Chile has always been characterized as a country heavily dependent on imported fossil fuels and its growing energy needs have been met through the combustion of coal and diesel.
This heavy dependence on imported fossil fuels has sparked interest in the rapid development of renewable energy technologies, particularly from 2013.
The need to change the trajectory of increasingly high energy prices has led the Chilean government to plan and implement a strategy to attract foreign capital and thus revolutionize the production of electricity in its country.
The most important renewable energy sources in Chile are hydroelectric, solar photovoltaic and wind power. Unlike growth in the EMEA region, Chilean growth has been driven by the unregulated market, made possible by high electricity prices, an open and stable economic and political environment, as well as the dramatic drop in costs L ‘energy.
In 2018, after 5 years of an unprecedented boom in renewable energies, particularly solar and wind power, the country achieved increase the share of renewable energies from 5% to 18%. Utility-scale photovoltaic solar power fell from $ 350 / MWh in 2009 to around $ 90 / MWh in 2013 and $ 50 / MWh in 2017, a decrease of 85%.
In September 2018, the installed solar capacity reaches 2.38 GW of 12 MW in 2013. The largest group of projects was the PMGD category, ie plants up to 9 MW. The total capacity of the 10 largest solar photovoltaic plants in Chile is 1,173 MW, of which the largest is 196 MW (El Romero de Acciona). Chile has announced its targets: 60% by 2035 and 70% by 2050. At the current rate, these targets should be achieved sooner than expected.
Concerning the wind energy marketSince 2013, around 1.3 GW of installed capacity has been incorporated. Wind power, as a more mature technology, has not experienced the same decrease in the cost of electricity compared to solar PV, and its deployment has been relatively slower.
During the same period, from 2009 to 2013, wind power fell from around 170 / MWh to 60 / MWh, an overall decrease of 64%. As in the solar photovoltaic market, the combined capacity of Chile’s 10 largest wind farms exceeds 1 GW, which makes it highly concentrated. Despite this, new wind projects are announced, among which stands out “El Horizonte” of Colbún, a 607 MW wind farm that represents the largest project in Latin America and one of the largest in the world.
With the advances that the Chilean market has experienced since 2013, it will now enter a phase of consolidation like that experienced in other more mature markets.
As the market has matured and many players can already show one or more successfully connected factories, some transactions take place at early stages, that is, during project development or before construction. Private investors, such as investors and industrialists, acquire ready-to-build projects to be sold to long-term investors once operational.
Despite the planned consolidation phase, given long-term government objectives, rapid development is expected in the solar and wind markets. Small and large-scale solar power is expected to continue the strong growth recorded in recent years. The solar photovoltaic market in particular will be dominated by new developments and new constructions over the next 3 to 5 years.
An important feature of the development of the Chilean renewable energy market is the absence of support mechanisms, tax benefits or electricity charges. The projects are financed by private investors.