In the past decades, the traditional power generation methods like coal, oil and hydroelectric dams have dominated Chile’s power grid. The renewable energy such as solar and wind energy was deemed less cost-efficient for its advanced technologies and expensive equipment, thus hasn’t been widely used in south American countries. Recent years, the cost of installing solar and wind energy has been decreasing, and the prices hit the extreme low level in nations like Mexico, Chile, India and Abu Dhabi. The downward of the cost is definitely facilitating the emergence of new markets as governments start to encourage companies pursue eco-friendly energy more aggressively for the lower budget. Chile, a country with natural advantage of renewable energy, is gradually rewriting the future of its climate and environment.
The electricity rates have been a serious issue of Chile for years. In last quarter of 2013, the electricity supply tender for Chilean families and companies was reached 128 dollars/MWh, compared to just 32.5 dollars in the last tender of 2017. The increased electricity rates pressured local companies to move their factories and operations to low energy cost countries. Thanks to the new regulatory, which allowed both Chilean and foreign companies to participate in the industry, brought more opportunities of Chilean power generation and more competition in the non-conventional renewable energies (NCRE), mainly photovoltaic, wind and solar, the most efficient resources of Chile.
In 2016, there are 80 companies submitted to the tender to join the Chilean electricity supply and distribution, what’s more, 15 more submitted to the next distribution tender. It’s quite unusual because previously the Chilean energy sector was very concentrated with only a few players.
Listed with Mexico and Brazil in world’s top 10 renewable energy markets, Chile is taking the leading the pack on clean energy transformation in South America, where renewable energy investment has grown at double the global rate over the past decade.
Now, Chile is generating the cheapest energy in the world, and is convinced to become a solar version of Saudi Arabia. As mentioned by Manuel Baquedano, president of the Chilean non-governmental IEP:” Globally, solar and wind energy are much more competitive than even fossil fuels. Today solar energy is being produced at a lower cost than even coal. That has led to the creation of a new scenario.”
The new regulatory not only modified Chile’s monopolistic energy sector to competition, but also greatly accelerate electricity generation: it only took a few months to reach its target set for 2025 that generate 20% of electricity by renewable, mostly by solar and wind power. We’re happy to see Chilean new government attach importance to technology innovation to improve new energy performance. ”The new government would actively support Chile to find necessary mechanisms to meet the goal of 100% renewable energy by 2040.” Said by Acera.
undoubtedly, clean and renewable energy is an inevitable trend for world’s energy form transformation. For more information about Chile energy changes, please visit JumoreGlobal Insights.