Chile on track to meet renewables target years ahead of schedule

Chile is on track to reach its 20% renewables target several years early, with its rapid renewables build-out and high capacity factors quickly replacing thermal generation.

In September, Chile’s non-large hydro renewable energy generation – led by wind and solar – reached 19% of total generation, power regulator CNE said it its latest report. In October, renewables accounted for just over 20%, said the country’s renewables association, ACERA.

“At this pace Chile, will reach the 20% target before 2025, since the target is for the full year,” Carlos Finat, ACERA’s executive president tells Recharge.

In the first nine months of 2017, renewables supply added up to 8.5TWh, which accounts for around 15% of total power generation, three times the interim target for 2017.

Up until now, only Uruguay was set to reach its renewables target early among South American countries, following its successful auctioning scheme and support from the state-controlled power company UTE.

Wind now tops 20% of all power supply in Uruguay and renewables are over 90%, forcing it to export wind power to neighbouring Argentina. In the region, Argentina and Mexico also have renewable energy targets of 20% by 2025 and 35% by 2024 respectively.

These last two countries, which started tendering renewables in 2016, have attracted strong investor interest so far and could also follow the same path.

The Chilean target was set in the country’s renewable 2013 energy law in order to cut the country’s strong dependence on fossil fuels, which accounted for around 60% of the country’s power supply. And help reduce runaway power prices. This set in motion the country’s tender process in 2013, which contracted a huge pipeline of solar and wind in the past few years.

The declining prices reflect the competitiveness of renewables in tenders, in which renewables accounted for the majority of new capacity contracted. This trend has been especially in the last three years, following changes to the tendering process that raised PPAs to 20 years from 15 years and introduced hourly and three-monthly contracts.

For Finat, this means that 100% renewable energy supply, including large hydros that today account for 23% of total supply, is feasible by 2050. Last year Chile’s outgoing president Michelle Bachelet set a target of 70% renewable energy supply by 2050.

“ The competitiveness of renewables and the development of energy storage seem to point that this is not only feasible, but achievable. Also, we have to take into account that by 2050, many of operating thermal power plants will have reached their operational lifespan,” he says.

The build-out of wind and solar cemented the growth in renewables supply. In 2014, Chile had under 300MW of solar capacity in operation and at the end of September 2017 it has 1.7GW, with another 572MW under constructions, contracted in recent tenders.

Wind followed a similar path rising from under 700MW to over 1.3GW, with another 400MW under construction.

Today wind and solar account for 17.5% of a total installed capacity of 23GW.

Another 600MW of wind, solar and small hydro have contracted in this year’s tender to come online by January 2024.

With these figures, no wonder the two winners in last Sunday’s presidential election round – Sebastián Piñera of the centre-right Chile Vamos coalition and Alejandro Guillier of the center-left Nueva Mayoria coalition – have pledged to continue current renewables policies.

Beatriz Sánchez, of the left-wing Frente Amplio – with whom the two winning candidates will negotiate support – also pledged to continue supporting renewables.

Sánchez even said that the country will invest to ensure the construction of all solar power already approved by environmental authorities. In fact, according to official government figures, a total of 15GW of solar and 9GW are already approved by environmental authorities, and the pipeline for approval is several time bigger.

She is the only candidate to write some kind of targets for renewables in her programme.

Piñera and Guillie

r will now restart campaign to see who will win presidency in the second election round on 17 December.“There is consensus among all candidates about renewables,” says Finat.


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