The Politics of Renewable Energy Policy in Chile

• In Event: Socio-Economic Developments in Crucial Sectors

Abstract

Lacking significant oil or natural gas reserves, Chile is heavily dependent on imports of fossil fuels to meet its energy needs. In recent years, especially given Chile’s sustained rate of economic growth and unreliable energy supplies from key trading partners such as Argentina, the Chilean government has sought to promote Chile’s abundant potential for renewable energy. Nevertheless, protests by environmentalists over a previous government's effort to develop the HydroAysén project, which would have flooded scenic rivers and valleys in southern Chile to make way for dams to provide hydroelectric power, reduced prospects of developing Chile’s hydropower resources, resulting in a more limited focus on solar and geothermal power. Having set a target in 2013 of providing 25 percent of Chile’s energy production from non-conventional renewable energy (NCRE) sources by 2025 – up from only about four percent today – the Chilean government has quite a challenge ahead. This paper examines the current Chilean government policies and institutions (such as CORFO and Fundacion Chile)available to help Chile achieve this ambitious 2025 target. The paper concludes that the technocratic independence of Chilean institutions and the overall Chilean political consensus in favor of efforts to promote renewable energy (other than hydropower) make this target an achievable goal.

Author

• Roy C Nelson, Thunderbird School of Global Management