1. ELECTRICITY SECTOR IN CHILE ADJUSTMENT IN TIMES OF CHANGE
ENERGY DAY
LIMA, JULY 3th, 2012
Vivianne Blanlot Soza

2. ADJUSTMENT OVER TIME 1990-2004: CONSOLIDATION AND INTEGRATION OF GAS
: THE END OF AN ERA
: NEW SCENARIOS, NEW REQUIREMENTS
GREAT QUESTIONS
THE NEED OF AN AGREED STRATEGY
CONCLUSIONS

3. 1990-2002: CONSOLIDATION AND INTEGRATION OF GAS
PRIVATIZED ELECTRICITY SECTOR
MODEL OF PRIVATE DECENTRALIZED DEVELOPMENT IN FULL IMPLEMENTATION
HYDROELECTRIC DEVELOPMENT IN CENTRAL AREA AND CARBON IN THE NORTH
INTRODUCTION OF ARGENTINIAN NATURAL GAS BETWEEN 2006 AND SIGNIFICANT COST REDUCTION
IMPLEMENTATION OF NEW ENVIRONMENTAL STANDARDS SINCE 1994

4. : THE END OF AN ERA
: CHANGE OF THE ECONOMIC ENERGY MODEL IN ARGENTINA - CHRONICLE OF A DEATH FORETOLD FOR NATURAL GAS IN CHILE
: INACTIVITY TO FIRST SIGNS :
BEGINNING OF THE "PERFECT STORM"
DIFFICULT ADJUSTMENT, THE RETURN OF CARBON.
HIGH PRICES OF IMPORTED FUELS
CHANGE OF SPEECH: long-term strategy, better planning, diversification.

5. 2010-2012: NEW SCENARIOS, NEW REQUIREMENTS
IN THE SOCIO-ENVIRONMENTAL AREA
THE EMERGENCE OF SOCIAL NETWORKS AND MOBILIZATION AGAINST INVESTMENTS IN ELECTRICITY SECTOR
INSTALLATION OF LOGIC ECOLOGIST IN PERCEPTION OF CITIZENSHIP
MAJOR ENVIRONMENTAL REQUIREMENTS
CONFLICT BETWEEN ALTERNATIVE ECONOMIC ACTIVITIES
LITIGATION OF CONFLICTS

6. 2010-2012: NEW SCENARIOS, NEW REQUIREMENTS
IN THE REGULATORY AREA
SLOWNESS IN ADMINISTRATIVE PROCEDURES:
Concessions and easements
Environmental qualification
UNCERTAINTY AND RISK IN CRITICAL INVESTMENTS:
Transmission
Alternative sources

7. NEW SCENARIOS, NEW REQUIREMENTS GREAT QUESTIONS
ENERGY SOURCES: INVOLVEMENT OF NCRE, CARBON, HYDROLECTRICITY, NUCLEAR, LNG.
ECONOMIC, ENVIRONMENTAL AND SOCIAL FEASIBILITY:
energy-environment conciliation: requirements, rules and restrictions.
local and national interest conciliation: local economic development, land use, policy of using natural resources.

8. NEW SCENARIOS, NEW REQUIREMENTS GREAT QUESTIONS
DEGREE OF STATE INTERFERENCE.
PLANNING OF TRANSMISSION SYSTEMS
DEVELOPMENT PROCESS OF TRANSMISSION SYSTEMS
LAND USE PLANNING

9. NEW SCENARIOS, NEW REQUIREMENTS THE NEED OF AN AGREED STRATEGY
INITIATIVES OF ANALYSIS AND STRATEGY PLANNING CADE ENERGY SCENARIOS CCTP

10. THE NEED OF AN AGREED STRATEGY CADE
COMMISSION EXPERT – POLITICAL MAINSTREAMING
MANDATE:
Long term analysis
Resources, scenarios, regulation, environmental and social aspects
Proposals for discussion

11. CONTRIBUTIONS OF CADE: STUDY OF SCENARIOS 2012-2030
Working simulations to assess the effect of various policies, based on possible scenarios and known potential of the alternative sources.
Demand growth between 4,5% and 5,5% per year in the SIC
Demand growth between 3,5% and 4,7% per year in the SING
Base scenario (BAU) with current policies
Different scenarios with alternative policies and restrictions

12. CONTRIBUTIONS OF CADE: STUDY OF SCENARIOS 2012-2030
Advantage of Interconnection SIC-SING
In the SIC
The most competitive technologies are the large-scale hydraulic power generation, geothermal and mini hydroelectric power plants.
Limit the development of large hydroelectric projects increases the cost between 7,0% and 7,5%, and increases the CO2 emissions between 37% and 39% depending on the rate of penetration of NCRE.
Without development of large-scale hydroelectric projects, MW nuclear and MW of carbon are required.

13. CONTRIBUTIONS OF CADE: STUDY OF SCENARIOS
In the SING
Depending on demand, the most competitive expansion would be concentrated in carbon, nuclear energy, geothermal and wind technology.
Interconnection allows to delay nuclear option if large-scale hydroelectricity is developed.

14. CONTRIBUTION OF CADE: STUDY OF SCENARIOS 2012-2030
NCRE
Good potential of competitive NCRE under current regulatory framework: penetration between 12% and 20% by 2024
20/20 NCREs → additional cost of USD 304 million (1,6%).
20/20 based on quotes of technologies → increased costs of USD million (8,8%)
Taxes on emissions
→ surcharge of 0,8% (USD 151 million)
→ increase (USD 97/MW) of the monomic price.
→ replace of coal-fired power plants (about 500 MW) by solar, wind, mini-hydro and LNG-fired power plants.

15. CONTRIBUTION OF CADE: PROPOSALS
Planning of transmission: long term-width to ensure solidity of great role system of the State in the identification of systems of public interest.
Land use definitions: limited areas – dedicated areas – tendering areas in energy development hubs
Improving methodologies and procedures in environmental management

16. CONTRIBUTION OF CADE: PROPOSALS
Discussion participatory systems of energy policies
Deepening of dialogue schemes and participation in environmental and social assessment of investment

17. CONCLUSIONS: THE CURRENT CROSSROAD
HIGH UNCERTAINTY TO EXPAND GENERATION:
Rejection of projects to administrative and judicial level has increased.
It affects all kinds of projects.
LONG DEADLINES TO EXPAND TRANSMISSION
PROJECTIONS OF THE HIGH COSTS IN ENERGY FOR THE NEXT YEARS

18. CONCLUSIONS THE COUNTRY NEEDS TO REACH A SUBSTANTIVE AGREEMENTS ABOUT:
ENERGY SOURCES
ENVIRONMENTAL REQUIREMENTS
LAND USE
ADVISORY PROCEDURES WITH NATIVE COMMUNITIES
THERE ARE ANALYSIS, INFORMATION AND TECHNICAL CAPACITY, BUT…
A HIGH-COMPLEXITY DIALOGUE PROCESS AT POLITICAL AND SOCIAL LEVEL IS REQUIRED, FOR WHICH THERE ARE NO PRECEDENTS IN CHILE.
WITHOUT IT, THE ENERGY DEVELOPMENT WILL CONTINUE TO BE TORTUOUS AND UNCERTAIN.