Saudi Arabia’s Electricity Market and Opportunities

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Chile’s Renewable Energy and Energy Efficiency Market: Opportunities for U.S. Exporters Interconnection and Grid Transmission In addition to financing, connecting renewable energy projects to one of the Chilean electricity grids remains difficult. Today, the completion of electricity transmission projects faces serious difficulties that affect the strength of the entire Chilean energy system.40 Projects that otherwise enjoy financial support are often delayed for environmental or political reasons. Like in the United States, many worthwhile projects struggle to find community acceptance. To address these concerns, the Chilean Government announced that it will create a new plan to accelerate investment in the country’s electricity grid, hoping that this investment will facilitate additional renewable energy development. Importantly, this announcement demonstrates that the Chilean Government will likely play a key role in planning the country’s electricity transmission system, developing electricity transmission networks, and creating new “utility corridors,” which should make connecting renewables to the grid easier and more reliable.41 The utility corridors concept is particularly interesting for renewable energy project developers. If implemented, the Chilean Government could be allowed to build transmission lines to support renewable energy development in an expedited process, removing some of the decision-making authority of local communities. It remains to be seen if this policy becomes a reality; and if so, to what extent will the Government use its power to override so- called “not in my backyard (NIMBY)” concerns or other political challenges. manufactured goods now enter Chile duty free, providing ample opportunities for U.S.-based suppliers.42 Chile is open to foreign entrants. The Chilean Government notes in its National Energy Strategy that the country’s policy framework should “encourage and facilitate the entry of new actors into the system,” including foreign companies.43 The first clean energy auction should be announced in early to mid-2013, creating opportunities for U.S. developers to bid on projects, ultimately creating export opportunities for U.S. firms capable of selling technology or expertise to projects generated through the auction.44 Importantly, Chile is also home to supply chains in each renewable energy technology, but none that can build, supply, and support projects from start to finish.45 As a result, imports are needed and U.S. companies are well positioned to find success in these markets. In general, ITA recommends that U.S. exporters consider potential buyers in three separate categories: 1. Construction companies, which represents the largest potential in terms of import value; 2. Engineering consulting firms, which is a strategic group to target for their involvement in all parts of the energy supply chain. In many instances, these companies define the specifications of new renewable energy power plants, and the procurement processes for the services and products needed to construct projects; 3. End-use clients, which are often the owners of power plants and purchase replacement parts or need equipment to expand existing facilities. Wind The high-cost of energy in Chile should make onshore wind (estimated at $91/MWh) an attractive alternative for large energy consumers who pay relatively high rates for electricity (estimated at $120/MWh).46 Yet the country did not commission a single wind farm in 201247 and has only 42 Marcelo, H. Orellana, U.S. Foreign Commercial Service, “Chile: Solar Energy Industry,” pp. 8 (December 2011) 43 Government of Chile, “National Energy Strategy 2012-2030: Energy for the Future,” pp. 32 (February 2012) 44 Bloomberg New Energy Finance, “H2 2012 Latin America Market Outlook,” pp. 4 (02 December 2012) 45 Bloomberg New Energy Finance, “Climate Scope 2012: Assessing the Climate for Climate Investing in Latin America and the Caribbean,” pp. 49 46 Bloomberg New Energy Finance, “H2 2012 Latin America market Outlook” pp. 6 (02 December 2012) 47 Ibid,8 Environmental Sustainability Several renewable energy projects have been delayed or eventually left undeveloped as a result of environmental concerns. Projects located in the Chilean Patagonia region have faced considerable backlash from local and international advocates seeking to protect this treasured local environment. Opportunities by Sector Chile is one of the most open economies in the Western Hemisphere. It has signed trade agreements with over 50 countries, including the United States. As a result of the Free Trade Agreement with the United States, all U.S. 40 Government of Chile, “National Energy Strategy 2012-2030: Energy for the Future,” pp. 28 (February 2012) 41 Ibid,29 Manufacturing and Services — Market Intelligence 8

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