Chile plans to close coal-fired power stations

A typical coal-fired power plant in Northern Chile; Photo: GIZ-Chile

A typical coal-fired power plant in Northern Chile; Photo: GIZ-Chile

The Chilean Government has set itself the objective of reducing its CO2 emissions by 30% by 2030. A crucial milestone is the agreement on ending coal-fired electricity generation signed in January 2018 with the four major Chilean electricity producers. To oversee the shift away from coal and its impact on as broad a basis as possible, a multidisciplinary commission has been set up under the management of the country’s Ministry of Energy. The commission has 23 stakeholder members.

As well as the Ministry of Energy, the commission comprises representatives of the national grid operator CEN, the electricity market regulator CNE, the operators of the country’s 26 coal-fired power plants (ENEL, AES, COLBUN and ENGIE), non-governmental organisations, trade unions, mayors of the municipalities affected by the policy shift, industrial electricity consumers, civil society, academia, business organisations and the Chilean Ministry of the Environment.

There are two international members of the commission: Chile’s representative on the World Wide Fund for Nature (WWF) and Rainer Schröer from the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. Mr Schröer coordinates the Promoting Solar Energy in Chile project, which is supported by the German Environment Ministry (BMU) as part of its International Climate Initiative (IKI).

IKI projects are providing six of the ten input studies analysed by the Ministry of Energy and selected as the basis for the commission’s discussions. Commission meetings cover a wide range of issues: international experience with decommissioning coal-fired power plants, the impact of shifting away from coal on the security of the electricity supply system, and the effects on local economic growth, jobs and the health of the population. Discussions also focus on technological alternatives to the continued operation of coal-fired power stations.

A meeting of the commission overseeing decommissioning of coal-fired power stations; Photo: GIZ-Chile

The commission held its first monthly meeting on 11 June 2018. Its 20 August 2018 meeting was also attended by Chile’s Minister of Energy, Susana Jiménez. Dr Patrick Graichen from Agora Energiewende, a think tank focusing on dialogue with energy policy makers, gave a presentation on the current debate in Germany about the country’s shift away from coal, followed by discussion. The International Energy Agency (IEA) and the Government of the United Kingdom contributed further international experience in this area.

Dr Graichen emphasised the importance of flexible energy supply systems, which will enable the key future forms of energy – wind and solar – to be integrated and guarantee the security of the system. He added that a reform of the market for energy services was vital to bring flexibility into the electricity market and that higher CO2 levies could accelerate the process of shifting away from coal. A study into the impact on Chile’s energy transmission system of decommissioning coal-fired power stations is currently being compiled by the country’s grid operator CEN and will be presented to the commission by the end of September 2018.

The environmental impact of closing coal-fired power stations is being explored jointly by the Ministry of the Environment and the Ministry of Energy’s department for sustainable development and will be discussed by the commission. The Ministry of Energy’s department for energy policy is analysing the economic and social impact of the shift and will also be presenting its conclusions to the commission.

The objective of the multidisciplinary commission overseeing the decommissioning of coal-fired power stations is to debate the principles and arguments around shifting away from coal in a participatory process and to summarise them in accessible public documents. On this basis, the operators of coal-fired power stations in Chile will then draw up and present detailed timetables for winding down their operations. These timetables will subsequently be analysed and scrutinised to ensure that all the timetables drawn up by individual companies can be implemented and to identify any concerns about system security or other aspects.

More than 86% of the coal used to generate electricity in Chile is imported, with domestic coal accounting for just 14% of demand. Despite this, comprehensive consideration is being given to ensuring that structural change in the mining areas for domestic coal is socially sustainable. Trade union representatives from the companies involved and representatives of the municipalities affected by closure of coal-fired power stations are playing an active part in the commission and have so far stimulated lively debate on their positions.