Chile allots US$400 million for renewables, efficiency

The government of Chile has created a US$400 million fund to promote new renewable energies and energy efficiency, including small hydropower and ocean energy.

Energy Minister Marcelo Tokman announced August 22 that the fund will be administered by the government’s economic development agency, Corporacion de Fomento de la Produccion (Corfo). In March, President Michelle Bachelet signed a new energy law, requiring electric utilities to invest in, and supply up to 10 percent of their electricity from, non-conventional energy sources, including small hydro and ocean energy. (HNN 3/21/08)

�The energy of winds, the tides, sun, biomass, and geothermal does not depend on what happens with our external suppliers, or on the fluctuations of prices in the international markets,� Tokman said.

The US$400 million is to be distributed in a guarantee fund for investments in new renewable energies and energy efficiency, a contingent subsidy for geothermal exploration, a contingent subsidy to promote construction of transmission lines to serve new renewable projects, and contributions to risk capital funds for renewable energy projects.

Chile, which imports nearly all of the fuel it consumes, has been grappling with a serious energy shortage amid cuts in natural gas from sole supplier Argentina and lower hydroelectric reservoir levels caused by scant rainfall.

�Clearly we are turning the crisis that we faced into an opportunity,� Tokman said. �We have managed to identify diverse scopes in which we can conduct actions that allow us to incorporate clean energies and criteria of energy efficiency in the country. With this the entire country wins.�

Earlier in August, Tokman outlined plans to create a renewable energy center to serve as a clearinghouse and sponsor of non-conventional renewable energy sources for Chile and for South America. (HNN 8/8/08) Bachelet plans to extend the proposed Centro de Energias Renovables to include to the union of South American nations, Union de Naciones Suramericanas, during her acting presidency of the organization.

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