Chile’s energy outlook


SANTIAGO – Chile has been in the news lately as a champion of solar and wind electricity generation. Chilean officials have announced a very ambitious goal, saying the country is on track to rely on ‘clean’ sources for 90 percent of its electricity needs by 2050, in other words, doubling from the current 44 percent in 2017 and 22 percent in 2010. (‘clean’ here includes hydro, wind, solar, geothermal, and biomass).

This nation’s rapidly expanding clean energy distribution grid, which includes some new solar power plants and wind farms, is one of the most ambitious and successful in Latin America – a region that is now trying hard to move away from fossil fuels. This change in direction was spawned after Argentina cut off natural gas exports to Chile in 2008, when their gas fields stopped producing enough for their own country. This left Chile with a deficient supply.

Chile soon imported more Bolivian gas, but then the climate changed, drought impacted the hydro-power, and Chile had to increase imports again, and by 2016 we got most of our LNG from farther away: Trinidad and Tobago, and the USA, driving prices up. Michelle Bachelet’s government responded by expanding green energy infrastructure and government incentives. This has significantly reduced the cost of producing electricity here, helping to address the nagging problem of very high electricity prices. But electricity is only one component of three ways that Chile uses fossil fuels. So, have they solved the problem of dependence on foreign imports? Will this result in less pollution, smog, and energy costs in general in Chile? Will it make an impact on climate change? Let’s look a little deeper to see the whole dynamics and facts of our energy situation.

Chile’s per-capita CO2 emissions peaked in 2014 at 4.7 tons (note this is per capita, not total). While emissions per capita have decreased a tiny bit since then, they are still 3 times what they were in 1990. To stop the rising CO2 in our atmosphere, other countries have set goals to reduce total CO2 emissions to below 1990 levels. On the climate change scorecard, Chile is only slowing down their race to disaster, not reversing it. Solar and wind power plants are not enough. Fossil fuels, which produce CO2, are also used for heating for buildings, cooking, industrial heat processes, and in engine-powered vehicles. Chile’s uses for these purposes have continued to rise.

Secondly, Chile is a nation without any substantial fossil fuel resources of its own, a dangerous situation to be in with today’s supply instability. And Chile is still dependent on imports of fossil fuels for the vast majority of its energy uses. Chile used fossil fuels for 73.3% of their total energy supply in 2015, and the percentage is likely down less than 2% for 2017. So our fossil fuel dependence is still very, very high. These fuels are imported and are causing climate change. Worst of all, supplies are running out!

World oil production crested in the second quarter of 2015, and fossil fuel production will be most likely to decline from now on. This will inevitably move prices much higher, restrict supplies, cause more wars, and make it difficult for smaller countries without their own resources to import the quantities of fossil fuels that they need. While the progress in using clean renewables for electricity production is to be appreciated, this new solar infrastructure does not properly address our massive dependence on fossil fuels, which threatens to spawn a crisis in Chile in the very near future. Therefore, Chile must not only speed up the building of solar and wind power plants, but also needs to employ other strategies to address Chile’s needs for heating/cooling buildings, transportation, cooking fuel, and industrial and agricultural process heat.

It’s true that Chile has one of the most developed public transportation networks in Latin America, including electric metro trains and many buses. But car ownership has been rising about 7% per year, and with almost no electric vehicles being sold, (they are too expensive here for most Chilean families), Chile’s main population centers are experiencing severe smog problems, very high petrol prices, and frustrating traffic jams. While Brazil has developed biofuels to provide 10% of fuel for vehicles, and Norway is quickly replacing its petrol-burning vehicles with either electric or hybrid cars, (currently around 25%), Chile has done very little to address the problem. Chile has so few electric vehicles that it doesn’t even show up on worldwide graphs of electric vehicle sales. To address pollution, climate change, and peak oil, Chile needs, but does not have, immediate steps to replace petrol use in vehicles.

Yet Chile has one of the largest lithium reserves on the globe, and is already the second-biggest producer of the mineral, (40% of world supply). Lithium is a main ingredient in electric vehicle batteries. Chile also has reserves of cobalt, another key ingredient in EV batteries. For the future, one of the 15 largest car manufacturers in the world, Baic Group from China, is currently talking with Chile’s economic development agency [Corfo] about a proposal which includes investments in the lithium industry, and building an electric vehicle factory in Chile. Of course China wants access to lithium for its own battery industry in return. Our lithium reserves, like oil, will not last forever. This move, if successful, may help solve the immediate transportation problem, although it is rather late. However, a quick transition to hydrogen-fuel-cell powered buses and instituting fleets of consumer-shared electric cars would be more impactful for reducing energy use, traffic, smog, and the costs of transportation in the short run.

This still leaves Chile without a strategy for addressing building energy needs sustainably, because we can never expect to supply all our building heating and cooling needs with electricity. This is because of the second law of thermodynamics: an accepted law of physics. When you convert a primary energy source such as oil, gas, wind, or sunlight into electricity, the efficiency of the conversion process is quite limited. Currently, the thermal efficiency of Chile’s power plants, averaged together, is about 38%. Adding a 7-10% loss in distribution, less than a third of the original energy supply gets to the end-use. That is why we have been using gas on-site instead of electricity for most heating demands- burning gas for heat is closer to 85% efficient. However, as we move to more solar power plants and wind farms, the delivered power efficiencies will go down, not up.

Chile inaugurates 100-MW solar park to power Metro de Santiago (VIDEO)

Photovoltaic Solar farms are typically less than 20% efficient at producing electricity in practice, and the locations for solar farms in deserts are farther away from our population centers causes even more losses in distribution. Even with the advances in photovoltaic cells raising their efficiency and lowering costs, with these conversion and distribution losses the resulting electricity is just too expensive to be practical for heating and cooling buildings. This is especially true since it would be so much cheaper to take two other approaches: For new buildings, to design the structures themselves for minimal heating and cooling needs; and for existing buildings, to insulate them and then heat and cool them with local solar energy. These two methods are far cheaper than using any type of electricity for heating and cooling.

Technology for localized solar heating and cooling has advanced also. This approach is the strategy that California is pursuing for buildings. Chile’s government should therefore require all new buildings to meet LEED energy efficiency guidelines, and they should institute a massive program to upgrade all existing buildings for energy efficiency, as Germany did in 2009, thereby avoiding most of the impact or the 2008 financial collapse on the German population. Such a program could also address Chile’s need for jobs that pay a living wage. With our very low wages compared with OECD countries, and 6.5% unemployment rate, we need help in that area. Here is some evidence for the need to change buildings:

Typical office buildings found in Chile are flanked with mostly glass facades. While this design helps to capture heat and light in the winter, it makes cooling very difficult and expensive in the summer. Some of these buildings require >2.5kW/m2 for air conditioning, as many as 8 hours a day! These kinds of cooling loads, when powered by electricity, often are the major operating cost of such buildings, which add up to more than the original cost of the building itself! Solar-assisted heat-pump cooling is much cheaper and more environmentally friendly, especially if radiators are used. And it does not require energy storage. Chile needs a new program to train and employ people to install localized solar cooling systems.

Residential buildings typically have red or gray metal roofs, which lose heat quickly in winter nights and gain heat quickly on summer days, making energy use high and expensive in both seasons. Adding insulating white roof coatings and hybrid solar collectors to Chile’s residential buildings could have an immense impact on building energy use.

Advanced Combination Solar Collectors can make hot water for both domestic hot water and heating, while also generating enough electricity for 50-80% of the building’s electric needs. There is not enough roof space in most cases for two separate banks of solar collectors – one for hot water and one for electricity – so combination collectors should be mandated in any government incentive program. When combined with LED lighting retrofits and insulation upgrades, localized solar systems for half of Chile’s buildings could reduce our total fossil fuel energy demand by about 40%, whereas Chile’s solar PV power plants will reduce it by only 7%, and wind farms only 6% in 2018.

In summary, it is important to recognize that Chile needs more Solar PV Power Plants and Wind Generator Farms to help solve the problem of sharply rising fossil fuel prices and supply shortages on the horizon. Yet Chile also needs advanced combination solar collectors for buildings, smarter design for new buildings and a massive program to upgrade existing building energy efficiency. And Chile desperately needs to phase out petrol and diesel-burning vehicles. Only with a three-pronged strategy to address buildings, transportation, and the electricity distribution grid can we say that Chile is on course to withdraw from our addiction to fossil fuels and return to a healthy society. Energy is at the very root of our economy, and a rise in supply prices will impact every part of our infrastructure. Even Chile’s agriculture is energy-intensive. Oil production has crested, and gas production is getting harder and more expensive. So not only global warming, but also economic stability is at stake. This issue demands very careful and serious attention by our government, our social organizations, our academic institutions, and our business leaders. Action must be swift and massive in order to prevent a crisis.


The author is a manager at Energy Pioneers, a company that is developing Advanced Combination Solar Collectors for buildings, and can be reached at