UPDATE – Chile president signs renewables law, including hydro, ocean

Chilean President Michelle Bachelet signed a new energy law into effect March 20, 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.

The lower house of Congress, the Camara de Diputados, voted unanimously March 5 to accept Senate amendments to the bill, sending it to Bachelet for signature. (HNN 3/6/08)

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.

“The main idea is to establish conditions to attract investment to projects for non-conventional energy by accelerating the development of the market, eliminating entry barriers making these new sources compatible with the country’s electricity market,” Bachelet said on signing the law.

The energy ministry said the obligation is for 5 percent of electricity to come from non-conventional sources from 2010 to 2014. After that, the percentage is to increase .5 percentage point per year until it totals 10 percent in 2024.

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. (HNN 11/20/07) 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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