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Since 1 January 2011, GIZ has brought together under one roof the long-standing expertise of DED, GTZ and Inwent. For further information, go to www.giz.de/.
Since 1 January 2011, GIZ has brought together under one roof the long-standing expertise of DED, GTZ and Inwent. For further information, go to www.giz.de/.
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Renewable energy in ChileProject description
Title: Renewable energy in Chile
Context
Sixty percent of electricity generation in Chile is based on imported fossil fuels (mostly natural gas and coal) and 40 percent on domestic hydropower. In the next 10 years, an annual increase of 6-8 percent in electricity consumption is expected. This corresponds to an annual growth in power plant capacity on the order of 450 MW. Besides its capacity to greatly expand the use of water power, Chile also has non-conventional renewable energy (RE) resources with considerable potential, although at present they contribute less than one percent of the electricity generated. So far, the private sector has invested in this area only in a few isolated instances, especially since unresolved technical and legal issues have made supplying power to the electric grid difficult. In the liberalised electricity market, renewables must also compete economically with conventional energy sources. Restrictions on natural gas deliveries from Argentina in 2004, in conjunction with rising energy prices and steadily increasing energy needs, are prompting many and varied discussions today among policymakers and the public at large as to the security of the energy supply and the sustainability of the energy sector. ObjectiveThe project helps non-conventional renewables to gain a more significant role in maintaining a sustainable electricity supply in Chile. Political acceptance and the investment climate for supplying the grid with electricity generated from renewable sources have been improved. This contributes to achieving the energy policy objectives of the government in respect to increased diversification, a more secure supply, and greater sustainability in the energy sector. ApproachThe project provides the Comisión Nacional de Energia (CNE), the body responsible for regulating, preparing and implementing energy policy, with advisory services on creating favourable conditions for electricity generation from non-conventional renewable energy sources. This includes regulation of grid access, integration into the electricity market, and development of expansion strategies and promotional instruments for renewable energies. A second priority area is the removal of structural market constraints hindering the rapid expansion of renewables in Chile. These include, besides lack of knowledge about energy resources and their geographical distribution, lack of experience with planning and approval procedures and with grid connection. Lack of experience with technical and economic evaluation and financing of projects together with innovation risks hinder investments in new technologies. The project supports investigation of the technical and economic energy potential in the wind energy, biomass and biogas sectors. To facilitate planning and approval procedures, guidelines for project planning and environmental impact studies are prepared for the respective renewable energy technologies. In cooperation with private investors and project developers, the project is also conducting feasibility studies for four electricity generation projects on the basis of wind energy, biomass and biogas. This approach permits detailed analysis of existing investment constraints, from which future needs for action and promotional strategies can be derived. Results achieved so farThe new Chilean Government plans to raise the proportion of non-conventional renewable energy to 15 percent of installed power plant capacity by 2010. Regulations governing renewables were prepared with project support and became effective at the beginning of 2006. They regulate grid access for power plants of up to 20 MW capacity and their integration into the energy market, thus creating new incentives for investment. The technical standards for grid connection have also been drawn up. The new regulations improve the economic and legal conditions for RE projects and facilitate entry into the market for new actors and investors. A more enabling environment in conjunction with new promotion instruments developed by CNE jointly with the economic development institute CORFO have given rise to a marked increase in interest among private investors and project developers. At present, more than 40 projects with a total capacity of about 200 MW are receiving support (mini hydropower plants, wind energy plants, biomass/biogas plants, geothermic projects). These were selected on the basis of competitive tendering for assistance funds designated for preliminary studies. The procedure will be repeated owing to the considerable success of the first competition. Information and training activities offered by the project have further encouraged the market to invest in RE. Training measures have brought the level of services offered by local providers – in wind measurement for example – up to international standards. Reliable methods of measurement and results reduce the investment risks for investors and banks when financing planned wind energy projects. An improved database, for instance on the energy recoverable from renewables, is not only useful for investors but provides sound arguments for increasing the political acceptance of renewable energies. Downloads
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