Chile requires renewable energy investment, including hydro, ocean

Chile’s Congress passed legislation March 5 requiring utilities to invest in, and supply up to 10 percent of their electricity from, �non-conventional� energy sources, including small hydro and ocean energy.

The lower house of Congress, the Camara de Diputados, voted unanimously, 95-0, to accept Senate amendments to the bill, sending it to President Michelle Bachelet for signature.

The legislation requires that non-conventional energy sources account for at least 10 percent of the energy supplied by Chile’s electric utilities by 2024. (HNN 4/12/07) Non-conventional sources include hydro projects up to 40 MW, as well as wind, solar, geothermal, and biomass sources. A Senate amendment to the bill added ocean energy including tidal, wave, and ocean thermal sources.

“To ensure that these energy projects are effectively implemented, the obligation will be 5 percent in 2010 to 2014,� an energy ministry statement said. �After that, the percentage will increase .5 percentage point per year until it totals 10 percent in 2024.”

The energy ministry said the law establishes conditions necessary to attract investments in non-conventional energy projects, accelerating development of the sector, eliminating barriers to innovation, and generating confidence in such technologies in the electricity market. (HNN 11/20/07)

Energy Minister Marcelo Tokman said approval of the law would diversify Chile’s energy matrix in an environmentally friendly manner and “was the only way to confront future energy risks and challenges.”

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. Short energy supplies caused electricity prices on the spot market to more than quadruple in 2007, and are cramping Chile’s economic growth.

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