2012-09-10 06:10:16 - Chile Power Report Q1 2012 - a new market research report on companiesandmarkets.com

Following the worst droughts in over 60 years, Chile has had to rethink its energy provision strategy, as water shortages which led to numerous power cuts during H211 mean that the country cannot depend upon hydroelectric sources alone. Given that the government has dismissed nuclear as a feasible option – for the short-term at least – it aims to rely upon gas-fired power generation for energy security. In H212, two new gas-fired power stations are scheduled to become operational.

A series of power cuts in September 2011, which affected economic activity in Chile, have had a widespread effect on the entire energy sector. While the transmission grid was suspected of being the cause of failures – rather than electricity shortages –

 

 

the issue of energy supply has taken on political dimensions. While Chile depends heavily on hydropower, this source of energy is becoming tangled up in regulatory and legal obstacles. New projects are gaining approval, such as the 111MW run-of-the-river hydropower plant opened by Pacific Hydro in November 2011, but others are slowed by the objections of environmental groups. HidroAsyen, promoted by Endesa and Colbún, is one such case, while Energía Australs hydroelectric project for the River Cuervo is another – with the projects viability questioned again in November 2011.

In 2012, two new coal-fired power stations will begin operations, in a move that will introduce a sense of stability to the energy sector; these are Bocamina II (Endesa) and Santa María (Colbún). Utilities are also turning to natural liquefied gas as another possible source of energy generation.

Renewables will also gain importance in the energy mix in the short-term, with legislation from 2008 obliging energy generators to ensure that renewables account for at least 10% of energy supplied by 2024. Steps towards this include the inauguration of Chiles 10th wind farm in November 2011, in Punta Colorada, and the governments call for Spanish firms providing renewable energy technology to invest in Chile.

---During 2011-2016, BMI forecasts that Chiles overall power generation will increase by an annual average of 4.76%, reaching 78TWh at the end of this forecast period. Driving this growth is an annual 4.16% gain in gas-fired and a nearly 5% rise in coal-fired electricity supply, accompanied by annual increases of 5.5% and 5.8% for hydropower and renewables-based generation respectively.

Following an estimated increase in real GDP of 5.9% in 2011, BMI forecasts average annual growth of 3.9% between 2011 and 2021. The population is expected to rise from 17.3mn to 18.7mn during 2011- 2021, and net power consumption looks set to increase from 58.8TWh in 2011 to 73.3TWh by 2016, then rise to 91.7TWh by 2021.

Chiles power supply shortfall is likely to shrink steadily as new capacity kicks in. A gradual decline in the percentage of transmission and distribution losses from about 6.4% will help balance the market. There is no theoretical net import requirement by 2016, with scope for very modest net exports by 2021.The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.

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