Chile debates whether citizens should profit from generating energy

Chile has become a model country for its advances in non- conventional energy, and is now debating whether citizens who individually or as a group generate electricity can profit from the sale of the surplus from their self- consumption – a factor that will be decisive when it comes to encouraging their contribution to the energy supply.

A Senate committee has analysed whether to eliminate the payments to citizens for their surplus energy established in a law in force since 2012, in response to an indication to that effect from the government of socialist former president Michelle Bachelet ( 2014-March 2018), which her successor, the right-wing Sebastián Piñera, is keeping in place.

Now it is being studied by the Chamber of Deputies, which has been warned by leaders of environmental organisations that the proposal to eliminate payments to citizens who inject the surplus energy they generate into the grid will sentence these initiatives to death.

Gabriel Prudencio, head of the Ministry of Energy’s Renewable Energy Division, told IPS that the current government aims to make “distributed generation a major element in citizen power generation.”

“We will continue to encourage end users to be able to generate their energy because of the resultant benefits, but we must identify and avoid any inconvenience in terms of economy, especially for those who cannot install these systems, and for the sake of the security of the system,” he said.

Manuel Baquedano, president of the non-governmental Institute for Political Ecology ( IEP), said “We hope that this proposal will not succeed and that we can continue with citizen- generated energy. Without the contribution of this sector, the goal of 80 per cent non- conventional energy by 2050 will not be achieved.”

The expert believes that the authorities fear that citizen power generation, mainly solar, will become a business in itself and will not be used only for self- consumption and to cut the electricity bills of individuals or small businesses.

“They are legislating against a ghost,” he told IPS. “Energy should be born from thousands of connected points and by a system that allows buying and selling.”

The current installed electricity generation capacity in Chile, a country of 17.9 million inhabitants, is 22,369 MW. Of this total, 46 per cent comes from renewable sources ( 30 per cent hydropower), and 54 per cent is thermal (21 per cent coal).

All electricity generation is in private hands, most of it based on foreign capital. Consumption, which is constantly growing, reached 68,866 GW-h in 2013.

Chile’s solar and wind energy potential is 1,800 GW, according to a study by the Ministry of Energy and the German Agency for Technical Cooperation (GIZ).

If only five per cent of the Atacama Desert in northern Chile were used to generate solar energy, 30 per cent of South America’s electricity demand could be met, according to the Solar Energy Research Centre (SERC).

During Bachelet’s fouryear term, Chile made an unprecedented leap in nonconventional renewable energies ( NCRE), which went from contributing five per cent of generation in 2013 to 20 per cent in 2017.

“Solar energy showed the greatest growth, from 11 MW in early 2014 to 2,080 in late 2017, followed by wind energy, which grew from 333 to 1,426 MW,” said environmental engineer Paula Estévez in the book Energy Revolution in Chile, published by former Chilean Minister of Energy Máximo Pacheco on May 10.

According to Baquedano, “In the country’s energy revolution, the main thing is indeed the change towards renewable energy that took place. Chile’s energy mix is going to be 100 per cent renewable at some point.”

Baquedano warned, however, that “the benefits of this energy revolution from the productive point of view have been only for the private sector and have not been passed on to the public sector.”

Prudencio said that “to date, there are approximately 16 MW of installed capacity of systems under Law 20,571 ( payments to residential generators), which is equivalent to more than 2,600 operating projects throughout the country.”

Ragnar Branth, general manager of Commercial Habitat, a high- end furniture and home design store in the municipality of Vitacura in eastern Santiago, installed solar panels on the roof to power a five-kW photovoltaic plant whose generation saves 13.5 per cent in annual electricity bills.

“There is a benefit in the monthly fee, but the initial investment is quite significant. We’re talking about more than 20 million pesos (about 32,200 dollars) in the purchase of panels and their installation alone, and that is not compensated in savings until at least the fifth or sixth year of consumption,” he told IPS. “The government took a good first step with the cogeneration law. However, some adjustments are needed, including the recognition of 100 per cent of the energy generated and some kind of benefit in the investment project,” he said.

“If the government wants this to spread and wants there to be significant cogeneration, there has to be a benefit in the investment or some form of tax reduction or benefit,” he added.

In the agricultural county of Buin, south of the city of Santiago, 99 citizen shareholders convened by the IEP financed the community project Solar Buin Uno that built a 10 kW photovoltaic solar plant connected to the grid. — IPS