Chile: a spotlight on sustainable investment
Investors have recently turned to Chile for its vast potential within the renewable energy market.
Since becoming one of the first countries in the world to reform its energy market to permit renewable projects to compete directly with other sources, Chile has transformed itself from a country dependent on fossil fuel imports to a self-sufficient centre of renewable development and investment.
With over 6,000 km of coastline, 15 per cent of the world’s volcanoes and numerous deserts and mountains, Chile’s renewable energy market has always been teeming with potential.
In 2014, a 100 MW photovoltaic plant was built in the Atacama Desert, as well as a 115 MW Wind Farm in the coastal zone of Ovalle – both the largest in Latin America at the time.
In just two years Chile has become the region’s leading solar market, with the development of 29 more solar farms to supply the central grid, and even more in northern Chile to supply the country’s booming mining production.
Meanwhile, the El Arrayán Wind Farm serves the energy needs of approximately 200,000 homes per year, leading the Chilean government to announce plans for a further 52 wind projects throughout the country.
Due to these current and future developments, Chile is now considered to be one of the world’s top renewable energy markets, despite its relatively small size. World Bank figures estimate that, since 2012, the sector has attracted investments of US $9.2 billion – almost double the figure Chile received in the previous 20 years combined.
Chile has also recently been placed fourth in Ernst and Young’s Renewable Energy Country Attractiveness Index (RECAI) – a quarterly publication ranking 40 countries according to a number of macro, technology and market specific indicators.
One of the key catalysts spurring Chile’s renewables growth is the Energy Ministry’s ambitious target to produce 70 per cent of the country’s energy from renewable sources by mid-century, as well as the restructuring of energy supply auctions and introduction of tax on carbon emissions.
Chile also has vast potential within the wave and tidal energy industry – though more investment is currently needed into technological development – and experts have particularly noted Chile’s geothermal power generation potential due to its intense volcanic and seismic activity.
With its unparalleled natural resources and government’s commitment to renewable energy development, Chile’s energy market is set to continue attracting large sums of foreign investment.
These topics and more will be discussed at the Sustainable Investment Forum, taking place on September 20th 2016 in New York. For more information and to register, visit the website at http://www.sustainableinvestmentforum.org/.