Decarbonisation of the Chilean energy sector

Project description

Title: Decarbonisation of the Chilean energy sector
Commissioned by: German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU)
Country: Chile
Lead executing agency: Chilean Ministry of Energy, Chilean Ministry of Environment
Overall term: 2019 to 2022

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Context

Chile’s economic growth in recent years has led to a constant increase in the country’s energy requirements. When gas supplies from Argentina halted in 2005, it was mainly coal-fired power plants that were built to secure the supply of energy. Partly as a result of this, the Chilean energy sector is responsible for 78 per cent of the country’s greenhouse gas emissions, with 32 per cent arising from electricity generation alone. At present, 53 per cent of the required energy is generated from fossil fuels such as coal, natural gas and diesel.

Chile has the goal of becoming carbon-neutral by 2050 and is planning to phase out coal-fired power entirely. To optimise this process, a Coal Commission was founded in 2018 in which the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH was also represented. The commission developed recommendations for action for the government and evaluated different exit strategies.

To put these into practice, electricity generation needs to be restructured. The aim is to continue to expand the use of renewable energy from wind and solar power within the existing electricity grid. Coal-fired power plants must be closed down and alternative potential uses found for them. There is, however, some reluctance among the parts of the population to accept large wind and solar plants. Exploiting innovative options for utilising the great potential of renewable energy, such as generating and using hydrogen, is a further goal.

The Decarbonisation of the Chilean Energy Sector project supports the Chilean Government in overcoming these challenges.

Objective

A sustainable energy transition is to help to achieve Chile’s climate goals. The focus is on expanding renewable energy and implementing the decarbonisation of the energy sector to achieve a low-carbon economy.

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Approach

A significant area of work for 2019 is the activities in connection with the 25th Climate Change Conference (COP25) in December 2019. With an exhibition stand and various events, the project will present innovative solutions to a wide audience. Lessons learned can serve as a guide for other countries in similar situations.

The project also addresses the fundamental consequences of the phase-out of coal power. Examples include the social issues that go hand in hand with the closure of coal-fired power stations, the development of the requisite infrastructure for introducing a carbon market as well as regular coordination between Chile’s Ministry of Environment and Ministry of Energy.

Furthermore, the project is carrying out measures to further advance the expansion of renewable energies, such as establishing the necessary general and technical framework, promoting better social integration of major projects and developing innovative concepts for the energy sector. This enables the huge potential of renewable energy to be used as a driver of economic development.

Results

An international operator of coal-fired power plants was recruited to work with the Ministry of Energy and CORFO, Chile’s economic development agency, to analyse a pilot project to convert a coal-fired power station into a renewable energy storage system.
The Chilean Ministry of Energy recognises the production of hydrogen using renewable energy as a high priority area of work for the further development of the energy sector and has decided to draw up a national hydrogen strategy.

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