Chile has decided to go all-in on the clean energy transition, and is setting the standard for other Latin American countries.
This is the result of several factors that make Chile a perfect candidate for clean energy adoption, including a very receptive population, ideal conditions for traditional clean energy deployment, and a government that is heavily invested in new forms of renewable energy.
The country has experienced the rapid development of both the wind and solar sectors and has invested heavily in the creation of green hydrogen, which they hope will become a major economic and environmental factor.
A transition takes shape
Up until 2016, Chile was matching the rapid demand for new energy by increasing coal usage.
A report by Ember found that Chile hit its peak coal consumption in 2016. From 2000 to 2016 coal generation grew 258%, while related carbon emissions rose 165%. While the demand for electricity has risen 11% from 2016-2021, power sector emissions have fallen 6%. This is due to the 13 TWh of added wind and solar generation during this period. This emission reduction is expected to continue at an increasing rate, as this study estimated emissions reductions of as high as 27% in 2022.
Perhaps the most telling statistic in the transition to renewable energy in Chile is that for the first time in its history, Chile is generating more of its electricity from solar and wind than from coal.
From October 2021 to October 2022, Chile produced 27.5% of its electricity from solar and wind, whereas coal produced 26.5% of the electricity.
Public buy-in
Chile has one of the most pro-environmental populations in the world.
According to a study on international public opinion on climate change, 93% of respondents in Chile said they were either “very worried” or “somewhat worried” about climate change. This represented the second-highest respondent rate of the 192 countries and territories studied.
Chile had the highest rate of response when asked about the role of the government in preventing climate change. 91% of the respondents in Chile said that climate change should be a “very high” or “high” priority for the government. Respondents in Chile were also significantly more forward-thinking about the effects of climate change on future generations.
When asked about how climate change will affect future generations, 80% of the respondents said that climate change would harm future generations “a great deal.”
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The push by the population for renewable energy is mirrored by government officials.
At the inauguration of the Cerro Dominador project the bi-minister of Energy and Mining, Juan Carlos Jobet, said “We have to take advantage of the potential of Chile to achieve better energy and the country we want.” Chile has committed to becoming a country with net-zero emissions by 2050 and expects to reach a power grid that is 70% renewable by 2030.
Favorable conditions for clean energy
Chile is perfectly positioned geographically to take full advantage of more traditional forms of renewable energy.
The north of Chile produces some of the highest levels of solar radiation in the world. Projects such as Cerro Dominador, which is located in the far northern region of Antofagasta, became the first solar thermal plant in Latin America. This plant, in combination with the pre-existing photovoltaic plant, will generate the energy to power 380,000 homes. In the south of the country, the wind potential on land is equal to the power that other countries can only achieve with offshore wind energy.
Endowed with these natural resources, it is not surprising to see how quickly the solar and wind industries have grown in Chile.
According to a report done in 2020 by the Chilean Government titled “National Green Hydrogen Strategy” the level of solar and wind generation in Chile has increased by 5 times from 2014-2020. While the growth in solar and wind energy is very promising, Chile is looking to expand into less traditional clean energy options.
Chile is invested heavily in the production of green hydrogen, which they believe has the capacity to create an industry the size of the Chilean mining sector. An estimated 25% of the emissions in Chile could be mitigated by green hydrogen by 2050, and there are plans to begin exportation by 2030. Large-scale green hydrogen production is possible due to the low cost in both the Atacama and Maganalles regions of Chile.
Roadblocks ahead
The energy transition in Chile is not without challenges, most notably transportation of renewable generated power.
A report from VoxEU found that a major cause of concern is the transportation of renewable energy. The lack of transmission lines that connect sites of renewable generation with large areas of consumption resulted in up to 290 GWh of solar and wind power that was not able to be used in 2022.
While problems remain, Chile continues to be at the forefront of the transition to renewable energies. By addressing grid infrastructure problems, the rate of renewable generation will continue to grow, reducing the need for coal and lowering climate emissions. The possibility of adding green hydrogen production to an already strong solar and wind economy means economic growth, renewable energy job growth, and a standard for other South American countries to follow.
