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Chile

Chile

Chile law better than reported

The author writes: Your article on the recent enactment of a law for renewable energies in Chile ( "New renewables law falls short," Windpower Monthly, May 2008) regrettably contained erroneous information, which could lead readers to a misinterpretation of the scope of the law and the opportunities for the development of renewable energies in Chile. From Marcelo Torman Ramos, Minister-President, National Energy Commission, Government of Chile Power generation in Chile.

Your article on the recent enactment of a law for renewable energies in Chile ("New renewables law falls short," Windpower Monthly, May 2008) regrettably contained erroneous information, which could lead readers to a misinterpretation of the scope of the law and the opportunities for the development of renewable energies in Chile.

Power generation in Chile includes broad participation of renewable energies. In 2007, 41% of our nation's electricity was produced by this type of energy. The principal source of renewable energies was hydropower of all scales. The 2.4% participation indicated in the article corresponds to the installed capacity of "Non-Conventional Renewable Energies" (Energias Renovables No Convencionales, ERNC) at the end of 2006, that is, excluding hydropower larger than 20 MW.

Conscious of the great potential for ERNC in the country, and consistent with the goals of security of supply, efficiency and environmental sustainability that guide our energy policy, the government of Chile has been perfecting the electric legislation since 2004. This policy ensures that ERNC can be developed while maintaining the principles of non-discrimination, efficiency and competition that have governed the electricity market since its reform at the beginning of the 1980s. The enactment of the law for the development of ERNC on April 1, 2008, is a very significant step in this direction, even more so because its final legislative process was approved unanimously by parliament.

The law is based on a renewables portfolio standard, setting a minimum level for the proportion of renewables in electricity supply portfolios, that has been designed in accordance with the characteristics of the Chilean electricity market. It establishes an obligation on the commercialising companies that a percentage of the energy sold to final customers be produced by ERNC. This percentage is 5% between 2010 and 2014 and increases by 0.5% annually as of 2015 until reaching 10% in 2024.

The requirement applies to the sale of energy and not to the new generation capacity, as indicated in the article. Furthermore, only ERNC projects installed after January 1, 2007 can be used to meet this obligation, thus requiring 200 MW to fulfil the law in 2010. According to our estimation, this figure will increase to approximately 1500 MW by 2020, well above the 25 MW annually mentioned in the article. This constitutes a great challenge, given the short time before the beginning of the obligation (only two years).

We are already seeing the fruits of the law. To date, 32 ERNC projects have environmental permits for their construction, seven of which correspond to wind plants, and the portfolio of projects in various stages of analysis is greatly above this figure. Although the law does not favour any specific type of ERNC, we are observing that projects of diverse technologies will be installed. It is quite probable that in 2010 the installed capacity of wind power alone will be above 150 MW.

Finally, I would like to take this opportunity to invite your magazine to know more about the opportunities that the law opened for a diverse group of national and international promoters of ERNC projects, as well as other efforts that we are making as a country to diversify our sources of supply.

Staff at the National Energy Commission, both before publication of the article in question and since receipt of this letter, have been unavailable to respond to a number of inquiries by Windpower Monthly's journalist, who points out that the apparent misunderstanding of the law came from people he interviewed who are active in the market. We regret misleading readers.

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