Total costs of the pilot are $234,800, of which the distribution network accounts for $86,600, says Javier Castillo of the energy ministry's national energy commission (CNE). Financing is from three sources -- Chile's fund for regional development, the US government's Department of Energy (DOE), and local distributor Saesa, which will operate the system. The US National Renewable Energy Laboratory (NREL) is also involved. The Chilean government made a one-off grant of $133,500 to cover project costs for 20 years.
NREL subcontracted the US National Rural Electrification Co-operative Association to pull together aid in kind and to provide machinery and know-how, says regional representative David Kittelson.
If the pilot is successful, construction of a larger project to serve 3500 households on 32 islands will go ahead, Castillo says, with 2002 as a tentative start date. This project will mirror the pilot in all aspects, apart from on one island where the population of 450 is relatively large. Here plans are for two separate systems and no battery back-up. The cost per house would be lower than in the pilot because of greater economies of scale, Castillo claims.
The CNE is investigating financing for the second project and could secure 15-20% from the public works ministry, as well as funds from the FNDR and the World Bank's Global Environment Facility (GEF). It submitted a proposal in March for broad GEF financing for removing the barriers to renewables.
Wind in Chiloé blows for all but the two summer months of January and February at an average speed of 6 m/s. As a low voltage project, it will not need an environmental impact stud for distribution, and the only permits needed would be from forestry commission Conaf in the event that tree felling was necessary and from electricity and fuels superintendence (SEC) for diesel fuel storage.