Cogeneration reduces energy costs for hospitals in Chile

Cogeneration introduced in pilot plants at public hospitals in Chile.

Coyhaique is a small, lively town in southern Chile. Home to 40,000 residents, the town serves as the supply hub for central Patagonia with a catchment area covering hundreds of kilometres. As in other parts of Chile, the heating fuel used by most private homes in this region during the long winters includes damp firewood. Public buildings are equipped with liquid gas containers for generating heat. Other heating methods are relatively expensive: electricity for households in Patagonia costs around 0.22 €/kWh. The combination of wood heating, industrial emissions and traffic has turned Coyhaique into one of the most contaminated cities in all of Latin America. A study conducted by the University of Chile found that the level of fine dust pollution reached 882 micrograms per cubic metre in the winter of 2015, compared to ‘just’ 722 in Beijing during the same period.

This is one of the factors that has led the Chilean Government to declare the introduction of efficient and climate-friendly technologies as one of its priorities. There have been notable achievements in recent years thanks to the increased use of renewable energies. As efforts are being made to further enhance energy efficiency, national energy policies are now placing greater emphasis on cogeneration. This shift has also been bolstered by the operating results from the plants installed in three public hospitals as part of a pilot project. The hospitals selected for this project are situated in various climate zones: one is in the capital of Santiago, another in Coyhaique and the third in Punta Arenas along the Strait of Magellan. The project was funded by the International Climate Initiative (IKI) of the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB) and implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH together with the Chilean ministries of energy and health and the Chilean Energy Efficiency Agency (AChEE) in 2014 and 2015. The Berlin Energy Agency (BEA) conducted the feasibility study for implementing the cogeneration plants in the three hospitals in 2011 and 2012.

After just one year of operation, the results achieved by the cogeneration plant in Coyhaique proved spectacular. Approximately EUR 250,000 in energy costs could be saved compared to the previous year. The hospital itself is using the electricity generated by the plant. Additionally, warm water is being recirculated into the distribution network using two heat exchangers, eliminating the need for large collection tanks as well as reducing heat losses. A Chilean installation company carried out the detailed planning work and also installed and integrated the plant in the regional hospital.

Current state of cogeneration plants in Chile

According to the Chilean Energy Efficiency Agency AChEE, 41 cogeneration plants with a total capacity of 1.5 GW are operational in Chile, most of which serve the paper and cellulose industries. However, the majority of these were installed in the 1950s and 1960s and are no longer considered efficient by today’s standards. In terms of, only five plants within the capacity range of 50 kWel to 2 MWel that is particularly relevant for industrial and commercial applications were operational in Chile at the end of 2014, with a total combined capacity of 5.5 MWel. Many of these, too, are more than 15 years old.

Until recently, the requirements for installing and operating cogeneration plants were determined by the Electricity and Fuel Authority SEC (Superintendencia de Electricidad y Combustibles) on a case-by-case basis. Now, however, the regulatory conditions covering installation and commissioning are being streamlined and standardised with GIZ’s support. German DIN standards are set to serve as a basis for the approval of cogeneration plant components for the Chilean market. At the same time, a checklist that will outline the steps required to implement cogeneration projects in Chile is being created in cooperation with the SEC.

From a business perspective, this is an interesting time for the cogeneration market in Chile. Market activity promises to be vibrant in the coming years on account of high economic potential, improved regulatory conditions and falling prices for natural gas on the global market. With the pilot plants in the public hospitals having generated positive reactions, additional measures for promoting cogeneration in Chile are currently being initiated. In the medium term, the aim is to spread Chile’s experiences with efficient cogeneration plants to its neighbours Argentina, Bolivia and Peru. At present, this situation is creating markets in South America that could prove attractive for suppliers of cogeneration plants, components and engineering services from Germany.