Business Opportunities in Renewable Energy in Chile – Market Entry

Chile has seen massive developments in its renewable energy sector in recent years. Although Chile does not have any domestic fuel energy resources, its diverse landscape offers many different renewable energy resources. In addition, significant institutional and policy reforms, as well as major infrastructure projects, have been carried out in the past years. Now, Chile is determined to continue these recent developments in renewable energy. Next to the environmental benefits for Chile, these developments in the renewable energy industry also help reducing electricity prices and its dependence on fuel imports. This also has a positive effect on the mining industry as a large part of Chile’s energy demand comes from this sector. Therefore, in this article we will provide an overview on the current status of the Chilean renewable energy market.

Business Opportunity: What Renewable Energy sources can be found in Chile?

Renewable energy can be classified as conventional and non-conventional energy. This distinction is made based on the level of the technology needed to produce them and on the degree of penetration and presence in the energy markets and is formally defined under Law No 20,257. Most energy sources in Chile classify as non-conventional. The most important renewable energy sources in Chile are the following:

• Hydraulic energy

Hydraulic energy is the only conventional energy type in this list and therefore also the most important conventional energy in Chile. Hydraulic energy is currently one of the country’s main energy sources in Chile and it is sourced from the rivers of the centre and south of the country. These rivers can provide hydroelectric potential equivalent to a total of 11 GW.

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  Solar energy

Chile has four thousand hours of sunshine per year in its northern regions and the highest levels of solar radiation found anywhere on the planet. This makes Chile the perfect place for the production of solar energy.

• Marine energy

Due to its massive coastline that extends over 4,000 kilometres, Chile offers many opportunities for marine energy.

• Wind energy

Chile’s massive coastline also cause strong winds from the north to the south of the country. Resulting in optimal wind energy potential. Operating wind farms may be found in the regions of Antofagasta, Coquimbo, Biobío, and Los Lagos. Wind energy in Chile has a potential that may reach 40,000 MW.

• Biogas energy

Chile has a large capacity to produce biogas.

• Geothermal energy

Over 15% of the world`s active and dormant volcanoes are located in Chile. In these volcanic regions, more than 300 geothermal areas have been identified to develop geothermal energy. At these geothermal plant, steam dredged from deep inside the earth is turned into electricity.

• Biomass energy

In the south of Chile, dense forests are a source for biomass fuel.

What Are the Opportunities for Renewable Energy in Chile?

The above mentioned renewable energy sources are often not yet fully exploited and offer many opportunities for investment. In addition, Chile’s well-performing economy and stable political environment make Chile an interesting destination for investors. The government is also heavily stimulating the renewable energy sector in Chile. It has launched the objective of producing 100% of its electricity with renewable sources by 2040. Recently, Chile already reached its aim of producing 20% renewable energy in 2025. This goal was reached mainly through solar and wind energy. New legislation is encouraging investment to create capacity across the electricity sector. Furthermore, Chile recently opened up an interconnected national electricity system. Also, the costs of the necessary technology needed for the production of solar and wind energy have declined significantly. All these factors diminish the market entry barriers for potential new investors.

The Chilean renewable energy sector is attractive for investors and has also been supported in research carried out by Climatescope. This research project ranked Chile as the 7th most attractive country for clean energy investment within emerging markets worldwide.

More Information About Opportunities in Renewable Energy in Chile

Other than its renewable energy sector Chile offers many more opportunities for investment. However, investing in Latin American countries can be difficult due to cultural and legal differences. At Biz Latin Hub, we have a team of local and expat professionals with the expertise to help you to overcome all the complexities of entering the Latin American market. Contact Team Chile here and see how we can help you with our  back office services and ensure your business venture is a success!

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