President of Chile announces Chile's solar energy strategy

Chilean President giving a speech

Chilean President Michelle Bachelet presents Chilean solar strategy, 12.09.2016; Photo: Rainer Schroeer/GIZ Chile

On 12 September 2016 in Santiago de Chile, Chilean President Michelle Bachelet inaugurated the largest photovoltaic roof system plant in South America (8 MW at completion). During the ceremony, the President also announced a comprehensive programme for realising a solar transformation of the Chilean energy industry. The programme is being supported with public and private investments totalling around USD 800 million.

In the presence of the Chilean Energy Minister Máximo Pacheco, the Minister of Economics Luis Felipe Céspedes and around 200 high-ranking guests from the world of politics and the private sector, the president underscored the significance of solar energy for the future energy supply of the country. She also pointed to the potential of solar energy to boost the Chilean economy.

The Chilean Government aims to support innovation in the solar industry sector over the next few years with the close involvement of the private sector in order to strengthen local value creation and promote productive uses of solar energy. Up to now the energy demand of the mining industry located in the north of Chile has been met with coal and diesel, but this is due to change by tapping into the great solar energy potential. The current crisis in the raw materials sector could prove useful in advancing innovative, cost-effective and climate-friendly solutions in the sector.

In his speech, Energy Minister Pacheco referred to the fact that in the latest calls for tender for energy supplies from energy providers for end customers such as private households or small businesses, the energy supplies from renewable energy, especially solar, offered by private investors have now exceeded USD 30/MWh. He also emphasised that the current investment of USD 13 billion for expanding energy supply with renewable energy in Chile are considerably higher than for the mining sector, which has been normally top priority.

The German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB) is supporting this process at many levels as part of a project by its International Climate Initiative (IKI) with the German Climate Technology Initiative (DKTI). The project is being carried out by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH in cooperation with the Chilean Ministry of Energy.

The IKI project was able to help in this process, which posed a great challenge in the light of the current situation. Chile has a liberalised energy market, which manages without any subsidies or prioritisation of renewable energies. In discussions at an expert roundtable including representatives of German grid operators, opponents and proponents were able to have constructive discussions about the advantages and risks of expanding renewable energy. In the course of the discussion, considerable initial doubts about renewable energy were eliminated, allowing participants to jointly develop the basis for the achieving the targets set by the government of 60% renewable energy supplies by 2035 and 70% by 2050.

An expert committee in which GIZ actively participated provided key impetus for Chile's solar strategy introduced by President Bachelet. With the announcement of its solar energy strategy, Chile is taking an important step towards fulfilling its nationally determined contributions (NDCs), which aims for a reduction in emissions intensity of 30% by 2030.