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Chile’s Renewable Energy and Energy Efficiency Market: Opportunities for U.S. Exporters Energy Efficiency Program into a separate, stand-alone agency.21 Today the energy sector is managed by the Energy Ministry through CNE, although the Ministry of Economy plays an active and important role as well. It remains to be seen whether the creation of new government ministries and the current legal structure supporting renewable energy development will be enough to reach the 10% target. In fact, with only 843 MW of renewable energy technologies installed and just 260 MW under construction, significant development must occur over the coming decade to meet the 10% target in 2024.22 At the beginning of his administration, President Pinera had announced an ambitious renewable energy target of 20% by 2020, but later abandoned the plan on economic and fiscal grounds. In dropping the plan, however, the government reaffirmed its commitment to achieve a 10% target by 2024 by introducing the National Energy Strategy in 2012, which detailing its plans for transforming Chile’s energy sector over the coming two decades. The strategy explained six fundamental pillars that the Government will use to guide its implementation of the Strategy going forward: 1. Strong commitment to energy efficiency; 2. Large increase in the use of non-conventional renewable energy; 3. Increase the use of large hydropower plants; 4. Strengthen the Chilean transmission and distribution system, making it easier to get electricity produced in one part of the country to consumers in other parts; 5. Address the challenges faced by electric utilities, as they seek to provide electricity directly to consumers; and 6. Promote the development of international interconnections. Incentives and Support In addition to the policy supports established in law and the rhetorical supports offered in the National Energy Strategy, the Chilean Government also announced in 2012 that it will consider the possibility of using tax incentives 21 Presentation by Chilean Embassy in Washington, DC entitled “Energy Policy in Chile” (received in person on 19 December 2012) 22 Bloomberg New Energy Finance, “Climate Scope 2012: Assessing the Climate for Climate Investing in Latin America and the Caribbean,” pp. 47 to reorient the country’s energy mix towards renewable energy and energy efficient technologies. Despite Chile’s history of limited government involvement in the energy sector, President Pinera declared that the country would pass “100 laws” in support of its National Energy Strategy.23 According to the National Energy Strategy, Chile will also use several additional policy mechanisms to encourage the development of non-conventional renewable energy resources: • Tender Mechanism: Open tenders will be carried out in which developers could be awarded a state subsidy to make the price associated with energy production more attractive. According to the Chilean Government, price supports will be defined according to the bids submitted, so developers may be unaware of potential subsidies or incentives when bidding on projects.24 • Geo Reference Platform: To facilitate private sector investment in renewable energy projects, the Government of Chile announced it will create a “geo reference platform” to provide up-to-date information on the viability of renewable energy projects. The information provided by the platform will include a description of existing renewable projects, a database of potential resources, state-owned land available for development, detail of energy demand at an industrial, commercial, and residential level, information on roads and electricity infrastructure, environmental protection areas, and information on land-use and planning. The goal of the project is to provide certainty regarding the feasibility of RE projects and to take greater advantage of public lands for renewable energy development.25 • Chilean Renewable Energy Center: Additionally, Chile has established a Renewable Energy Center (Centro de Energias Renovables, or CER), a new public institution to promote and facilitate renewable energy development in Chile. The CER is supported by the U.S. National Renewable Energy Laboratory (NREL) in Golden, Colorado and the U.S. Department of Energy. CER will provide technical assistance, 23 Conversations with State Department officials -- 08 March 2012 24 Government of Chile, “National Energy Strategy 2012-2030: Energy for the Future,” pp. 21 (February 2012) 25 Ibid,21 Manufacturing and Services — Market Intelligence 5PDF Image | Saudi Arabia’s Electricity Market and Opportunities
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