Chile soaks up the sun

Good news related to the use of renewable energy, concretely solar power, comes from Latin America. Chile, one of its countries with the smaller amount of population, leads the solar market, having the highest installed solar generating capacity. In numbers, this would correspond to 1,938 MW versus 722 MW for the rest of Latin America. In November 2016, “El Romero Solar” the most powerful solar plant of Latin America was inaugurated in the north of Chile. The facility is able to generate enough clean energy to power 240,000 Chilean homes, avoiding the emission of around 474,000 metric tons of CO2 to the atmosphere in coal-fired power stations.

Is this just a trend or the chilean electricity market is really shifting from the use of fossil fuels to renewable sources of energy? According to Lucas Davis, an Associate Professor at the Haas School of Business, Faculty Director at the Energy Institute at Haas from the University of California at Berkeley, the solar market in Chile has great opportunities for continue growing, due to the following reasons:

1. Electricity Demand Growth: As in most of developing countries, electricity demand in Chile is projected to increase 2.6% annually (EIA: International Energy Outlook, 2016) over the next two decades, as a result of copper mining industry, residential and commercial sectors.

2. Geographical Conditions: Chile has the driest place on the planet, Atacama Desert, which has a high level of solar radiation (275 W/m2) and very clean air, which facilitates the capture of the sun’s energy.

3. Limited reserves of fossil fuels: there are no relevant reserves of natural gas and coal.

4. Free Market: presence of free market economics with transparency principles and lack of government intrusion has helped give private investors the confidence to enter the market aggressively. All electricity generation in Chile is privately owned.

Now that Chile has become the biggest solar market in Latin America, the next challenge is to fulfill the commitment that the government acquired by law in 2013, that 20% of the electricity from the country must come from renewable sources to 2025. If the country follows the trend, It will be possible to reach that goal before.