buy it from other countries.  Our neighbours like Peru and Bolivia have a lot of gas, but because of historical reasons, there is a lot of rivalry and they don’t want to sell us gas.  So Chile has to buy liquid gas from the Far East and it’s very expensive.  So the prices are going very high and the Chilean government wants to have wind energy”.   

The reduction in Argentine exports of natural gas prompted an energy policy rethink in Chile and a firm commitment by its Government to diversify its energy sources. Legislation signed into law by Chilean President Michelle Bachelet last year requires that electric utilities invest in and supply non-conventional energy sources. The law is an attempt by the energy poor country to diversify supply as it tries to feed booming industry, particularly its copper mining sector. The law mandates that NCES account for at least 10% of the energy supplied by Chile’s electric utilities by 2024. Upon signing the law Bachelet said “the main idea is to establish conditions to attract investment to projects for non-renewable energy by accelerating the development of the market, eliminating entry barriers making those new sources compatible with the country’s electricity market”.  Historically, up to 75% of Chile’s domestic energy production came from hydroelectric proj.....




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