Saudi Arabia’s Electricity Market and Opportunities

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Chile’s Renewable Energy and Energy Efficiency Market: Opportunities for U.S. Exporters An additional area of opportunity may be the solar industry’s ability to provide off-grid electricity to the mining industry in Northern Chile, which is mainly powered by diesel generators or expensive natural gas. Already, several mining companies have partnered with solar developers to bring projects online even without the use of government subsidies or incentives. In September 2012, for example, Chilean mining company CODELCO announced it would partner with Energia Llaima and Sunmark to develop a 35 MW solar thermal power plant in Sierra Gorda, 120 kilometers southwest of the Chilean city of Calama.64 Geothermal Located on the so-called “ring of fire,” Chile has an astounding 10% of the world’s active volcanoes, providing an abundant potential for geothermal energy.65 To date, no geothermal projects have been completed in Chile – or anywhere else in South America. This despite 16 GW of geothermal potential existing in the country and Chile’s growing need for base load electricity.66 Nevertheless, deep exploration drilling is underway in Chile and several projects are in the pipeline. An April 2012 tender generated $250 million worth of investment for 20 geothermal energy exploration concessions. By law, geothermal drilling concessions come with a two-year expiration date by which time concession owners must have either reached an exploration milestone or receive an extension. While sometimes difficult for drilling companies, these stipulations should help jump-start the market for geothermal development.67 Chile is home to a relatively robust geothermal supply chain, although most Chilean geothermal firms are focused on the early stages of geothermal development, including exploration project development. Large sections of the downstream supply chain remain unfilled, leaving significant business opportunities for U.S. firms capable of providing technology and expertise. With several large projects planned to begin operation from 2016-2020, ITA expects the geothermal supply chain to grow dramatically in the coming years.68 64 Ibid, 11 65 Country Energy Profile: Chile – Clean Energy Information Portal (www.reegle.info/countries/chile-energy-profile/CL 66 Ibid 67 Bloomberg New Energy Finance, “H2 2012 Latin America market Outlook” pp. 15 (02 December 2012) 68 Country Energy Profile: Chile – Clean Energy Information Portal Hydropower Analysts estimate that Chile’s hydropower potential could exceed 9 GW, both in reservoir and run-of-river projects.69 Today, the country produces roughly 5 GW of large-scale hydropower, leaving significant room for growth for an industry that has traditionally been a major energy producer for Chile. In particular, the Southern part of Chile – from the Maule region to the basins separating the Aysens from Magallanes – offers tremendous hydropower potential. These are also areas of extreme environmental sensitivity and several hydropower projects have been stalled or cancelled due to environmental concerns, including the HydroAysen project, which President Pinera approved in May 2011. The project would have facilitated the construction of five damns built on two rivers in the Chilean Patagonia region at a cost of $3.2 billion, and contributed 2,750 MW of new power capacity.70 If completed, the damns would have flooded large tracts of wilderness, threatening several endangered species. One poll found the proposal was so unpopular that 74% of Chilean citizens opposed the HydroAysen project on environmental grounds.71 Given the cost – both financial and environmental – to large scale construction in southern Chile, and the need to transport large amounts of energy from southern power plants to northern consumers, ITA remains skeptical that future large hydropower development will occur in the region. The Chilean government has called for a “special plan” to be developed that would safeguard the Chilean Patagonia from development in areas of “exceptional” environmental value.72 It remains to be seen if such a plan will be developed. Small to medium-sized hydropower companies may find opportunities developing small-scale hydropower projects. U.S. exporters should be well positioned to take advantage of this opportunity, should additional small hydro development take place. (www.reegle.info/countries/chile-energy-profile/CL 69 Government of Chile, “National Energy Strategy 2012-2030: Energy for the Future,” pp. 24 (February 2012) 70 Robin Yapp, Renewable Energy World Magazine, “Chile’s Uncertain Renewable Energy Future,” pp. 1 (9 April 2012) – http://www. renewableenergyworld.com/rea/news/print/article/2012/04/chile-looks-to- renewables-as-its-grid-falters 71 Ibid 72 Government of Chile, “National Energy Strategy 2012-2030: Energy for the Future,” pp. 24 (February 2012) Manufacturing and Services -- Market Intelligence 10

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