Monday, November 15th, 2010

The Leap towards Development

Jorge Rosenblut
Chairman of Endesa Chile

In 2010 several events have created the opportunity to respond to the question regarding the energy matrix which Chile requires to grow and become fully developed. Reaching annual economic growth rates of more than 6% is an enormous undertaking and will imply doubling the current energy availability in 12 years. Essentially, we need to develop, in this short period of time, the same output of electricity generation that began 113 years ago in Lota. This means reaching the year 2024 with 11,500 additional megawatts, which implies investments of more than US$ 40 billion. Achieving standards of living that position us as a developed country must be accompanied by a strong boost in competiveness. To accomplish this, we must employ energy which is environmentally-friendly, massive, and competitively priced. This is not only an economic imperative for the country, but also for the individual budgets of Chilean households. The country has huge hydroelectric potential, which amounts to 25,000 MW, perhaps half of which is economically and environmentally viable. Chile's abundant hydric resources will help us meet the daring goal of full development in an efficient, sustainable and harmonious manner. We have abundant 100% local, clean, and renewable energy to meet the proposed objectives of growth, not using it would clearly be absurd.

In a recent interview in Technology Review, Bill Gates argued that the development of a country requires having base energy with a high plant factor, meaning, technologies that generate electricity the majority of the time. Chile's base energy is in technologies such as thermoelectric (coal and natural gas) and hydroelectricity. Since hydroelectricity is renewable, 100% clean, and has a high plant factor, it is one of the most advantageous resources. As an example, once in operation the HidroAysén will generate electricity 75% of the time, which is superior to the 50% to 60% of other base energies, and to the 18% to 30% of intermittent energies such as wind power.

In addition, non-conventional renewable energies must contribute to the generation of the 11,500 additional megawatts and to the reduction of greenhouse gasses generated by the country. This obliges us to deal with the "intermittency" which occurs when night falls at solar plants, and the wind dies on wind farms. It is necessary to consider all of the base energy that the country requires, adding those initiatives that develop massive, competitive, and environmentally-friendly energy, with a high plant factor, such as the large hydroelectric projects.

To take a final leap towards development, we must decide as soon as possible on the most adequate mix to meet the country's objectives. We must start working now to reach the year 2024 with 11,500 additional megawatts. Only in this way will we have crossed the threshold towards development by the year 2024, providing the country with megawatts composed partially by renewable energies, with higher or lesser plant factors. We will have made excellent use of our hydroelectric potential, a resource which is currently able to make a double contribution: providing the country with the energy we require and preventing further growth in CO2 emissions from our energy matrix.