Environment and climate change

Ready for change: Chile is on course for a future with renewables

Chile is developing innovative storage solutions that will achieve a consistent energy supply from solar and wind power.

Ready for change: Chile is on course for a future with renewables

The Andean state has set itself an ambitious goal for its energy transition: a fundamental restructuring of electricity production. In the north of the country, South America’s first power plant to use concentrated solar power (CSP) is due to join the grid in 2020. Chile is also using innovative approaches to realise its pledge to phase out coal-fired power, with solar power plants and heat storage facilities set to make solar and wind-powered electricity available around the clock. 

Chile is emerging as South America’s pioneer in the field of renewable energy and climate change mitigation. While solar and wind power accounted for only six per cent of the energy mix in 2014, five years later the figure is now 20 per cent. By 2035, the plan is to generate more than half of electricity from renewable sources. The conditions could not be better: the Atacama Desert, in the north of the country, has among the most intensive solar radiation in the world and offers ideal conditions for producing solar energy. Chile’s 4,200 kilometre-long coastline supplies plentiful fresh air – perfect for wind parks. And large amounts of geothermal energy lie dormant under hundreds of volcanoes. 

On behalf of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH has been supporting Chile in transforming its energy sector since 2008. ‘Cooperation with GIZ has been very important for exchanging knowledge and technology. Our experts have expanded their know-how considerably – for example, through placements at German energy companies,’ says Juan Carlos Olmedo, President of Chile’s national grid operator Coordinador Eléctrico Nacional (CEN).

The world’s cheapest solar power

In partnership with the Chilean Ministry of Energy, GIZ has already made a number of successes. GIZ advisory services have helped to increase the maximum capacity of solar power plants from less than seven megawatts in 2014 to more than 2,400 megawatts in 2018. The maximum capacity of Chile’s wind parks has also risen substantially in recent years, from 335 megawatts to 1,700 megawatts. 

The Chilean Government’s declared aim is a stable and low-cost supply of electricity. All types of energy must compete on price. There are no subsidies of any kind. The fact that renewables often come out best in the competitive market is due not least to their price: thanks to the ideal conditions, and with technology costs falling all the time, Chile is now producing the world’s cheapest solar energy. In the north, one kilowatt-hour of solar energy can be generated for less than two US cents. The production cost in Germany is around three times as high.

Converting coal-fired power stations into energy storage units

The Chilean Government is also aiming to reduce greenhouse gas emissions by 2030 – by at least 30 per cent. In January 2018, it took the decision to phase out coal. At present, the country still obtains just under 40 per cent of its energy from coal-fired power plants, a figure similar to Germany’s. On behalf of BMU, GIZ is providing advice on finding alternative uses for decommissioned power stations and retaining jobs. One approach is to convert retired coal-fired plants for use as zero-emission heat storage units (‘Carnot batteries’). These function much like a battery: salt is heated using low-cost solar power or surplus energy from wind plants, thus retaining the energy generated. ‘We see a great opportunity here in the technological alternatives that will allow some facilities to remain in use for grid support or storage, as this will also make renewable energy available around the clock,’ says Juan Carlos Olmedo. 

Chile’s solar tower

Alongside the conversion of coal-fired power stations, concentrated solar power also plays a crucial role in Chile’s energy transition. Currently under construction in the Atacama Desert, ‘Cerro Dominador’ is South America’s first concentrated solar energy plant. Energy storage is a crucial issue here, too. Around 10,000 reflectors concentrate sunlight on to the top of the 250-metre tower. The special feature is that energy is stored temporarily in thermal batteries as molten salt and then converted into steam via heat exchangers, driving a turbine that can generate up to 110 megawatts of electricity – 24 hours a day, 365 days a year. The power plant is due to start operations in 2020. It will be able to supply as many as 380,000 households with green electricity, saving just under 870,000 tonnes of CO2 annually – comparable to the emissions from around 300,000 cars. Another important step forward for Chile on its way to climate neutrality.


Last update: November 2019

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