Chile's Acceptance as a Developed Nation is Hampered by its Energy Problems

In 2010 Chile had a GDP per capita of $15,400, far more than most of its neighbours and a sign that it could be become one of the first Latin American nations to become a fully developed country. However it faces a major obstacle before it could hope to achieve this status; the fact that it has been struggling to fulfil its energy needs.

In September 2010, nearly 60 percent of the Chilean population found themselves without electricity due to a blackout caused by the inability to match the power supply to demand. The blackout left the country’s copper mines stranded, and brought the capital of Santiago to a halt; it also raised some serious questions about Chile’s energy future.

Chile relies upon hydroelectric sources to provide 40 percent of its electricity, which has led to drought-related power shortages. In light of this current struggle, the economic growth of the country is actually set to cause more dilemmas. Business Monitor International (BMI) have predicted that energy demand will increase from 58.8 TWh in 2011 to 70.5 TWh by 2015 and 87.8 TWh by 2020.

The President Sebastián Piñera has recently approved plans to develop a giant hydroelectric project, HidroAysen, which would see the construction of five plants in the pristine region of Patagonia. The project will cost about $3.2 billion and have a capacity of 2.75 gigawatts that will provide about 18 terrawatt hours a year.

However the HidroAysen project is attracting a lot of criticism and public outcry due to the fact that is will see approximately 5900 hectares of pristine wilderness flooded, endangering rare animals and habitats. A poll found that 74 percent of Chileans were against the project.

Piñera was hoping that the HidroAysen development will help Chile achieve 20 percent of its energy needs (about 5 gigawatts) from non-conventional renewable energy (NCRE) sources by 2020, a goal he set when he first took office in 2010.

The Electricity Development Advisory Committee (CADE), who were appointed to help advise the Chilean government the best ways to achieve their energy goals, said that the development of NCRE’s is too slow, and have supported HidroAysen as “a potential energy source highly relevant to the future matrix.”

It now seems that Piñera is backtracking on his promise and downgrading the ‘20 percent by 2020’ from a firm goal to an ambition, some believe it is because his government realises that it will not be able to reach the target so soon.

By. James Burgess of Oilprice.com