GlobalData: Energy storage, grid expansion ease use of renewable energy

GlobalData Energy 31 July 2019 (Last Updated August 5th, 2019 16:09)

Non-hydro renewable energy capacity in Chile is expected to grow from 4.5GW in 2018 to 27.5GW by 2030 at a compound annual growth rate (CAGR) of 16%.

GlobalData: Energy storage, grid expansion ease use of renewable energy

As per the recent report “Chile Power Market Outlook to 2030, Update 2019 – Market Trends, Regulations, and Competitive Landscape” released by GlobalData, installed non-hydro renewable capacity in Chile is expected to grow from 4.5GW in 2018 to 27.5GW by 2030 at a compound annual growth rate (CAGR) of 16%.

Figure 1: Power Market, Chile, Cumulative installed non-hydro renewable power capacity (GW), 2000-2030.

Source: GlobalData Power Database

Thermal power is used as the primary source of power generation followed by the hydropower, contributing about 53.7% and 30% of installed capacity in 2018 respectively.

However, the increase in thermal resources in power generation has been a source of concern due to climate change obligations. Chile is thus focusing more towards renewable sources to diversify the country’s energy mix. The country has already recorded a high growth rate in the renewable energy sector during 2000-2018 and is expected that the growth of renewables will increase the share of gas-based power to back up the fluctuations.

As per the Energy 2050 Roadmap, Chile has to reach the renewable target of 20% by 2025, 60% by 2035 and 70% by 2050. To stay on track to achieve the target, the country recently started investing in energy storage technologies and expansion of transmission lines. Chile’s power grid coordinator, Coordinador Eléctrico Nacional (CEN) has awarded grid expansion projects to four companies in a public auction.

The gradual coal phase-out program has also led to an agreement in January 2018 between the government and the utilities AES Gener, Colbun, Enel and Engie to scrap all their coal projects. ENGIE group has also recently commissioned a 2 MWh lithium-ion battery energy storage system in Chile to support renewable energy development.

In Chile, solar PV energy and wind energy are the constant factors that are leading the renewable energy sector to maintain their track of the target. To avoid any congestion of such a huge flow of power, there was an interconnection of two grid systems.

In November 2017, the interconnection of the northern power grid SING to the central power grid SIC got operational as National Electric System and is now responsible for the supply of energy to more than 97% of the national population.

The Energy 2050 Roadmap, large-scale energy storage solutions, modernization of transmission grid lines and retirement of the fossil fuel plants will ease the energy transition with a strong perspective. More with support mechanisms, tax benefits or feed-in tariffs, investors may find Chile to be one of the most promising areas to invest in the coming future.