Global IssuesSolar and Wind Power Wealth Does Not Reach Consumers in Chile
SANTIAGO, Nov 20 (IPS) - Chile, a country rich in solar and wind energy and with huge photovoltaic power stations and wind turbines in its elongated territory, managed to change its grid by incorporating renewable energies, which account for an installed capacity equivalent to 43.8 % of its electricity production.
However, it is woefully lacking in distributed generation projects, also known as decentralised generation, which are small scale, mostly dedicated to self-consumption and involving organised communities. This is so even though these initiatives would introduce the population to the advantages of clean energy.
Distributed generation would allow such a shift, but is currently in its infancy in this South American country of 19.8 million people. It lacks adequate legal impetus, access to financing and suffers from a cultural deficit among a population that knows little about it.
Successful projects belong to mega-companies that have installed parks and wind turbines in the northern Atacama Desert and in southern Patagonia, between the Andes and the Pacific Ocean, selling their generation to the National Electricity System (SEN).
This profitable business does not benefit Chilean consumers who are suffering a huge tariff increase that will reach up to 60% in 2025. It is a gradual increase that began to be charged in July and will culminate next January after five years of tariff freezes due to the covid pandemic.
Thus, the impact of distributed generation with its panels on the roofs of homes, schools and community or municipal buildings is small.
The leftist government of Gabriel Boric sought to promote this citizen energy and reach the goal of 500 megawatts (MW) of installed capacity by the end of his term, in March 2026.
However, 17 months away from reaching that goal, distributed generation is minimal and only 0.1% corresponds to joint generation, as distributed generation is also known, according to the state-run National Energy Commission.
The Ministry of Energy told IPS that as of November 2024, the total installed capacity of distributed generation projects for self-consumption reached only 290 MW.
"Statistics show an upward trend in this type of project. Several initiatives promoted by the Ministry of Energy seek to encourage the development of this segment, such as the Public Solar Roofs 2.0 programme, which is being implemented and aims to install photovoltaic projects in public institutions," said the institution that directs the country's energy policy.
In 2015-2019, this programme installed photovoltaic systems on 136 buildings in 13 regions of Chile for a total of 5.3 megawatt peak (MWp). A technical office was then created to support public institutions in their feasibility analyses of solar energy plans.
Chile has decided, as part of its international climate commitments to reduce its greenhouse gas emissions, that its non-conventional renewable energies will contribute 80% of electricity generation by 2030 and 100% by 2050, when it will reach net zero emissions.
Barriers in Chile
Cristián Mires, lawyer and president of the NGO Energía Colectiva, says there are a number of barriers to developing jointly owned distributive energy.
"These projects are not cheap. Technical, legal and financial advice is required. A share is equivalent to at least US$530 per user. And if we want bigger savings, we are talking about up to US$2,100. And the majority of the population can't afford that cost," he told IPS.
There is no public or private funding for decentralised generation facilities, he claims.
This slows down the implementation of the 2014 Law on Distributed Generation for Self-consumption, which allows households, schools and businesses to self-supply their electricity use through their own generation and inject the surplus into the SEN. In practice, such generation has very restrictive rules for joint ownership.
"It needs to be modified, and as the Citizens‘ Energy Action Group we are participating in technical roundtables with the government and parliament to that end," Mires said.
"We are used to a centralised system and although there has been fossil energy replacement by renewable energy, it is still a large-scale, centralised model with negative impacts," he added.
In August, Energía Colectiva, based in Chile and present in other Latin American countries, launched the document Citizen energy in Chile, proposals for its promotion and implementation, where it claims there is potential to reach eight gigawatts (GW) of such citizen generation by 2040.
According to the document, Chile needs "a transition that conceives energy as a right, democratising its production and distribution. A transition focused on satisfying human needs, but which nevertheless understands the pressing need to reduce energy use. Such a transition can only be driven by citizens".
Energy Communities, a key
So-called Energy Communities seek to encourage the participation of new groups in the production, management, use and marketing of energy.
They aim for a decentralised, local energy model with less environmental impact.
These communities seek to organise citizens to generate and manage their own energy, whether for social, economic and/or environmental purposes.
"These communities are considered a fundamental tool for carrying out just energy transitions, where people play a central role in the transformation towards more equitable systems of energy generation and use", according to the specialised magazine Energía y Equidad.
Based on the use of renewable energy, the Communities offer access to affordable, clean and secure energy; enabling an active participation in response to the climate and ecological crisis by reducing greenhouse gas emissions.
In short, these Communities aim to promote local energy autonomy, strengthen social cohesion, reduce greenhouse gas emissions and decontaminate the local environment.
The 2014 law and its regulation five years later set standards for joint generation and joint ownership.
The Nueva Zelanda school in the municipality of Independencia, in the northern part of the capital, and Coopeumo, a farmers' cooperative in the O Higgins region, bordering the Santiago metropolitan region, are community projects developed by municipalities and with citizen participation.
Both are connected to a grid into which they inject the energy generated and then receive discounts on their electricity bills.
Jorge Nauto, principal of the Industrial Secondary School of Valdivia, a city 850 kilometres south of Santiago, praised the experience of installing photovoltaic panels on the roof of his school.
"It is a 70 kilowatt peak (kWp) system determined according to the available surface area and the building's annual consumption. It allows generating power for the premises and the injection of surpluses into the conventional electricity grid through the use of the Distributed Generation Act," he told IPS from his location.
"Thanks to this generation, we achieved a significant reduction in electricity bills," Nauto said, before emphasising the value, also educational, of using clean, renewable energy.
New business model
Antu Energía is a company based in Coyhaique, in the southern region of Aysén, which implements a new business model with photovoltaic energy.
It allows remote discounts, which means that a person can own or participate in a photovoltaic plant that injects energy in one place and discount that value in another place from the same distribution company.
We are calling for small companies or individuals to participate in Virtual Solar Panels by acquiring a minimum unit equivalent to generating 500 watts," Manuel Matta, founding partner of Antu Energía, told IPS from Coyhaique.
The model lowers the investment to US$737 per kilowatt (kW) installed and compares favourably with a similar individually driven project that costs US$2,632 per kW.
This electrical engineer has already sold 28 of 60 minimum units of participation in the 30 kW plant installed on the roofs of the San Felipe high school in Coyhaique's Plaza de Armas.
Daniela Zamorano, project coordinator for Energía Colectiva, told IPS from Joao Pessoa, in the northern Brazilian state of Paraíba, where she lives, that Chile lacks the political will to promote jointly-owned distributed generation.
"We are seeing problems today with rising rates, and the solutions proposed by the government always come from the logic of subsidising consumption. This is a snowball that reaches gigantic public spending amounts. But they do not visualise options for a long-term solution such as distributed generation," she said.
© Inter Press Service (2024) — All Rights ReservedOriginal source: Inter Press Service