LAMINA DE HURACAN Chilean Energy Overview Chile: Leading the Path - - PowerPoint PPT Presentation

LAMINA DE HURACAN

Chilean Energy Overview

Chile: Leading the Path on Solar Energy

Sustainable Energy Division Ministry of Energy - Government of Chile September 9, 2019

Chilean Energy Context

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• 17.6 MM inhabitants
• GDP/capita of USD 22.7 M
• High dependency from imported

fossil fuels

• Low level of electricity and gas

interconnection with the region

• High renewable potential

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Source: National Energy Balance, Ministry of Energy, 2017

Primary Energy Offer and Final Consumption

29% 15% 24% 25% 5% 1% 1% 0% 0%

Oil Gas Coal Biomass - Firewood Hydro Wind Solar Biogas Geothermal

2% 39% 36% 23%

Self-consumption Industrial and Mining Transport Commercial, Public, Sanitary and Residencial

Primary Energy Offer Final Energy Consumption

30 60 90 120 150 180 210 240 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

USD/MWh GWh

Geothermal Solar Wind Biomass CHP Hydro Oil Gas Coal Northen Chile Spot Price (R-axis) Central Chile Spot Price (R-axis)

Evolution of Electric Generation in Chile

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Agreement on international natural gas imports Consecutive dry years Natural gas cutbacks

Source: National Energy Commission

2018 46% of renewable generation (18% of NCRE)

All new generation from renewables

According to different studies, the future development of the energy matrix is forecasted to remain renewable.

Chile ranked #1 on the 2018 Climatescope ranking

• f attractive emerging markets for clean energy

investments.

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Renewable Future

7 7

High Renewable Energy Potential

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Atacama Desert

Highest level of solar radiation in the world >3.500 KWh/m2/Year (DIN) >3.000 Sun hours/Year <2mm rainfall/Year

Potential estimated by the Ministry of Energy for the last Long Term Energy Planning process.

High Renewable Energy Potential

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>72x Chile’s installed capacity ~1.7 times the installed capacity of USA

Over 30 GW undeveloped capacity with environmental approval Technology Potential [GW] Wind 37 Hydro 6 Solar-PV 1,194 Solar-CSP 510 Geothermal 2 Total 1,749

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Cost Driven Change

• The price of PV systems continues to decrease as results of

technology innovations, economies of scale and manufacturing experience.

• Competitive offers in tender

Global average LCOEs and auction results for utility- scale PV by commissioning date

Source: IEA - Analysis from Renewables 2018 Source: National Energy Comision, Chile

Tender in Chile for Regulated Costumers

Solid Institucional Framework

Chile leads to an attractive country for clean energy investments.

• Controlled inflation.
• Responsible fiscal policy.
• Controlled fiscal deficit.
• Good risk rating (Moody’s A1, S&P A+, Fitch A).

Power Sector

• Liberalized, competitive and unsubsidized market.
• Generation:

Spot market based on audited costs.

• Transmission:

Centrally planned for national grid.

• Distribution:

Regulated monopoly.

100 200 300 400 500 600 700 1Q-10 3Q-10 1Q-11 3Q-11 1Q-12 3Q-12 1Q-13 3Q-13 1Q-14 3Q-14 1Q-15 3Q-15 1Q-16 3Q-16 1Q-17 3Q-17 1Q-18 3Q-18 1Q-19

Average bps

Emerging Markets Bond Index Global Spread

Chile LatAm Global Europe Asia

Source: Central Bank of Chile

There is wide agreement that Solar is important in Chile’s energy future

Path to 100% Renewables, Wärtsilä 2019

Solar Future

Decarbonization development and operation study, Coordinador Electrico Nacional (ISO), 2018 PELP, Ministry of Energy 2018 Propuesta regulatoria sobre flexibilidad, Valgesta, 2019 Long term analysis for SEN, Moray and PSR, 2018 Generation Mix

Towards a sustainable energy transition

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• Allow development of flexibles systems that allow integration massive

amount of renewables.

• High quality projects not only from technical point of view, but also solid

involvements with comminutes.

• Allow development of new solutions (Storage, Electromobility, Demand

Side Management, Energy Efficiency, Internet of Things, Smart Grids, etc.)

Information Systems Forecast Systems Communication, Monitoring and Control Systems Flexibility from the current facilities Flexibility from the demand Development of the Transmission System Flexibility from the future facilities New alternatives

• f flexibility

Regional Integration

Solar development is growing in all segments

Not only Utility scale…

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Utility Scale

Al size of projects. Generators connect to the grid, accessing to the liberalized market (PPAs or Merchant). Dispatched under command of the ISO.

# Projects: 33 Solar Installed Capacity: 2,108 MW

PMGD/PMG

Projects up to 9 MW, connected to distributions or transmission grid under some special conditions. Can access spot market or an stabilized price scheme.

# Projects: 131 Solar Installed Capacity: 517 MW

Net-billing

Regulated clients can connect projects up to 300kW for self-consumption, but surpluses feed to grid and are valued in your electricity bill.

# Projects: 5,874 Solar Installed Capacity: 38.5 MW

Why are solar and other renewables important for Chile?

Solar and renewables have proven to be the most competitive

• ption,

lower dependence on imported fuels,

• pportunity to become energy exporter,

and also….

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Most CO2 emissions are from Energy Sector

Source: Inventario Nacional de GEI 1990-2016, Ministry of Environment Chile

GHG emissions in Chile:

• Chile has committed (in June 2019) to reach carbon neutrality by 2050
• Phase out plan of coal power plants by 2040 (!)

(8 will be closed by 2023)

• Other actions in transport, heat, cooling, efficiency, etc.

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Energy: highest opportunities to lower emissions of GHG in Chile

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Thermal Use (Heating and Cooling)

Renewables allow decarbonization in other uses further than electricity.

• Represents 36% of total

energy consumption in 2017.

• Opportunities for solar energy (and other renewables)

in industrial and residential sector.

• Renewable Thermal National Strategy under

development during 2019.

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Green Hydrogen & Power-to-X

• Competitiveness of green hydrogen

depends on energy cost (+CAPEX and running

hours)

• Chile’s potential has been highlighted

by several international publications.

(IEA, IRENA, WEC, BNEF, Asia Pacific Energy Research Center, Jülich Research Institute, among others)

• Potential uses go beyond energy

sector and is expected to be a 9 trillion USD industry by 2030.

A need for reaching worldwide carbon-neutrality

Hydrogen costs from hybrid solar PV and onshore wind systems in the long term

Source: “The Future of Hydrogen” IEA 2019

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Our vision for the future

Lead the energy transition, not only to adapt to the technological changes, but to accelerate its development and become a leader of this process in the region. Social and citizen stamp has to be part throughout the process

Gabriel Prudencio Head of Sustainable Energies Division gprudencio@minenergía.cl

Thank you