Thursday, April 12, 2012

Chile's uncertain renewable energy future

Thursday, April 12, 2012
However, if one area could prove a stumbling block in the country’s drive to become a fully-fledged developed nation, some fear it could be in meeting its energy needs.

In September 2011 around 10 million Chileans — of a population of less than 17 million — found themselves in darkness due to a blackout, which paralysed the country’s copper mines and brought the capital Santiago grinding to a halt.
Power was restored within hours but politicians have struggled to mask the fact that the power cut was a worrying sign of the questions looming large about Chile’s energy future.

Overdependence on hydroelectric sources, which account for 40 percent of Chile’s electricity, with almost all the rest coming from imported fossil fuels, has led to drought-related power shortages, a situation exacerbated by Argentina cutting gas exports.
Furthermore, according to Business Monitor International’s (BMI) latest analysis, demand looks set to increase from 58.8 TWh in 2011 to 70.5 TWh by 2015 and 87.8 TWh by 2020.

Central to the government’s current plans to meet the increase is HidroAysen, a project approved by President Sebastian Pinera in May 2011, which would see five hydroelectric plants built on two pristine rivers in Patagonia at a cost of around $3.2 billion. With an installed capacity of 2750 MW, the dams would generate more than 18 TWh a year — around a third of current consumption.

But the plans have caused a public outcry across the country as they would see approximately 5900 ha of wilderness flooded and could threaten the Huemul, an endangered Andean deer which features on Chile’s national coat of arms. One poll found 74 percent were against HidroAysen on environmental grounds. Whether or not it goes ahead will have a substantial effect on the energy Chile needs to find from other sources.

After taking office in March 2010, President Pinera went on record as saying that by 2020 he wanted 20 percent of the country’s energy needs to come from non-conventional renewable energy (NCRE) — not including large-scale hydropower — up from just 4 percent at present.

Given that the country wants to raise its installed generating capacity from 15 GW at the end of last year to at least 25 GW over the same period to sustain rapid economic growth, the so-called ‘20/20’ goal would require almost 5 GW of installed capacity from NCRE over the coming decade.

In November, a report by the Electricity Development Advisory Committee (CADE) — appointed to advise the government on how Chile can best increase its electricity generation — concluded that that the pace of development of NCRE projects is too slow and that changes are needed to give such projects better access to the market. They also came out in favour of HidroAysen, saying large-scale hydropower potential in the south of Chile is ‘a potential energy source highly relevant to the future matrix’.

Nonetheless, speaking at the New Energy Forum in Madrid in October, energy minister Alvarez, perhaps mindful of the recent blackout, admitted Chile needed ‘to strengthen supply security’ and spoke of the country’s ‘fabulous alternatives’ for renewable energy. He declared his country ready for a mass roll-out of renewables, as he emphasised that there was ‘huge room’ for investment to help develop the market.
But the fact remains that at present Chile generates around 75 percent of its energy from imported fossil fuels and the government does not as yet appear fully convinced by the potential of NCRE generation.

‘Every country that wants to be well-prepared for the next decade needs to have an important part of their energy needs coming from renewable resources,’ said Jose Ignacio Escobar, executive vice-president of the Chilean Association of Renewable Energy (ACERA). ‘Unfortunately, here we see a lack of political vision from the authorities. We are still not sure why they are continuing to support the conventional energies and the status quo.’
BMI predicts that from 2011 until 2015 Chile will see annual electricity gains of 26 percent from gas-fired supply, 7 percent from renewables, 6 percent from coal and 5 percent from hydropower. This will see Chile’s power supply shortfall gradually diminish and by 2020 that could even be scope for ‘very modest net exports’.

While this may be heralded as good news by politicians, there is concern that Pinera has already seemingly downgraded the ‘20/20’ goal from a firm pledge to an ambition. Some experts believe the government has already realised that it is unlikely to materialise.
Hugh Rudnick, professor of electrical engineering at the Catholic University of Chile, and a member of CADE, said: ‘The President said that 20/20 was a key thing to achieve but later on he said, through his ministers, that it was a wish rather than a commitment. They started to realise [meeting the goal] would mean using what is already in the pipeline and that does not necessarily mean efficient renewable energy. I would be sceptical as it is too much to achieve in only eight or nine years. 15 percent by 2020 or 2025 could be more achievable.’

At present the legal obligations for electric utilities to invest in and supply renewable energy sources are lower still, at 8 percent by 2020 and 10 percent by 2024. But rather than using the current dilemmas as an excuse to forget the 20/20 target, Escobar wants to see it written into law. ‘If you compare our targets with many other countries in similar situations to Chile in terms of growth and commodity exports, it is totally feasible,’ he insisted. ‘There are countries that in very few years with the right regulatory conditions have managed to get to a high level of renewables but it is very difficult in Chile with the current conditions,’ he says.

One of the conditions making the transformation difficult is a lack of transmission capacity between remote areas which are most suitable for many renewable projects and densely populated cities.Another common complaint is that hydropower projects of more than 40 MW do not qualify as NCRE.
In October 2011 the $450 million Chacayes run-of-river plant was inaugurated, the first of several such projects planned by the Australian firm Pacific Hydro which will add more than 600 MW of installed capacity to Chile’s national grid.
But the plant has an installed capacity of 111 MW, meaning the owners have to buy power from smaller renewable projects to comply with the law.
CADE argues that large-scale hydropower in the south of Chile could provide future power.

Escobar believes that with the right changes, renewables can solve the energy problems which he says have caused energy prices in Chile to rise at almost six times the level of inflation and drive up the price of other services. ‘Chile is a very rich country in renewable resources but very poor in fossil resources,’ he said. ‘We don’t have oil, gas or coal. Chile is suffering from this lack of fuels and lack of energy independence for the last 15 years.’
‘Energy in Chile is very costly, it’s very unsafe because it relies on faraway countries and has to be brought here via roads and ports and we are not sure of the long-term reliability of these fuels. Renewables are going to be a reliable, clean and cheap solution that can be introduced quickly to solve the big problems Chile has over the next five years.’ He concludes: ‘The short-term solution to bring a breath of fresh air into the system and reduce use of fossil fuels is renewables.’

Indeed, he is not even convinced that HidroAysen is crucial to Chile’s needs. ‘In general terms, there is no project that is absolutely without question necessary for the survival of the country,’ said Escobar, adding: ‘I think we have enough projects to cover the demand of the country with the right incentives and framework. We have the resources so it’s a question of finding the political will.’
Professor Rudnick, however, believes HidroAysen must go ahead if Chile is to avoid what supporters of renewables least want to see – new investment in ‘dirty’ power generation.

‘The government is very keen that they must have large hydro without greenhouse gas emissions but it remains to be seen if they will achieve this with the very strong opposition from non-government institutions,’ he said.
‘I’m very positive that this [HidroAysen] is the kind of thing we need. If we don’t do it, we will have to go towards building new coal plants instead. Or eventually if Patagonia is not used then we will even have to look at nuclear but Chile is an earthquake zone and with the tsunami in Fukushima there has been growing concern.’

If Chile is to avoid that path, then wind and solar power must play a rapidly growing role in the years ahead.
U.S.-based Pattern Energy Group is expected to start developing the 115 MW El Arrayan coastal wind farm, 400 km north of Santiago, in early 2012 with commercial operation to begin in the second half of 2013. It will be the country’s largest wind energy project and will be equipped with 2.3-MW Siemens turbines, the company said.

According to the Global Wind Energy Council (GWEC), Chile ‘has good wind resources from the northern deserts to the extreme south, including the south-central zone which is home to around 80 percent of the country’s population and two thirds of its industry.’ It estimates Chile’s wind energy potential at around 40 GW — and yet to the end of 2010 the country had only 172 MW installed.

GWEC cites a lack of government policy support, poor grid infrastructure and a need for more electrical engineers as barriers to wind energy development.
Mauricio Trujillo, GWEC’s project manager for Latin America, said progress towards fulfilling the country’s wind potential was likely to be slow. ‘At the moment it is too remote to develop wind power in the south of the country because the lack of infrastructure makes it prohibitive,’ he said. ‘The only thing that could change the scenario would be the construction of HidroAysen and even then it will be complicated to add wind because of the characteristics of the possible transmission infrastructure.’ He said it was difficult to predict the pace of development in the coming years but ‘a medium-range scenario if we see new transmission infrastructure would be around 1500-2000 MW in 10 years.’

Escobar is a little more optimistic: ‘Our estimates are that with the right regulatory systems we can have 2.5 GW to 4 GW of wind by 2020 and 5 GW by 2030.’
He is also excited by the potential for solar power in Chile, where the Atacama desert enjoys the highest levels of solar radiation. ‘I think there are a lot of large-scale photovoltaic (PV) projects in development,’ he said. ‘We will be seeing a big change in the next few years as the costs of solar go down. If the cost keeps dropping after 2015, solar can definitely compete with coal in the north of the country.’
In 2011 MPX Energia also announced plans to develop a 200 MW solar facility in Chile at a cost of $400 million. The company is searching for a suitable location in the Atacama and construction is unlikely to begin until 2016.

In construction since December 2010 is a major PV project by Spanish firm Solar Pack, near Calama in the middle of the Atacama. It will provide electricity to the nearby Chuquicamata copper mine, the world’s largest. The project has been described as the first industrial solar electric power plant in South America and the first solar power plant globally to be constructed without subsidies or specific tax benefits. It will have 1 MW of installed capacity across an area of 15 acres, will generate 2.69 GWh per year. According to Solarpack, the plant will have a life cycle of 35 years and will be the most productive in the world with a 31 percent capacity factor.

Professor Rudnick said recent surveys suggest many people expect solar to solve the country’s conundrum as it ‘should be abundant and free’ but they do not appreciate the costs of the technology involved. ‘There are a lot of political positions being taken on energy in Chile,’ he added. ‘The challenge is not that we don’t have alternatives, but that we as a society need to agree on what to do.’

With 26,000 subscribers and a global readership in over 170 countries around the world, Renewable Energy World Magazine is targeted at those who make growth happen in renewable industries. Covering policy, technology, finance, markets and more, Renewable Energy World magazine covers all technologies and all markets. Published six times per year, a special Directory of Suppliers Issue is published in July/August which is distributed year round at key renewable energy events worldwide.
View the original article here

0 коммент.:

Post a Comment