Chile has been warning of a looming energy crisis for the past decade. Now the government appears to actually be doing something about it, says our correspondent in Santiago.
President Michelle Bachelet announced late last week her 2014-18 energy program, pledging to expand a liquefied natural gas port and support renewable energy sources. During the televised address, she warned that Chilean electricity prices, which are already the highest in Latin America, would rise another 34 percent over the next decade without action.
“Lack of competition is one of the issues,” says our correspondent, noting that three companies control three-quarters of total electricity generation on Chile’s main grid.
Ms. Bachelet earmarked $400 million for state-run Empresa Nacional del Petróleo to build a third natural-gas import terminal. She also announced incentives such as free government land to lure new investment in wind and solar energy in the windy and sunny northern Atacama desert, which averages 330 days of sunshine a year. Upcoming tenders in the sector will pose opportunities for foreign investors.
“The government is interested in getting new companies to come and build plants,” says our correspondent. “The most feasible would be renewable power, hydroelectric, and thermo-electric.”
This is Bachelet’s second chance at tackling sky-high electricity rates in Chile, which is heavily reliant on hydroelectric dams and imported fossil fuels.... For the rest of the story, continue reading at our new business publication Monitor Global Outlook.