Santiago 2015 Blog: Solving Chile's Electrical Gridlock

Chilean copper mines are big business, both in terms of what they consume and produce. The mines, which churn out the most copper in the world, are expected to double their operational energy demands by 2025. The sector is Chile’s primary energy consumer, taking 39 percent of the national supply and costing companies nearly twice as much as those in neighboring Peru. That demand outs the federal government on the spot to develop its renewable energy sector. So far, the government has leased new technology with China, boosted wind and solar power in the north of the country, and planned to build the first geothermal plant in South America.

In 2014, President Michelle Bachelet launched a four-year energy plan to respond to increasing energy demand and prices. Now the country is in a race against time to keep expanding the sector.

Powering copper production is not the only task the government faces. Connecting electrical grids and reducing consumption and costs also pose formidable challenges. The government is dealing with outages caused by extreme weather and industries frustrated with rising costs and bureaucratic red tape to develop new projects. At the beginning of the year, Energy Minister Máximo Pacheco eliminated Chile’s winter daylight savings time in an effort to make better use of daylight hours and therein reduce electricity use.

Costs are also not evenly distributed throughout Chile. On June 26, the government signed a law to balance the price of energy among the country’s different regions, which were paying based on how populous they were. Pacheco said that new tariffs may increase prices for the regions consuming more than 189 kilowatts a month in metropolitan areas. The Chilean lower house of Congress approved the executive branch’s move to bring Chile’s National Oil Company (known as ENAP) into the electricity sector, though the company will need further government authorization to participate in auctions this September and become an electricity provider.

In June of this year, there were 26 power generation projects under construction within the northern electrical grid, with another 35 projects in construction in the southern grid.

With renewable energy sources increasingly seen as an answer to the country’s power needs, solar power projects are leading the way on next year’s agenda. Renewable sources currently supply 2,278 megawatts, and solar power is making gains on wind. “This means that, in the next few months, we will see solar power surpass wind in terms of installed structures,” says Patricio Goyeneche from the country’s Center of Innovation and Promotion of Sustainable Energy.